Defend Your Turf

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Smaller builders voice justifiable concerns that GIANTS will buy higher and drive up land costs in an effort to churn ever-more product and keep the cash flowing. Here are a few tips to stay in the game:

January 01, 2005

Smaller builders voice justifiable concerns that GIANTS will buy higher and drive up land costs in an effort to churn ever-more product and keep the cash flowing. Here are a few tips to stay in the game:

  • Leverage your assets with option arrangements or partners and look at value/profit opportunities, not costs. Profitability does not depend on volume growth.
  • Buy already-entitled lots from a larger master-plan developer-builder.
  • Partner with other builders for greater synergy and architectural control of multi-lot projects.
  • Nurture relationships with all business partners, including local officials, realtors and bankers.
  • Formalize "sell us land" programs, from your business processes to direct marketing and Web promotions for collecting leads.
  • Go where the big guys won't. Larger builders need larger parcels, so seek unique spots too small to interest them.
  • Capitalize on your local roots and reputation with community outreach, and preempt even as the larger builders — often local builders acquired by nationals — do the same.
  • Be more flexible. The big guys have more layers of bureaucracy than small builders whose knowledge and experience can slash research time and cost.

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