NEW MANAGEMENT: DSLD’s new management team—Lee Foster, Saun Sullivan and Jeff Purpera Jr.—spent years with the company learning from its founder H. Allen Thomason Sr., who passed away two years ago. (Staff photo)
It’s been two years since real estate mogul H. Allen Thomason Sr. passed away, but DSLD, the residential construction company he founded, is showing no signs of slowing down, on track to complete nearly 3,000 new houses this year.
In many respects that’s because DSLD’s new management—Saun Sullivan, Jeff Purpera Jr. and Lee Foster, who spent years with the company learning from its founder—have continued to follow the long-time game plan of building high volume, mid- and lower-priced homes. Yet, to their credit, says local developer Kevin Nguyen, the three have driven the business to a new level.
“(Thomason) was able to pitch the young leaders Saun, Jeff and Lee. I think they’ve been able to push farther than they’ve anticipated,” Nguyen says.
From both a financial and business standpoint, Purpera says the company was prepared to handle the loss of its founder, who served as a mentor to the three men for the roughly two decades he worked with them.
“A lot of the philosophy and business tactics we use today we learned from him and from working alongside him the last 20 or so years,” Purpera says.
The company, which has built communities throughout Louisiana and the Gulf Coast, has sold over 800 homes so far this year in the Capital Region. The market, says Sullivan, continues to be the largest for DSLD in terms of volume built and sold.
“They’re a very active player in the Capital Region,” says Wesley Moore, an appraiser with Cook, Moore, Davenport and Associates. “They’ve figured out how the control costs and deliver a product that maximizes the bang for every dollar.”
At a time when home sales have been slowing both locally and nationally, the builders contend the sludge has been caused by a lack of supply, not demand. Their largest constraint has been having lots to put houses on.
“If we had more lots, we’d do more sales,” Sullivan says.
Unlike other builders, the company doesn’t focus on a single subdivision at a time. Instead, the company focuses on consistency throughout its neighborhoods, says Foster. Utilizing what he calls an “even flow system,” the company starts and finishes 15 to 18 homes a week every week and buys an average 250 lots a month every month for a total of 3,000 homes a year.
However, volume means nothing to the company whose executives have been described as “obsessive” when it comes to the quality of their homes.
“That customer that bought your house doesn’t care how many houses you built, they care about the one you built for them,” Foster says.
There are daily inspections on construction sites, and trade laborers are given feedback weekly on the quality of their work. When the house is completed, the home is scored against a multi-thousand point checklist, and a representative from the customer care department meets with homebuyers 30 days, 4 months, 8 months and 12 months after a home is sold. If the quality isn’t up to snuff, the company has been known to halt sales for a subdivision until changes are made and customer satisfaction picks back up.
Appraiser and Business Report contributor Tom Cook says he was amazed when Sullivan, whom he described as a “hands-on operator,” told him the company’s process.
“He’s got it down to a science,” Cook says. “He just has a really good system.”
Prices for their homes typically range between $160,000 and $275,000, cornering the local niche for low- and mid-priced homes that attracts millennials, first-time homebuyers and people looking to get away from renting.
First-time buyers are especially drawn to newly constructed homes like the ones built by DSLD, says Erin Hybart, a real estate agent with Keller Williams.
“They tend to overlook the overall picture and have narrow vision. They like new construction. They fall in love with the pretty and new homes. It’s the romance of buying a new home,” says Hybart.
To keep prices low, the land acquisition department of the company Foster leads works to get the best deal for lots—the priciest component of the homebuilding process. The company also works with many of the same contractors and developers, building relationships leading to better deals, which Foster says differentiates the business from competitors, such as national homebuilder D.R. Horton.
“I don’t go shopping for trades,” Foster says. “We’ve got trades that have been with us for 10 years, like a marriage. There’s a big difference between a relationship and a bid.”
D.R. Horton was unable to be reached for this story.
Nguyen has worked on over a dozen communities with the company since it was founded a decade ago. He says it’s the professionalism the trio exhibits that leads him to continue to do business with them.
“A handshake with them is as good as gold,” Nguyen says.
By controlling the lot price and using the volume discount they’re getting from material suppliers and subcontractors, they’re able to sell an affordable house that is a good quality, Purpera says. They also don’t look at the appraised value for the homes to set the prices. The prices they set for homes is based on the return investment on the house.
“That’s one thing we learned from Mr. Thomason: ‘Don’t worry about what the fella you’re buying from is making and don’t worry about what the guy you’re selling to is going to make. You take your little piece out of the middle and go on down the road,’” Purpera says.
The desire for geographic diversity led the company to expand into markets in Mississippi, Alabama and Florida, according to Purpera, who adds the Louisiana economy is more dependent on the oil prices than the company would like. They company is currently looking to build in Orange, Texas, though they’re unsure if they will consider it a new market because of its proximity to Lake Charles.
The company’s next big expansion would come in 2020 at the earliest, with possible locations including Birmingham, Nashville, Atlanta and Texas, but the homebuilders maintain if conditions aren’t right to expand, they won’t. They’re not going to push to expand just for the sake of growth.
And though Purpera says he doesn’t expect there to be a big shock to the housing market from rising interest rates, he does think a downturn is inevitable.
“There’s another downturn out there. We’ve been 8 to 9 years in a rising market, so we want the financial stability to weather another downturn,” Purpera says. “It would be nice in the next downturn to have Thomason’s 70 years of experience he had in business to go through it.”