Under-40 Home Builders: Competing After Launch

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Ryan Larsen discusses launching Porchlight Homes in Phoenix and competing with larger builders.

Ryan Larsen, Vice President of Operations, Porchlight Homes, Gilbert, Ariz.

September 15, 2014

Ryan Larsen handles Porchlight Homes’ land acquisition and development activities, product design, and office and field employees. He also manages the sales and marketing of new homes.

Larsen began his working career in finance after earning both a bachelor’s and a master’s degree in accounting after just four years at Brigham Young University’s Marriott School of Management. He worked at a mortgage company after graduation and three years later joined a wealth management firm preparing tax returns and providing consultation for wealthy individuals, companies, and sports franchises. 
 
In five short months he left the account­ing field and never looked back, jumping to Element Homes, Draper, Utah. As the land development project manager, he managed teams of engineers, landscape architects, and other consultants, and entitled six subdivisions, totaling more than 1,500 lots in four municipalities. There he met Porchlight co-founder and current president Scott Peterson, and the pair launched their company in 2009. The builder closes about 25 homes annually and is aiming to finish 50 in 2015.
 
Q: How and why did you make the jump from accounting to home building?
A: After completing my graduate degree in accounting, I came to Phoenix to work for a boutique wealth management firm who had a very impressive list of clients. Managing investments for the wealthy sounded exciting, but a lot of solitary time in a cubicle working on tax returns changed my mind. It wasn’t the right environment for me. So when an opportunity came up with a local private builder to work in land development, I was thrilled to make the move. The whole process from land acquisition and development all the way through delivering new homes fascinated me. I was fortunate enough to work with some of the most respected names in the local development community. This foundation in land acquisition and development has helped me tremendously as my partner and I have built our company.
 
Q: What were the challenges/opportunities in starting a home building company in 2009?
A: We had our share of challenges, but the opportunities more easily come to mind. The majority of small private builders in Phoenix did not survive the crash, so there wasn’t a lot of competition for land. Our first few deals were bank-owned, finished lots in partially completed subdivisions located in great infill areas. Since the supply of capital for home building was extremely tight, we focused on smaller subdivisions that we could self-finance. Vertical construction costs were low because the trade base was eager for work. Home prices were still sliding, but with lot and construction costs so low, there was still margin in the right deals. Looking back it was a terrific time to start our operation.
 
Q: How does Porchlight differentiate itself from other builders?
A: The challenge of access to capital for larger deals forced us to be different. Focusing on smaller, infill locations now helps us avoid big builder competition when acquiring land and when selling homes. Since our competition comes mainly from resale homes, we try to include some extra features and a level of energy efficiency that the resale homes don’t have.  As our company grows, and we begin to expand into areas where larger builders are active, we continue to try to be different from the pack by having smart floor plans and including thoughtful features that buyers appreciate. But the real secret is our team.  We are small in numbers, but the talent I’m surrounded by is abundant. PB
 

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