Russ: This is The BusinessMakers Show, brought to you by Comcast Business, built for business. My guest now, John Leggett, Founder and CEO of On Point Custom Homes; John, welcome to The BusinessMakers Show.
John: Russ, thanks for having me on the show.
Russ: You bet, tell us about On Point Custom Homes.
John: Absolutely. Well On Point Custom Homes was founded in 2005 by myself and since then we’ve been an in field focused home builder in the Houston market, predominantly we’re based in Highland Village and the best way we describe where we build is if you sweep a 3 mile radius around our office you’re going to hit 95% of what we do. So very urban focused, our niche has been on the modern Houston market so when you see our houses a lot of times they’ve got a little bit edgier feel using transitional elements and a lot of modern features.
Russ: Okay, when you center around Highland Village there I would assume that you’re doing a lot of tear downs to build your home, is that right?
John: Yes sir, we call it in field construction.
Russ: Ah, that’s what in-field means.
John: So typically we take one down to put one back and very focused on preserving a lot of stuff. What we do is recycle an old house before we do where there’s Habitat for Humanity or Historic Houston. There’s a lot of good salvage in these houses before we actually take it down.
Russ: Okay so are you a speculative builder; you buy a lot, tear it down, build a house and put it for sale?
John: Sure, I mean probably about half of what we do are spec homes where we absolutely buy the lot, we own the inventory ourselves, build it and look for a buyer. And about 50% of what we do is a custom house where you come to us and already have your lot and then from there we essentially build your house and design it for you.
Russ: Okay. I find that kind out of the ordinary for Houston construction that you’re doing modern contemporary homes; that’s my style of choice too.
Russ: But there’s not too many builders around that seems like they do them.
John: Yeah, when we started in 2005 and we were going to build the first contemporary house everybody looked at us like well that’s never going to sell here, nobody’s going to want a Houston modern home.
John: And it was interesting to find there’s such a larger segment of the population that really wanted that and the people that we find buying the houses where we thought it would be the younger generation that would take into it has actually been the empty-nester crowd has been a big focus for us and what has bought our houses.
Russ: That’s real cool. So you might even attribute part of your success to the fact that you chose that style and not too many builders do it.
John: Yes sir, we’ve definitely become known for it and it’s a niche that we’re proud of and you know spend a lot of time on keeping up with new tends in the market; you know, building trends or technology in order to what we like to say is we try to stay ahead of the building curve.
Russ: Okay, so when you talk about the building curve – and there’s kind of been a boom going on in Houston…
Russ: Okay, and so it seems like doing what you do, part of the challenge is always getting the best subcontractors. I mean how do you differentiate yourself when you’ve got a big project or two or three going on and you need the best foundation guys, the best framing guys; how do you keep them? How do you get them and how do you keep them?
John: We spend a lot of time on vendor relations, which I think a lot of guys don’t, and we really focus on using some of the best guys in the market like you’re alluding to, but that becomes like us getting in there and interviewing those guys using your own previous projects and once we build that relationship with them our subcontractor base doesn’t actually change as much as a lot of guys would thin. We’re not always going to necessarily bid to the lowest guy because you’re going to get what you pay for a lot of times in that situation. So we’ve got a lot of loyal subcontractors that have been with us a while and it’s been good in this market. Luckily our volume and relationships have been able to attract guys to stick with us when other guys have struggled to find people.
Russ: Okay, how many homes have you built?
John: Probably now about 180 to 200 in the Houston market. Right now we’ve got going between 20 and 25 houses and that’s usually what we’re averaging a year is about 20 houses a year. Last year maybe a little bit more due to obviously the market being a little bad.
Russ: Okay so you said you started in ’05, right?
John: Yes sir, the first house was on the ground in ’05.
Russ: So what were you doing before then?
John: I actually did investment banking of all things for 5 years and all in the oil and gas industry. And we moved here from North Carolina, my wife and I got married right out of college and have been here ever since. Obviously energy brought us here and now real estate’s kept us.
Russ: Okay, so you came to Houston because of energy and the investment banking position?
John: Correct and enjoyed that for 5 years. It was great, I always swore I would never go into real estate because my family had done it and now here I am.
Russ: Okay. Well I – you know we have a business audience here on The BusinessMakers Show, probably they’re pretty curious about that decision-making process to jump from one to the other. So what was going on in your mind, what triggered you to say that’s what I’m going to do?
John: You know, I’ve always had the entrepreneurial bug and I think that is part of it. I’ll never forget that when I was going to leave and my mom and dad are like you? And I tell well, I’m quitting and they’re like you’re doing what? Yeah, I’m done. And they’re like well what are you going to do? I’m going to figure it out. And they’re like well you can’t do that, have you thought through this? I’m like yeah I’ve thought about it. So and we bought some land and started building and haven’t looked back. I’ve done a lot of other things in real estate around here and it’s been great.
Russ: I bet your parents are glad you did it.
John: Oh yeah, now they’re impressed and wanting to show it. I’ve got an article in the paper so I’m going to send it to all their friends and so they’re super excited.
Russ: Well John, I really appreciate you coming and sharing your story with us.
John: Thank you Russ, I appreciate you having us.
Russ: You bet. And that wraps up my discussion with John Leggett, the founder and CEO of On Point Custom Homes. And this is The BusinessMakers Show, brought to you by Comcast Business, built for business.
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