July/August 2011
FORUM
Journal of the Colorado Association of Home Builders www.hbacolorado.com
rock y mountain builder conference ‘11:
Make plans now for final year at Beaver Creek
heritage
(her-i-tij)
Something passed down from preceding generations... tradition.
Knudson Associates: 1977...
John Knudson provides distinctive home and commercial design services when he founds and grows the Boulder-based firm.
Knudson Gloss Architects: 1989...
Jerry Gloss proves instrumental in directing an extensive range of award-winning residential design services, cementing the firm’s nationally recognized reputation. The addition of partners Paul Mahony and Marty Beauchamp in 2002 reinforces KGA’s lasting tradition of notable residential design, whether custom home, market-driven production housing, or remodel and home renovations.
KGA Studio Architects: 2011...
Jerry, Paul, Marty, and their talented team enhance KGA Studio Architect’s design heritage to create solutions that will benefit and serve their clients ... for generations to come.
“Our design philosophy is embedded in the belief that the best design is one that serves the client.” 303.442.5882 950 spruce st. louisville, co 80027 Please visit our portfolio of work at www.kgarch.com
We believe in the home. We believe in the office park. We believe in the building and we want to help you make each one great. We operate more than 450 building material facilities all across the country, all devoted to those who create the buildings that shape America. We are ProBuild. And we believe in the building. If you do too, visit us at www.probuild.com.
• Components Manufacturing • Doors • Engineered Wood • Insulation • Lumber • Millwork • Moulding • Siding & Trim • Windows
11 Colorado Locations Lumber. Building Materials. Components. Millwork.
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ColoradoBuilder
FORUM
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features contents »
July/August 2011 vol. 15, no. 4 Official Publication of the Colorado Association of Home Builders
CAHB executive committee President Peter Tobin President-Elect David Tschetter Treasurer Tom Brinkman Secretary Rob Griffin Immediate Past President Emil Wanatka Government Affairs Chair Chris Elliott Executive Officers Council Chair Sue Hibbs State Representative to NAHB Skip Howes
CAHB Staff Executive Vice President Amie Mayhew
CAHB editorial board Bill Armstrong, Chair Tom Brinkman Randy Feuerstein
Tom Hayden Peter Tobin
600 Grant Street, Ste 550 Denver, Colorado 80203 P: 303.691.CAHB (2242) F: 303.639.4954 www.hbacolorado.com
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Dedicated to the advancement of the home building industry, Colorado Builder Forum is published six times a year for members of the Colorado Association of Home Builders. Copyright © 2011 by CAHB. No material may be reproduced without the express permission of CAHB. Acceptances of advertisement in Colorado Builder Forum do not imply endorsement or approval of the product or service advertised.
Rocky Mountain Builder Conference Make plans now for our final year at spectacular Beaver Creek
6160 S. Syracuse Way, Ste 300 Greenwood Village, CO 80111 T: 303.662.5200 F: 303.397.7619 www.custompublishingco.com vice president – group publisher
Maureen Regan-Cannon 303.662.5215 mregan@wiesnermedia.com editor
Kim Jackson kim@writingwerks.com creative director/advertising production
Lindsay Burke Project manager
Susan Humphrey 303.662.5207 shumphrey@wiesnermedia.com
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Economic outlook
Alternative financing
After being thrown from the horse, builders are ready to ride again
Well-structured deals draw private investors to home builders
account executive
Martha Dickenson 303.662.5280 mdickenson@wiesnermedia.com
chief executive officer
Dan Wiesner
chief financial officer
Jon Rich
John Wiesner
vice president – IT
vice president – production/operations vice president – group publisher
Amy Korb
Bart Taylor
E. Patrick Wiesner credit manager
COVER PHOTO by jack affleck, courtesy of vail resorts
Patty Barbosa
accounting specialist
Amber Stroud
digital imaging/prepress manager office coordinator
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Steve Oliveri
Christy Markley
departments contents »
08 38 40
President’s Letter CAHB is hard at work through the dog days of summer
Marketing QR codes instantly connect you with smart phone-savvy buyers
Member Spotlight Chance call changes career course for CAHB’s Amie Mayhew
Builder Financing
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Recap of mortgage underwriting rules begs questions: Without the risk of default, how can we justify charging people interest?
Colorado Builder Forum is printed on elemental chlorine-free paper in conjunction with the International Joint Commission and is consistent with the U.S. Environmental Protection Agency’s standards.
Please recycle this magazine.
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What it means to be four times bigger... Bigger selection, better service, best value. We’re now running with the Big Dogs! Robinson Brick is now General Shale Brick. We’re now the nation’s largest masonry supplier!
http://denver.generalshale.com
President’s Letter
CAHB is still working for you during the dog days of summer As summer is rolling along, I hope your business is starting to see an uptick and all your hard work in surviving the market is paying off. Although we are not out of the woods yet, better days are surely ahead.
Reserve your spot at the Rocky Mountain Builder Conference Are you ready for the Rocky Mountain Builder conference? Our annual conference is coming October 5-8, and will be held at the Hyatt Beaver Creek. If you have not registered, please go to the CAHB web site or to www.builderconference.com. The conference committee, headed by Paula Huggett from the Bokka Group, has been working hard since last fall to make this a great event. Highlights include educational seminars from industry experts, exhibits from our statewide suppliers and the fact that once again we will be at the beautiful Beaver Creek Hotel and Conference Center. This may be our last year at Beaver Creek, as our contract expires after this year’s conference. Looking ahead, CAHB is considering many other locations for our 2012 conference and beyond. We look forward to seeing you in Beaver Creek.
Financial task force makes progress Another CAHB group that is hard at work over the summer months is the Financial Task Force. The task force was originally formed to interview and recommend a new accounting firm. Once that task was completed, the task force’s charge was to make recommended changes to our financials and how they are communicated to the board. Led by Tom Brinkman, of BCX Development, along with Chris Jeavons, John Bissett, Jack Acuff, David Tschetter, and Rob Griffin, the task force has been working with our new CPA firm RubinBrown. Together, they have worked through the financials and bring to us new reports that are both timely and easily read. Many thanks to all members of the task force.
New GL program has better coverage On the insurance front, CAHB now has a new general liability program. Delivered through Vela Insurance Services and RPS, CAHB now has a program that is more competitively priced, with enhanced coverage. For more details, please see the CAHB web site www.hbacolorado.com. Enjoy this issue of Colorado Builder Forum for the latest on all the activities we have been working on; we appreciate all of the efforts put forth from you, our members. Enjoy the rest of your summer and I look forward to seeing you soon — and for sure at the Rocky Mountain Builder Conference. Best to all,
Best wishes, Peter Tobin, CAHB President
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Peter Tobin CAHB President
Bigger. Better. And Still the Best. Robinson Brick Company is now General Shale Brick, working with you to “Build the American Dream”.
What does that mean to you?
Bigger.
General Shale Brick is the largest brick manufacturer in North America providing value, service, and the best masonry products available.
Better.
We offer you a wider selection of masonry products from brick to block, natural stone to thin brick, and much more. We have everything you need to build the American dream.
And Still the Best.
With 230 years combined experience and know-how, we are ready to serve you in ways that exceed your expectations. Every time. Thank you for your patronage and your loyalty, and we look forward to building our new relationship with you now as General Shale Brick.
We’re running with the big dogs now. Come and see for yourself.
http://denver.generalshale.com
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NAHB president, national speakers headline event
Rocky Mountain Builder Conference invites industry to Beaver Creek one last time photo by Jack Affleck, courtesy of vail resorts
Colorado Builder Forum
July/August 2011
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W
hen it comes to autumn in Colorado, few things rival the splendor of Beaver Creek. The air is crisp, the sun is bright, and the aspens are ablaze with their characteristic yellow before settling into the white of winter. As the backdrop to the Rocky Mountain Builder Conference (RMBC), it sets the stage for the home building
said. “To be able to get into the same room with some of the top legal minds in the state and hear their advice, has always been of great benefit to attendees.” Sessions that focus on accounting, management and what buyers want (and can’t live without) round out this year’s educational breakouts — and offer something for everyone.
“ I really enjoy the relaxed atmosphere of the Rocky Mountain Builder Conference — from casual meals with builders I normally would not have the opportunity to meet, to cocktails with friends. The relaxed pace of the whole conference really lends itself to open conversations that would be hard to come by any other place.” — Bill Armstrong, President, ProHome Colorado
industry to take a few days to relax, regroup, network and learn about what’s new or important to business today. If you haven’t been to the RMBC in Beaver Creek before, this is your last chance. After ten years, the October 5-8 conference marks its final year in the resort town. As such, the RMBC Committee has pulled out all the stops. A special line-up of some of some national speakers will lead breakout sessions. And 2011 NAHB President Bob Neilsen is making a special trip from Washington, DC to attend the opening session and be available for questions and conversation all day Thursday, October 6. “This is going to be a fantastic year,” said Paula Huggett, RMBC Committee chair. “We did a good job last year of finding out what attendees enjoyed about the conference — and we’ve done more of that this year. Great national speakers are coming in for education sessions; some of them spoke at the International Builder Show in Orlando and will now be at this smaller venue. Bob Neilsen will be here for a day. And we have great things to see from our exhibitors that are coming back this year, along with some new ones.”
National speakers headline breakout sessions The Dow Chemical Company’s Aaron Nitzkin will be coming in from Michigan to speak about the role of solar photovoltaics in residential design. IBS speaker Jimmy Diffee from the Bokka Group will share what works and what doesn’t with e-mail marketing and while 3D glasses aren’t required, Norris Designs’ Diana Real, who also spoke at the IBS this year, will lead a session on 3D technology for builders. Last year, the construction defects session garnered the most attendance of any session. This year, Paul Bennett with Knott Laboratory will lead a session on the mostcommon construction defects in new construction today. “We got a lot of feedback on how much attendees got out of that session,” Huggett said. “They wanted it again, so we brought it back this year.” Because builders are interested in legal sessions, there are a few to choose from again this year. “Legal has always been a great asset to this conference,” Huggett
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it’s a great chance to talk with builders from around the state That’s just the education. One of the biggest benefits for attending the RMBC is the opportunity to network and socialize. Interspersed throughout the exhibit hall are food, beverages and tables where people can eat breakfast and lunch Thursday and Friday, as well as enjoy a cocktail reception Wednesday, Thursday and Friday evenings. All of this is just $129 until August 15; after that, it’s $159. Even so, two breakfasts, two lunches, three cocktail receptions, two after-hours parties, two days of education and endless networking all adds up to a great conference. The CAHB has also worked out special lodging rates at two hotels in Beaver Creek. The Lodge is offering registrants rooms for $133 a night, while the Hyatt is $163 a night. When you book your room, be sure to mention the RMBC for these special rates.
“ The interlacing of food, drink and exhibitor booths makes for a more relaxed, enjoyable and social networking atmosphere. It’s great that our exhibitors are not confined to the exhibit hall like other conferences. They attend education sessions which allows for more dynamic conversations amongst all attendees. This conference is a mosaic of the home builders associations across Colorado. It is always attended by those dedicated to making a difference and advancing our industry.” — Paula Huggett, RMBC Chair and VP, The Bokka Group
an rmbc exclusive: hit the links saturday
RESIDENTIAL COMMERCIAL INSTITUTIONAL CABINET BOXES
There’s more, of course; there always is. If you like to play golf, the RMBC Committee (okay, Jon Lindstrom) has negotiated exclusive tee times with RMBC attendee discounted green fees for Saturday, October 8 at one of the private clubs in the area. At press time, the location was not quite confirmed, so visit the RMBC web site for details: www.builderconference.com.
your attendance helps cahb
— Mike McMahon, First Mortgages
What’s this? Called a quick response (QR) code, if you have a smart phone, just point, click and the RMBC website will pop up on your screen. If you don’t have the app on your phone (some phones come with it already loaded), just download a QR code app, then point, click and visit the site for more info on the conference. Want to know more about QR codes? There’s an article on them — and how you can leverage this technology — in this issue.
COMMERCIAL CASEWORK DRAWER BOXES Contemporary FRONTS
“ I enjoy getting together with those I only see every year at the conference — mostly those builders and associates from other parts of the state and Wyoming. Getting to visit with them over FREE drinks and music is just an added plus! It’s also always interesting to hear the different points of view that many of our presenters have on the market and what needs to be done to improve us as builders/associates. And having a booth there gives a company an opportunity to see everyone who attends — and gives them a chance to talk with them.”
CLOSET SYSTEMS
As you know, the CAHB exists to defend builders at the state capitol. And after three years of making no progress, this year’s legislative session landed some wins for home builders. While CAHB is funded in part through member dues, the RMBC is the only event that raises funds for the CAHB all year. Your attendance for this swan song in Beaver Creek will help the CAHB continue to defend your business interests at the capitol next year. If the education, networking, socializing and even golf isn’t enough to sway you to attend the conference, CAHB and the Conference Committee hope that continuing the good fight at the capital is.
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Colorado Builder Forum
July/August 2011
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builderconference.com/sessions With two days of education sessions each year, the Rocky Mountain Builder Conference is a great venue for attendees to learn from local, regional and national experts in the home building industry.
Thursday: October 6th
Friday: October 7th
1:30 pm - 3:00 pm
10:00 Am - 11:30 Am
The New Buyers… what they want, don’t want and can’t live without
3D Technology for Builders – 3D glasses not required
Anne Olson Postle, AIA, Olson Architecture Doris Pearlman, MIRM, Possibilities for Design
Diana Rael, Norris Design
Do it Right the First Time Karin Sullivan, Esq., Hensley, Kim & Holzer Ryan Warren, Esq., Hensley, Kim & Holzer
Email Marketing for Real Estate: What works, What doesn’t. Paula Huggett, VP and Jimmy Diffee, VP/ Chief Effectiveness Officer at the Bokka Group
3:15 PM - 4:45 PM The New Sales Game: What’s working today with generating, qualifying and converting leads into sales in this market?
Meghan Bahnsen, CMCA®, AMS®, Hammersmith Management, Inc., AAMC®
Streamlining the purchasing process Mark Henderson, Builder Purchasing Services
1:00 PM - 2:30 PM Tax Trends: A Look at state, local and federal updates and their effect on builders
Keith McKinney, New Home Star
Vera Divenyi, Hein & Associates Mira Fine, Hein & Associates
Most common construction defects in new construction today
The role of solar photovoltaics in residential architectural design
Paul Bennett, PE, CBIE, Knott Laboratory, LLC
Aaron Nitzkin, The Dow Chemical Company
Managing Your Business for Exceptional Results
An Overview of the U.S. Department of Energy’s high-performance windows volume purchase program
Jeff Prager, Backroom Management Steve Hays, RubinBrown, LLP
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Preemptive Partnering: Protecting your assets through proactive partnership with your HOA management company
July/August 2011
www.hbacolorado.com
Jason Bogovich, Energetics, Inc.
Planning Landscape Architecture Community Branding Urban Design Sustainable Design Development Coordination Parks & Recreation Planning Construction Services GIS Services Visual Communications
HERE PICTURE YOURSELF
WE’LL MAKE IT
Celebrating 25 Years of Implementable Solutions
www.norris-design.com
HAPPEN Give us a call 303.892.1166 and we’ll show you how!
builderconference.com/registration RMBC is excited to offer: 1 2 cutting edge, 90-minute educational sessions with top speakers ore than 40 exhibit booths from some of the M best local, regional and national companies Special events, including attendee-exclusive sponsored after party
Included in each registration is: 3 days of networking opportunities
2011 Rocky Mountain Builder Conference –
Schedule of Events Wednesday: October 5th 8:00 am – 7:00 pm Registration 8:00 am - 4:00 pm Exhibitor Move In 9:30 am - 11:30 am Government Affairs Meeting 1:00 pm - 4:00 pm Board of Directors’ Meeting 5:00 pm - 8:00 pm Opening Cocktail Reception
Opening Keynote session
8:00 pm – 11:00 pm After Hours Party
Full access to 12 top education sessions Unlimited access to the exhibit floor with more than 40 exhibitors
thursday: October 6th
Continental breakfast on Thursday and Friday mornings
7:30 am - 10:00 am Breakfast
Quality lunches on Thursday and Friday
10:00 am - 11:30 am Opening Session
Opening cocktail reception, including premium beverages, on Wednesday night
11:30 am - 1:30 pm Lunch
Cocktail reception, including premium beverages, on Thursday night
3:15 pm - 4:45 pm Education Sessions
Closing reception, including premium beverages, on Friday night
8:00 pm – 11:00 pm After Hours Party
PLUS, both Thursday and Friday have exclusive attendee-only after parties with live music and premium beverages, beginning at 8pm.
friday: October 7th
8:00 am – 9:30 am Political Funding Committee
$129
Full registration is only through August 15th!
Visit BuilderConference.com/Registration to register online with a credit card. 16
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7:00 am - 6:00 pm Registration
1:30 pm - 3:00 pm Education Sessions 5:00 pm - 8:00 pm Cocktail Reception
8:00 am - 12:00 pm Registration 8:00 am - 10:00 am Breakfast 8:00 am - 10:00 am Local HBA EO Council 10:00 am - 11:30 am Education Sessions 11:30 am - 1:00 pm Lunch 1:00 pm - 2:30 pm Education Sessions 5:30 pm – 7:30 pm Closing Cocktail Reception
CAHB General Liability Insurance Program Introducing the NEW CAHB General Liability Program in partnership with Vela Insurance Services and RPS, Inc. Through a unique partnership between the Colorado Association of Home Builders, Vela Insurance Services and RPS, we have been able to package an insurance program that provides competitive pricing and enhanced coverage.
General Contracting coverage includes: • Carrier Rating: A+, XV
• Deductibles starting at $2,500
• Flexible definition of classification codes
• $1M / $2M / $2M Limits or $2M / $2M / $2M Limits
• “Additional Insured” coverage for owners, lessors, contractors, scheduled individuals or organizations • Completed operations “additional insured” coverage for owners, lessors and contractors will be considered • $10,000 preferred minimum premium for CAHB members, depending on number of units built
• Tract or multi-family projects considered • Silent on punitive damages • Subsidence coverage available • No prior work exclusion • Defense outside the limits • Broad duty to defend • 48-hour quote turnaround
General Liability for Builders — Association member discount and broad policy language apply. Please keep us in mind for project-specific (wrap or non-wrap) needs as well.
How to access the CAHB General Liability Program: Builder & Subcontractor Members — Please contact your agent and tell them you want to be part of the CAHB/Vela/RPS General Liability Program. If you do not have an agent, you may contact the Colorado Home Builders Insurance Agency at 303-861-4172. Agents — Please contact Ralph Robinson at RPS. Phone: 303-955-2943 Email: ralph_robinson@rps.com For general questions regarding the CAHB General Liability Program, please contact Amie Mayhew at the CAHB office. Phone: 303-691-2242 Email: amie@hbacolorado.com
builderconference.com/exhibit Every successful company knows that networking is a critical key to marketing success. Our limited exhibition booth area allows continual close quarters engagement with prospects ; there aren’t hundreds of booths for them to get lost among. We structure the continental breakfasts, lunches and cocktail receptions in food and beverage booths among the exhibitor booths within the exhibit hall to give the greatest exposure and networking opportunities to both attendees and exhibitors. The exhibit hall is open from breakfast at 7am until after the cocktail reception ends at 7pm each day, giving exhibitors 12 full hours to mingle, network and meet a wealth of attendees.
Prime exhibit booth: $1,750 8 x 10 booth close to food, bar or entrance Carpet, table, 2 chairs & signage Option to provide marketing materials inside each registration bag Pre- and post-RMBC attendee electronic mailing lists Company name/link to company website on RMBC website 1 Full RMBC registration
standard exhibit booth: $1,500 8 x 10 booth Carpet, table, 2 chairs & signage Option to provide marketing materials inside each registration bag Pre- and post-RMBC attendee electronic mailing lists Company name/link to company website on RMBC website 1 Full RMBC registration
food & bar sponsor: $1,000 Company name & logo on signage in Food & Bar booth space Pre- and post-RMBC attendee electronic mailing lists Company name/link to company website on RMBC 18
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Great Floors & Finishes. Smart builders looking for increased profit and less headaches look to Saddleback Design. Saddleback helps homebuilders simplify the interior finish process for their buyers by offering a huge selection of materials, professional in-house interior designers, and the highest quality installations. The result ? The ultimate customer service experience for your buyers, and higher margins equaling greater profitability for you the builder. Give us a call today and see how we can help you.
SADDLEBACK
D E S I G N 2901-A Walnut St. • Denver, CO 80205 • 303.940.3932 • FAX 303.940.3794
builderconference.com/hotels Park Hyatt Resort & Spa
Beaver Creek Lodge
Pamper yourself with warm Beaver Creek accommodations, reminiscent of a mountain chateau. Rooms for conference participants at the Park Hyatt are $163 per night. Call 1.970.949.1234 or visit www.BuilderConfernce.com/Hotels to book your room online.
At the base of Beaver Creek Mountain, Beaver Creek Lodge offers a sublime retreat of mountain chic luxury. Rooms for conference participants at the Lodge are $133 per night. Call 1.800.525.7280 for reservations.
deadlines
These special hotel rates are available until September 9, 2011, however, either hotel may run out of available rooms at the Conference rate before that date. You must be registered for the Conference and mention Colorado Association of Home Builders & the Rocky Mountain Builder Conference to make your reservations.
hotel cancellation policy
Reservations will require a deposit at the time you call. Cancellation at any time will result in loss of your deposit. This is hotel policy, and there are no exceptions.
If you’re planning to stack prefabricated shearwalls, make sure they’re Steel Strong-Wall® shearwalls. Simpson Strong-Tie is now the only manufacturer to have a code-listed, two-story solution. Available in widths as narrow as 15 inches for stacked applications, our engineered walls allow you to build multistory homes with larger windows, doors and open spaces without sacrificing strength and required load values. To ensure your walls stack up, look to Simpson Strong-Tie for the widest selection of shearwalls code listed to the 2006 IBC (see ICC-ES ESR-1679). Visit www.strongtie.com/strongwall or call (800) 999-5099.
The only code-listed stacked shearwall solution. © 2010 Simpson
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Where the Professionals Shop Proud member of the Home Builders Association since 1953
Combining 220 years of employee experience in plumbing and hardware.
3200 Walnut Street • Denver, Colorado 80205 303.292.3550 • www.denhw.com
builderconference.com/sponsor Platinum sponsorship: $10,000 In addition to a host of other benefits, Platinum Sponsors also receive: 8 x 10 prime booth in Exhibit Hall 5 Full RMBC Registrations
gold sponsorship: 5,500 $
In addition to a host of other benefits, Gold Sponsors also receive: 8 x 10 booth in Exhibit Hall 3 Full RMBC Registrations
silver sponsor: $3,500
In addition to a host of other benefits, Silver Sponsors also receive: 8 x 10 prime booth in Exhibit Hall 3 Full RMBC Registrations
bronze level sponsor: $1,500
In addition to a host of other benefits, Bronze Sponsors also receive: $ 500 discount on sponsorship if purchased in addition to any booth
registration bag sponsor: $2,000 (1 available)
Company logo printed on cloth, earth-friendly shopping tote distributed to all RMBC attendees
room key sponsor: $2,000 (1 available)
Company logo & message on the front of all RMBC hotel room keys
water bottle sponsor: $1,750 (1 available)
Company logo on earth friendly refillable water bottles & water dispensers
wednesday after-party sponsor: $1,500 (2 available)
Company logo on sponsorship signs at the Wednesday After Party
friend of the rmbc: $500 registration bag materials: $150
Company materials inserted into RMBC registration bag (sponsor supplies materials)
1 Full RMBC Registrations
Please visit www.BuilderConference.com/sponsor for a complete list of sponsorship package benefits.
2011 Rocky Mountain Builder Conference Exhibitors (As of 7/5/2011) 1st Mortgages
GJ Gardner Homes
AJ Karas Auctioneers
HomeAid Colorado
Anchor Engineering
Hopkins, Tschetter & Sulzer
Arthur J. Gallagher Risk Management Services
Mutual of Omaha Bank
Bank of America Barvista Building Systems Colorado Chapter of the International Code Council Colorado Code Consulting, LLC 22
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NCFI Polyurethanes ProHome Colorado Reid & Wright, Inc. RPS, Inc. Schneider Electric Xcel Energy
www.hbacolorado.com
our 2011 conference sponsors: TITLE SPONSOR:
platinum: Online Marketing Managers
silver:
bronze:
Contractors General Liability Colorado’s New Admitted Carrier
Builders Insurance Group is proud to enter the Colorado General Liability marketplace, partnered with Western Pacific Insurance Network, Inc. (WPIN) as its wholesale insurance broker. As a local Colorado wholesale broker, Western Pacific works directly with Independent Agents to provide this General Liability product containing competitive premiums and broad coverages for general contractor home builders, commercial contractors, remodelers, and most trade classes.
Highlights and Options:
A- “Excellent” ADMITTED Paper
Primary/Non-Contributory Wording*
Fully compliant with CO HB 10-1394
Subsidence coverage*
No Super Montrose Exclusions
Per project aggregate limits*
$2,500 GC minimum premium
Primary limits up to $3m/$3m
$750 trade minimum premium
No tract home limitations
Blanket AI and WOS*
Premium credits (15%) available for builders who use approved home warranty programs
AI w/Ongoing and Completed Ops*
“ * ” - denotes optional coverage
About Builders Insurance Group Builders Insurance Group is a leading provider of General Liability and Workers’ Compensation to the construction industry. Headquartered in Atlanta, GA, Builders Insurance Group has delivered innovative, customized insurance products and services to the building community since 1992. The Company has extensive experience and understanding of the construction market and was founded by builders for builders. Policyholders can be confident they are receiving unmatched service, reliability and the financial stability of a secure partner. About Western Pacific Insurance Network, Inc. Western Pacific Insurance Network, Inc. is a specialty wholesale insurance broker in the Rocky Mountain Region, with origins tracing back to 1918. Through its partnerships with quality carriers and Independent Insurance Agents, WPIN maintains its ability to provide competitive products for Colorado contractors and contractors around the country. For more information, please contact or have your current insurance agent contact: Rick or Eric Richter Rick@wpininc.com Eric@wpininc.com Phone: 866-904-3777 Fax: 303-933-4500 www.wpininc.com 10397 W. Centennial Road, Suite 250 Littleton, CO 80127
C o l o r a d o ’ s e c o n o m y i s s lo w ly g r o w i n g
Smarter, leaner, stronger builders stand ready to meet buyer demand by Kim Jackson
A
fter being thrown from the horse nearly three years ago, many builders have dusted themselves off, shaded their eyes to see what the horizon looks like and climbed back on to round up today’s buyers. And if you managed to stay in the saddle during this last, hard economic ride, you’ve figured out what it’s going to take to keep building homes for the next several years. Sure, the landscape has changed; along with it are new opportunities and indicators that bode well for home builders in the coming years.
Colorado continues adding jobs
Colorado seems to have turned the corner on job losses; it’s added more than 4,000 jobs back to the economy in each of October, January, April and May (at press time, June numbers hadn’t been reported).
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“Those are good numbers,” observed Alexandra Hall, director of Labor Market Information and chief economist for the Colorado Department of Labor and Employment. “We haven’t seen those kind of numbers in quite some time and to have them grouped together like that, things are looking pretty good.” Since January, over-the-month change has been positive each month, too, giving Colorado several months of positive job growth. “We’re now seeing more months of up than down; it’s starting to look like a more positive pattern,” she said. Last June, it seemed that the worst of the recession was in the rear-view mirror and the state’s economy would grow again. But issues over sovereign debt came to a head with Iceland declaring bankruptcy, followed by debt issues with Greece, Ireland, Portugal and Spain. With the European Union focused
on creating bailout packages, our recovery fell, both nationally and here in Colorado. “It’s easy to think of Colorado as its own little island,” Hall said. “Over the past 20 years, the way our economies have become interconnected have been very profound. Our banking has been connected, as well, and if the current Greece debt crisis is not resolved, it will impact the European banking system, which will impact the U.S. banking system.” Looking back at the banking crisis in ’08, Hall explained that many of the jobs that were lost were lost at companies that had customers and a demand for the products they were selling. “But their business was based on a model that included having available a line of credit, and the lines of credit were just taken away,” she said. “So even if the business knew it had customers out there who would buy its product —
and would have money continue to come in — the banking system took the lines of credit away. That’s where tens of thousands of job layoffs in Colorado came from.”
most sectors report job gains
Yet, she reported, jobs have returned to all but three sectors in the state. Professional and Business Services has been growing for a number of months. “Tourism in the past six months has just been outstanding,” she noted. Trade, Transportation and Utilities has consistently grown over the past six months. The Education and Health Services sector has remained “a pillar of strength throughout the recession,” Hall said. “We never saw a decline in that sector and expect that will continue adding jobs as we go forward.” Leisure and Hospitality, along with Manufacturing have also shown signs of renewed vigor. At this time last year, only three sectors had added jobs over the year, “and now it’s the other way around,” Hall observed. “We’ve had three sectors that have NOT added jobs over the year.” Those are Construction (a loss of 9,000 jobs since last year), Financial Services and Mining and Logging — although she’s seeing activity return in that sector, due to the Niobrara Reserve.
Colorado also remains a desirable state, which means people continue moving here. “The recession profoundly affected the entire U.S.,” Hall noted. “In most recessions, people leave. We have people moving to Colorado and positive net migration.” The state Demographer’s office expects that the state will add 30,000 new residents a year, even in the face of softer growth, over the long term.
survey shows denver area will grow
Those numbers are consistent with findings from a recent Hanley Wood Builder magazine survey. According to Jay Peterson, regional sales director with Hanley Wood Market Intelligence, the Denver metro market is expected to grow at a rate of 1.3 percent a year. With a current population of 2.6 million, the Denver metro area is expected to have a population of 2.7 million by 2013. Eighty percent of the state’s population is along the front range; two-thirds of that is in the Denver metro area. “Colorado is such a desirable place to live,” Peterson said. “Nationwide, our population is expected to grow by 100 million over the next 40 years. For many of us, it’s the rest of our lives. We’re a fully industrialized nation that’s going to have population growth. And where that occurs, from
things I’ve read, a lot of the Midwestern areas are migrating south.” Case Schiller recently reported that from the peak to where we are today, the 20-city national index was down 33 percent. Denver was down 14 percent, or less than half. Peterson looked into those numbers more and found that according to the Multiple Listing Service, the Denver metro area year to date is only down 1.2 percent for the resale market. For new homes, though, the area is up an average of five percent, with an average new home closing price of $346,519. In light of last year’s tax credit that skewed numbers, detached single family homes are down only 14 percent from last year, while condominiums are down 62 percent.
job loss concerns hold buyers back
The Builder survey found that twothirds of potential buyers were most concerned about job loss. Of those surveyed, 95 percent agreed with the statement that they didn’t want to stretch finances to buy a new home; that’s up from over 80 percent from the previous year. “Obviously, there’s a big flag out there that people are very concerned with the economy and job loss,” Peterson said. It’s common now that couples who can qualify for more are opting for less, “in case one
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of them loses their job, they can maintain their mortgage payments,” he noted. The survey also found that nearly half of buyers would add $35 - $70 to their monthly mortgage payments for energyconserving features. Peterson said, “Some of their favorite energy efficient products are high-performance windows, high-efficiency HVAC, insulation that exceeds code. This is clearly something that’s here to stay — and that’s good news.” Buyers are becoming younger and want to spend more quality time at home. “They’re not free footing at the malls and restaurants,” Peterson said. “People are spending more cautiously and living simpler lifestyles.”
millennials will soon be the powerful buying force
And Millennials — Gen Y — are becoming a buying force. Born somewhere between the mid ‘70s and early ‘00s, and with a population of 80 million, they outnumber their 76 million Boomers parents. “The buying shift is going to change over the next ten to 20 years,” Peterson said of the transfer from Boomers to Millennials. He cited an AARP study that showed 80 percent of housing is inaccessible to Boomers, which means that “for now, I’d say we have another five to ten years of Boomers buying homes as they down size or move into maintenance-free patio homes. Another ten years beyond that is when Millennnials will really pick up.” Yet the Millennials fell off their horses, too, and the recession stunted their job prospects. “Therefore, they’re not out shopping for new homes as much,” he noted. “So when the market picks up in the next year or two, we’ll really start to see a resurgence and — an expectation that a lot of the builders are going to change their focus toward this group.” For now, though, many are living with roommates or their parents, waiting for the right time to buy a home. They’re joined by 138,000 previous home owners who lost their homes to foreclosure over the past six years. Whether apartments or another home, the rental market in the Denver metro area, is filling up.
full rental market will push people to buy
That’s more good news for home builders. John Covert, director for the Colorado and New Mexico region for Metro
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Study, said the continually filling rental pool, combined with a number of other trends, all point to good news for builders. “In general, up and down the front range, home builders have reasons to be optimistic,” he said. “A lot of segments exhibit strength — such as new energy, biosciences, aerospace and the health and hospital industries. We have a strong rental market. We have positive job growth, with nine consecutive months of job formation. We have positive in migration into the state, the front range and the Denver metro area.” Even with more people moving here than leaving “and a need for a place to live” Covert noted that some are opting to delay buying a home, “because they perceive it as a bad time.”
market message: now’s a great time to buy
Those perceptions may soon change, as the potential for building new homes improves. “Foreclosures and delinquencies are falling. Real estate values are down, but now in the single digits, and are more stable. New home inventory is very low for builders, and that’s a good thing,” Covert said. “Lot supplies are shrinking, in particular, in ‘A’ locations for specific lot types, product types and in certain price ranges. I would venture to say we have lot shortages in submarkets along the front range in certain price categories.” In his opinion, that’s a good thing. He sees owners and developers dust off products they’ve had in the pipeline since the middle of the decade — and get started again. Mortgage rates are still low. “With the pricing correction we’ve had, rates being as low as they are and people qualifying for a house who don’t have one to sell,” he explained, “we haven’t seen a better time to buy a house in this cycle.”
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buyers want master-planned communities
He added that 65 percent of all new starts in the past 12 months are in master planned communities. “Traditionally, it’s been 50 percent,” he said. “Buyers felt more comfortable going into a master-planned community, where the infrastructure was in place.” Stapleton is one of those communities. “Stapleton stood out because there are ten new projects that have or are going to open in the first half of 2011,” observed Mike Rinner, vice president with The Genesis Group. “You go into Stapleton and you build on ten or 15 or 20 lots, because if you do a good job, Forest City will keep selling you more. It’s been a smaller builder market there, because most of the big builders don’t want to go in and design a new product every time they get another 20 or 30 lots.” Yet some production builders, such as Standard Pacific, are making their way into Stapleton. “Part of the reason is that you’re not going to get rich on margins at Stapleton, but you’re not going to put the company at risk by building at Stapleton, either,” Rinner said. “We’re seeing large production builders who wouldn’t have looked at a project that didn’t have at least 100 lots now looking at 25 or 30
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lots, maybe even ten. Builders are looking at little niches, because the big home runs don’t exist — and the little niches will keep you in business.” Covert also sees a shift from entry-level to move-up buyers. “We’re seeing signs of pent up demand coming back to that higher price point,” he said. “From my standpoint, I’d like to see the economy and industry stand on its own two feet. The tax credit was like eating a Snickers bar. You feel a little bump and buzz, then feel worse when it wears off. We still have some headwinds to figure out. Consumers are smarter. Builders are smarter. We’ll have to figure out how to survive without the government supporting the industry.” That said, he expects the Denver market to end the year with around 4,000 permits. “Without the government behind us, we’re relying on organic growth, which is based on job growth and positive migration.” Rinner is looking at a slightly higher number to finish out the year — 5,000 — and reports that with foreclosures declining and rental vacancy rates falling, he expects people to increasingly buy homes. He observed that the detached single family home market has stabilized the last two quarters, and the number of homes going under contract in the
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resale market has been improving for the last three months. “Compared to 2009, when we didn’t have tax credits influencing the market, we’re getting better,” he said Even so, Rinner said that many current owners are going to delay or defer a move and continue to fix up the homes they have. Boomers are now downsizing and many want to live more maintenance-free lifestyles. Yet some won’t be able to make the change, because prices have declined and they owe too much on their homes. Others will find that they won’t have a lot of choices going forward.
builders find, create niches
It’s actually an opportunity for builders to capitalize on new opportunities. “All those shifts are going to change and builders — the smart ones, the good ones — are recognizing the market is full of these little niches,” Rinner said. Some have already shifted to building what consumers want to buy. For example, predominant multifamily builder Century Communities opened a new single family detached community in the Reserve at Wheatlands. “It’s a bold move,” Rinner said. He explained that the builder bought from a distressed land transaction there, along with duplex lots from a lender at Tallyns Reach, which
Century replatted for single family homes. “Both are oneoff situations,” he said. “They’re the kind of niches that are occurring, even in the high-volume neighborhoods, where you used to have a lot of competition among production builders. In the Reunion Community — a traditional, suburban, big-lot Commerce City housing market — Shea Homes has created its Spaces product, which are more contemporary in design “and it looks like something that would fit in a central Denver location or Stapleton. Yet they’ve been out there building that product; nobody is doing anything like that in a suburban location like thatThey created a niche for that product.” Other builders are playing big. At the Overlook at Heritage Hills, Rinner said that Celebrity Homes built four fully furnished and decorated models, starting in the $700,000s, which opened late Spring. “This is going out on a limb,” he marveled. “Yet in niche markets, people are doing that.” Meanwhile, back at The Ranch, where town homes were planned, Shea Homes changed the project to single family detached homes. “It’s a complete difference in their strategy and philosophy for that key infill piece of land in Highlands Ranch,” Rinner said.
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Covert added, “Being in the right location, building the right product for what the buyers want today is critical. We’re no longer operating on the assumption that if we build it, they will come. Builders have to be smart about what consumers will spend their money on.” That leads to market research, which is more critical now than ever, because, “the market is much more complex than it was 5, 10, 15 years ago.” Even so, there is money available in the capital markets. Rinner said, “Builders need to do good market research and really understand what they’re doing. To get capital these days, you’ve got to prove up what you’re doing. It helps if you’re a small builder to use a third party, because there are capital markets that are wiling to lend to a small builder.”
gaze into the crystal ball
Looking ahead, Hanley Wood’s Peterson said that for a population of three million in the Denver metro area, “when the market is in balance, we should be getting somewhere around 15,000 permits a year,” Peterson said. We have big upside and it will take several years to get there, but at least there’s growth going forward.” For next year, though, he expects about 8,000 permits.
Covert added, “I think 2012 looks to be a better year. People will be easing back into the process of buying homes, whether resale or new.” Although we still face high unemployment headwinds, he added, “at least we’re going in the right direction. The pricing correction has taken place. Builders have shored up their homes and are building them at a cheaper price — and with energy efficiency. Homes being built today moving forward are so energy efficient, it’s a strong additive for builders that resonates with buyers, that’s for sure.” Peterson expects to see lot inventory in the A and B locations continue to dwindle. “It’s going to make it further challenging for the small and local builder to acquire those lots to build and sell within the next six months. In other words, bigger builders will continue to gain market share.” And as new competitors emerge — often in the form of laid-off execs forming their own companies — Peterson expects that they’ll take away market share from bigger builders in their respective markets. “Smaller companies have a lot more flexibility than the larger ones,” he said, “so they can make quick decisions. I think we’ll also continue to see infill development, which suits very well with the small builder.”
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Colorado Builder Forum
July/August 2011
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by K i m J ac ks o n
“ If you would know the value of money, go and try to borrow some.” — B enjamin F ranklin
With an estimated 30,000 people
migrating to Colorado each year and declining resale inventories— including distressed properties —consumer demand soon will knock on builders’ doors for new homes. Yet unless and until builders get creative, they’ll be sitting on the curb, watching the parade of colleagues with construction loan financing pass by them. While small builders can build homes through the consumer getting the construction loan, many builders haven’t taken advantage of that route. Bryant Ottaviano, founder and CEO of 1st Mortgages observed that consumer financing is certainly available, but “there must be some hoodoo scare idea here as far as builders allowing the home owner to acquire construction financing, because it’s just not being taken advantage of in any way, shape or form.” He’s mystified by builders’ refusal to exercise this opportunity. “Here’s another option for some of these
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builders that aren’t capable of garnering private financing, and without huge investors behind them,” he said. “Why not build a house and earn ‘X,’ instead of building no homes, because you can’t earn ‘Y.’ This is something that builders can have in their back pocket to facilitate an additional home deal.” Ottaviano is working on a program that’s planned to launch later this year that will match existing his existing lenders and builders to justify establishing relationships with credit unions in the metro Denver area. “It’s a new program that will let us identify business partners we’re working with to be able to get them in front of these financial institutions. Because we have established a baseline with the builder and have a track record of closing on permanent loans, we hope to get him in front of the credit union — another potential source of dollars.”
Photograph courtesy of McStain Neighborhoods.
McStain’s Village Green at Indian Peaks in Lafayette features single family designs in three collections that range from the low $300s to low $400s, and from 1,376 to 2, 875 square feet.
He added that business lending is becoming more important to the long-term success of credit unions because they can’t continue growing mortgage loans. Because Wells Fargo and Bank of America are snatching up car loans at three percent, credit unions can’t get them either. “So they’re looking to the business side of the balance sheet, to help facilitate generating additional dollars,” Ottaviano said. “They have to do something with their capital. They can’t just let it sit in a money market account that’s earning them five basis points on a monthly term.” And you well know big banks aren’t lending money to build homes. Robert Edmonds, chief financial officer for McStain Homes, said, “Some of what’s going on in the banks is less about the bankers and more about the regulators. A lot of decisions have been taken out of the banks’ hands. So they can’t do good business, because the regulators have set a target they have to reach.” McStain’s President David Ware added, “Bankers have the cash sitting in their coffers and they’re
really losing money on the cash they have, because they can’t lend it out. In Colorado, there’s just not the heavy manufacturing and some of the other lending opportunities for the banks to get their mix of loans to balance the Fed’s requirements.” With regulators strong arming banks, Ottaviano observed that for builders, “the easiest route is private dollars. The builders we’re working with are all self contained; they have investors that are driving the dollars toward getting homes up out of the dirt. Private dollars are really the only dollars that are flowing right now.” It’s how McStain builds homes today. After haggling with the banks and waiting for decisions — sometimes as long as six months — Ware and Edmonds realized there was no return going down that avenue and the company soon would be out of business. And even if banks funded anything, it would only be pre sold units. “So we really got smart,” Ware said. “We put our heads together and said there are ways that people with money can make money, have the same security a bank would give and earn a better return on their investment.” They put a package together and since Spring 2010, “each home we build is individually private financed with net-worth individuals we know who have the ability, means and equity to do so.” While McStain has used private financing in the past, this time around, the builder provides more protection. McStain brings in the title company from the beginning of the loan, which is responsible for performing inspections and managing contractor payments for the lender. Yes, that’s right: Funds do not flow to McStain; they’re third-party controlled. In addition to getting a healthier return on their investments, McStain’s investors are in a first position on the home(s) and have all the protection of the lot if the house is not finished. As such, they can finish the house themselves or resell it. Investors also get all the types of security currently allowed, including promissory notes and deeds of trust. “McStain has been around for 45 years,” Ware said. “We have three real strong capital partners at our operating or overhead level. Through their resources, along with a few of our own, we’ve been able to round up a good six to eight individuals who are willing to finance anywhere from one house up to maybe four or five houses a piece. We’ve been able to put together a very successful and attractive package for these people, not only financially, but also risk management-wise.” What’s more, private financing has given McStain the ability to have a good balance of speculative and standing inventory. “Private financing has really allowed
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So far, it’s working well
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Rendering by Rick Barcelow
Photograph courtesy of McStain Neighborhoods.
It really requires a thorough investment package.” For each project, McStain puts together a 20-page document about the project, what the company is doing, why it’s doing it, pro formas, the ground cost and the cost to As a developer, as well, develop it. “It’s very transbanks have flat out told Mcparent. It’s a relationship, a Stain they won’t lend acquisipartnership, for sure. We’re tion or development dollars. building a long-term partnerSo McStain uses a small pool ship where we want to work of investors that finances the with them and when things acquisition, development go right, it does turn out to and entitlement on smaller McStain’s Meadow View in Longmont was completed in be a good win-win for us.” projects. “We just closed on a 2005 with several hundred single family homes, town They’ve tried offering priproject in Curtis Park — five homes and condominiums. The project was in the west central part of the city and incorporated open space vate placements for a group lots – and it was all privately and public trails into the community’s design. of individuals. “But we found financed,” Ware said. that those are a little more “Not only have we challenging,” Ware said. “It’s much more complicated and changed our financing approach, but we’ve changed our harder to manage. We’ve found that one-to-one relationproject approach,” he added. “Instead of buying big projships work better for us.” ects that take many years to get through, we’ll have more Ottaviano added, “Builders have to start getting sites that we’ll have to manage, but they’re much smaller outside the norm, and maybe even eating a little crow as in scale. They’re less risky and it’s an easier exit strategy if far as buyers are concerned. No one’s going to turn away it doesn’t work. Instead of buying a parcel of 100 lots, we a McStain purchase, with the name that they have, if they might buy eight parcels of ten lots a piece. That’s much have to finance their own dollars on it. It’s crucial to be more appealing, much more economical — not only for able to think outside the box and be creative in their apMcStain, but for an investor, as well.” proach to getting dollars. Being able to not worry about Edmonds observed, “If we were left to depend only on getting big banks to issue $10 million with no collateral the banks, we would have basically just faded into nothis a vital component to the success of all these builders. ingness. Private investors are what’s making us successful Period. End of story.” now, going from single digit sales, for example last year in Indian Peaks, to in the range of 15-20 this year.” Terms with investors are flexible, too. If McStain has a buyer for a home it’s building, the term is usually six months. “If we don’t have a buyer,” Edmonds said, “we’ll bump it up to nine or 12 months. Terms are negotiated on a case-by-case basis.” Investors usually roll their investments from lot to lot, house to house. Ware observed that McStain had a significant balance sheet deterioration as it did all it could to hold on through the storm. “I think it’ll be a couple years until we can stabilize our books enough to where the banks can see that we’ve made it through and prospered. Until that shakes itself out, us private guys will be very limited in what we can do with traditional institutions.” Even when banks return to construction lending, Located in the heart of historic Curtis Park, McStain Neighborhoods McStain is likely to use its current form of financing, as will develop five single family, Victorian-style, Energy Star ® -qualified well. “You’ve got to understand your risk,” Ware said. homes, starting in the low $400s. Private investors funded the “The more you understand risk, the less risky it becomes. project’s acquisition, development and entitlement. us to get our neighborhoods up and going, with a complement of inventory and choice for buyers throughout the process,” Ware said.
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July/August 2011
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Marketing technology gains traction
Use QR codes in your marketing to drive traffic and build your business By Kim Jackson
If
you’re looking for a way to effectively reach buyers as they zip past your spec homes or models, think about using QR codes to grab their attention. Short for Quick Response, these black-and-white boxed bar codes were created in 1993 by a Toyota subsidiary in Japan as a way to manage parts inventory. For most of its nearly 20 years, QR codes have been extensively used by a few countries, but only recently has it been catching on in the United States — as a marketing tool. QR codes can be instantly linked to web sites, videos, slide shows, even telephone numbers or e-mail addresses. And if you think using these codes is a marketing fad that will go the way of so many other flash-in-the-pan marketing tactics, think again. With more than five billion mobile phones in use worldwide, using QR codes puts smart marketers firmly in the driver’s seat, directing their target audiences exactly where they want them to go.
Industries use codes to drive business and help the public Savvy realtors in the resale market are using them on both their own corporate and homes-for-sale signage. It’s easier to point your smart phone at a QR code on a yard sign as you drive by, than it is to enter the entire website address on the sign — and hope you got it right as you continue on your way. The Denver Business Journal recently
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reported that Perry & Co. started using QR codes in April 2010 and its QR code-generated web site traffic quadrupled in just three months earlier this year. Consumer product manufacturers use QR codes to introduce consumers to a new product or guide them on how to use a product. Check out the coupon flyers of any Sunday paper and you’ll see many products now include a QR code. Advertisers in consumer, business and trade magazines now commonly include QR codes. In fact, the editorial side of many magazines now link their readers to specific areas of their own web sites through these codes. Some parks and municipalities are using them in their signage and on walking trails, so people can scan the code, then read a description or listen to a pod cast of what they’re viewing. Yet the codes themselves are still a bit of a curiosity. While smart marketers have embraced their use, many people don’t have a clue about what they are or what they do. I was at the Cherry Creek Arts Festival over the Fourth of July weekend, and the artists’ booth tags had QR codes on them. I was there late the first day and an artist I spoke with had just learned what it was. Once he knew, he grasped how using them could promote his art. Another beauty of using them is you can create as many QR codes as you want for various marketing campaigns. What’s more, you can track traffic, to see how well they’re working for you.
Getting started with QR codes Decide what you want your target audience to know about you or your homes for sale. Do you want to feature your home’s energy efficiency through a video, pointing out the areas of the home where your buyers can see what’s different from other builders’ homes? Do you want to show a series of photos that give your prospective buyers a tour of the home that they can’t do from the street? Do you want them to know what you stand for, your philosophy and what they can expect from you when going through the buying process? Do you want them to know how you can help them with financing? The beauty of using a QR code is that you can create as many codes as you want. That means if you answered “yes” to all the questions above, you can create a QR code for each area. Like any other marketing tool, too many can be too much. So as you learn how to create and use QR codes, decide which one or two areas are most important to you right now.
Select your QR code creation application. There are a lot of QR code applications out there. And they’re creating confusion. What’s happening in the QR codereading world now reminds me of what happened in the pet microchip world several years ago. You could have your vet insert a microchip under your dog’s skin, yet if your dog got lost and someone returned him to a shelter, chances were pretty good that the shelter used a different microchip scanner — and defeated the reason for putting a microchip on your dog in the first place. The problem was fixed by manufacturing a scanner that could read both major microchip products. What’s happening now in the QR code world is that competitors, such as Microsoft’s Smart Tag, JagTag and ScanLife have all popped up. To read each of those scans requires downloading more apps. So when choosing which application you want your audience to use, consider this: The number of people who have the app to view the code favors QR by a margin of two to one. For that reason alone, it make sense to use what’s most used by your target audience.
Create a QR code. It’s pretty easy. Just open the QR code app (and there are several to choose from), then follow the instructions for creating one. The code you create will directly link smart phone users to what will likely be a specific page on your web site. You’ll also probably want to track the traffic your QR code generates, so be sure to use an app that lets you do that. When directing people to your web site, be sure your site is formatted for mobile phone access. Otherwise, you’ll lose that forward-thinking, tech-savvy buyer before you ever get started. If you’re not sure whether it’s mobile
phone-enabled, check with your IT person, or use your own smart phone to see how your site interacts with it.
Make sure it takes you where you want your target market to go. Bring your newly created code on the screen or print it out, open the app, then center it on your smart phone and click to scan it. Or just pull it up on your screen, point your smart phone and scan. Most smart phones today come with a QR code reader already resident. BlackBerry phones can scan QR codes and load any recognized web URL on the device’s web browser. A QR code scanner is resident on the Nokia Symbian operating system and Google’s Android can access QR codes through its Goggles app or third-party bar code scanners. And more than 50 free QR code reader apps are available for the Apple iOS.
Use it in your marketing. If you’re participating in your Parade of Homes, drop a QR code on your signage. If you’ve built an infill home, do the same thing: put a QR code on your for-sale signage. Put one on your business card. Put it on directional signage and your community banners. Add it to your each piece of printed marketing material you have. Whatever you do, remember that once visitors click on the code, your site is then loaded on his or her smart phone, where it’s readily available to them any time. So be sure that it’s worth your prospective buyers’ visit. You also can track activity the QR code generates; you’ll know pretty fast whether it’s working for you. Its uses are only limited by what you can imagine. For example, if you use it on your Parade signage, you can give a visitor a private tour from the front door, throughout the house. After leaving the house in person, visitors can relive the experience on their smart phones. By the same token, if someone picks up a Parade book somewhere other than your home, your QR code with your home’s description can give them the same on-line tour. If you’re a supplier to a Parade home, you can use a QR code to direct visitors to how your products can benefit an existing home owner — or help them get financing for the home they just previewed. If you’re using signage to direct prospective buyers to your community, put a QR code on the signs. Again, visitors can take a “tour” of the community’s amenities and its homes at a time that’s more convenient to them, if they happen by and can’t stop for a visit. Even if you’re not tech savvy, many of your buyers are. While some won’t even see the code, others will grab their smart phones and snap off a scan. And something subtle about your company registers in their heads: If you’re using this technology in your marketing, you just might be using technology in the homes you build.
Colorado Builder Forum
July/August 2011
39
member spotlight
by Kim Jackson
The Mayhew family — Bryan, holding Henry, and Amie — takes a break from Independence Day festivities to memorialize the occasion.
A chance call changes career course
Now at the helm of CAHB, Amie Mayhew’s top priority is to promote and protect the industry at the capitol If you asked Amie Mayhew when she was graduated from her master’s program 11 years ago what she’d be doing with her career, she’d have answered something in public relations or communication management. After all, it’s what she was trained to do. But something happened along the way that changed the course of her career. The executive vice president of the Colorado Association of Home Builders is a native of Golden, who attended
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Wheat Ridge High School. She earned a bachelor’s degree in Communications from the University of Colorado at Denver and on its heels, a master’s degree in Technical Journalism/Communication Management from Colorado State University. She also has a master’s degree in Linens from Bed Bath & Beyond University, where she worked for three years during her undergraduate years. “What it meant is you get a discount on a really nice set of sheets if you actually went
through their training program,” Mayhew laughed, “which is why I did it.” While working toward her master’s, Mayhew also substitute taught high school. With master’s degree in hand in 2000, she said, “I was getting ready to begin the great American job search after college” and wanted to do something related to her degrees.
Life’s direction changed with a phone call Then her father called and made an offer she couldn’t refuse. “He said he’d make me a deal,” Mayhew said. “He’d pay all of my living expenses through the end of the year if I volunteered on the ‘No on 24’ campaign that was going to put him out of business.” Amendment 24 would have required elections for every land development project to be approved; the general public would have had to vote on each one. “That basically would have brought development to a halt,” Mayhew said. “As a land developer, my father cared immensely about that. He knew he had some Having met at 16, free help he could offer, and Amie and Bryan so he did. He sent me down to tied the knot 11 the campaign, where I probyears later. ably spent between 40 and 60 hours a week at that office, doing all kinds of things.” She volunteered on the campaign until it ran out in November. And that’s when her career changed course. “If I had been vice president of Communications before left to do my own thing, I taking on the role of Executive Vice Presidon’t have any idea where I dent for the association in May. would have ended up,” MayThe 18-year-old pair relax during a game of Trivial Pursuit in the mountains. hew noted, “but I can promise Top priority: Promote and protect you it wouldn’t have been industry at capitol here, because it wasn’t what I She leads the association at a time had gone to school to do. Yet in working on the campaign, when builders are heavily counting on the CAHB to defend I got the bug for political stuff. I found the campaign and them at the capitol — and launch offensive campaigns to all the inner workings to be truly fascinating. It was a great protect their interests. Mayhew sees the economy as the bigexperience. It was where I met Rick Reiter, who’s still rungest challenge to builders through the end of 2012. “More ning campaigns for us.” specifically, the biggest challenge is lending and getting money freed up so they can start building homes and selling them,” she said. Joined CAHB staff after ‘No on 24’ campaign And while she will not actively lobby at the capitol, she’ll It’s where she also met William Mutch, CAHB’s thenstill spend time there. “We’ve got three very capable lobbygovernment affairs director. “Obviously, home builders were ists who will take that role,” she said. “I’m very fortunate big time involved in the campaign,” she added. “When Wilthat there’s an amazing lobbying team in place that carries liam approached me about coming to work in a government out that mission and that there’s a brilliant government afaffairs capacity, it made sense because again, the campaign fairs committee sitting behind this team that helps them do and the politics of it all had interested me as I worked on what they do there.” the campaign.” Feedback from local chapters and members has repeatMayhew began working at CAHB in January 2001 as the edly stressed that the greatest value CAHB has to them is government affairs assistant. She was promoted to director the work done at the capitol on their behalf. “So that’s what of Communications and Government Affairs liaison, then to
Colorado Builder Forum
July/August 2011
41
In Memoriam
member spotlight
Mayhew began learning about the construction industry at her father’s knee — maybe as early as three years old!!!
we do and that’s where we need to put our energies, resources and time,” Mayhew said. “My number one priority is ensuring that we can promote and protect the industry at the capitol. This is what we do as an association; It’s what the members find value in and that’s what we’re going to do. We’re going to put all our resources into doing everything we can to promote and protect the industry at the capitol. This is truly what the association was designed to do.”
At home, ‘life is but a dream’ After fighting the good fight every day, believe it or not, she does have a life away from the office. Her husband of eight years, Bryan, has been in her life since they were both in high school. They met through each of their close friends and started dating when they were 16. “I talked to him for several months on the phone, because neither one of us had a driver’s license,” she noted. “And on my 16th birthday, I drove to Morrison to meet the young lad. We dated on and off for quite some time, then 11 years later, we got married and we’re living the dream — or so I’m told,” Mayhew laughed.
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Last year, Mayhew gave birth to their first — and only (she’s quite clear on that) — child, Henry. Now at 17 months, the couple is still amazed at the change in their lives. “It’s shocking and unbelievable, really,” she said. “Henry was having dinner at the dining room table the other night and was sitting on one of the dining chairs. “Bryan looked at me and said, ‘When did this happen? It wasn’t that long ago that you weren’t even pregnant and we were doing what we do. And now there’s a child sitting at the dining room table having dinner. How did this happen?’ “I said, ‘I’m not really sure, actually.’ Having Henry changes things a little bit, not by much. Everything is the same, other than the house is now filled with toys.” While she’d love to travel, there’s not much free time in the Mayhew family these days. Bryan is a fire fighter with the Department of Defense, which means he works 24 hour shifts. “That means there’s even less free time,” Mayhew said. “Right now, free time is sort of consumed with Henry and Bryan and doing what we do, hanging out with friends. The number of free hours is pretty minimal.” She’s also president of her home owners’ association. “That’s my fulltime volunteer activity that I get 25 emails a day about,” Mayhew quipped.
Gregory Timm
G r e g o ry D a l e T i m m , Born November 18, 1954 in Fort Hood, Texas, passed away on July 7, 2011. Timm graduated from Gonzaga Law School With a Juries Doctorate. He was active in the home building and business community in Colorado Springs from 1983 to 2011, when he passed away. Timm served as CAHB president in 1991 and as a NAHB BUILD PAC Trustee for Colorado. He served as National Representative to the NAHB from 1993-1994. In 1999, he was awarded Life Director status. In addition, he served on the NAHB Board of Directors from 1989-2011. Timm is survived by his loving wife, Judy Rae Timm, Children, Derrick Dale of Phoenix, Arizona and Kendra Elaine Timm of
Mayhew is at home with home builders
Colorado Springs. He is also
Although she could have gone on to do something else after the ‘No on 24’ campaign was finished, Mayhew feels comfortably at home in the world of builders. “It’s a group of really good people who work hard. They’re amazingly giving and smart, and they’re just fun. They do great things, both within the industry and outside of it.” She added, “I get the industry. I grew up in the industry, watching the whole thing go on. I like the people, I support the industry and enjoy the politics of it. I like to come to work.”
Danielson, father Dale Timm,
survived by his mother, Barbara and two sisters, Bette Timm and Sheryl Calcavecchia.
Memorial donations may be sent to Hospice of Arizona Foundation, 19820 N. 7th Ave., Suite 130, Phoenix, AZ 85027
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finance
by Bryant Ottaviano
Let’s get back to basics At a recent conference, Ben Bernanke was quoted as saying that tighter underwriting standards are playing an important role in suppressing the housing market. I thought we could take a look at the fundamental changes the mortgage industry has seen over the past 48 months that Mr. Bernanke references. I started originating mortgage loans in 1990. In the ‘90s, we underwrote mortgage loans based on five basic underwriting fundamentals:
1. Credit 2. Capacity 3. Capital 4. Collateral 5. Character All but one of the above items are tangible, provable items. Character was the only subjective function and in my opinion, was determined based on the strength of the other four. We had to prove all items to generate a positive response from an underwriter. We proved income and assets. We pulled a credit report (that didn’t have one score, much less three — AND it was sent through the mail!) and an appraisal, which took about 12 days, due to the photographs having to be developed.
Fast forward to 2005 I can vividly remember having a conversation with a borrower regarding qualifying for a home loan. The content was long winded like many of my articles, but the context was simple: The industry had adopted THREE main aspects to qualify for a mortgage loan.
1. Credit 2. Capacity 3. Capital If you had all three, you were going to get the best rate possible. As long as you had two of three, we were able to get you a loan — albeit a “sub-prime” loan, but a loan.
Move on to 2007 The conversation had changed to getting at least ONE of the three aspects to qualify for a loan. As long as you had a decent down payment, you could get a mortgage loan, regardless of your credit score or income. We had literally hundreds of investors that were ready, willing and able to offer this type of product to the buyer. Every prime mortgage company had a Sub-prime division that took the fallout from the Prime division. Fannie Mae and Freddie Mac even got into the game with expanded approvals! Everyone was fat and happy, due to no one ever
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getting turned down. If you couldn’t acBryant Ottaviano quire a mortgage loan from 2005-2007, 1st Mortgage you just couldn’t fog a mirror. Founder and CEO Then something happened. Apparently a fixed income borrower, with no money down, no reserves and weak credit could not justify a $6,200.00 a month payment. The payment shock was just too much for them to handle and since they couldn’t refinance the home, they had to let it go. Of course you know what happened next.
2011: New rules (again) We don’t just verify your income with a pay-stub and a W-2; no that won’t work. Today, we verify:
1. Pay stubs, plural dated within 30 days of the closing 2. A verbal verification of employment completed before closing 3. W-2s from 2009 and 2010 4. Tax returns from 2009 and 2010 5. Proof from the state that the company actually exists 6. A transcript of your tax documents used for qualifying 7. A written verification of employment And on and on and on. The question in every underwriter’s head when shifting through the 200 or so documents in a file is not IF this loan is going to default, but WHEN it will default. Gentle Ben is 100 percent right in his analysis of the current mortgage market underwriting standards: They are way too stringent. Investors have lost touch with logical thinking. We currently believe that everything is fraud. Time will heal all of the current ailments that we as an industry are facing. Our ability to sift through the appraisers that get paid up front for incomplete error filled garbage cans. The inconsistencies applied from one loan to the next by an underwriter that just found out he/she had a loan go into default, will be replaced with the idea that real estate is a good investment. Here is a real simple question: Without default — or the risk of default — how can we justify charging interest to people? Bryant Ottaviano is the Founder and CEO of 1st Mortgages located in Littleton. For more info: www.1stmtgs.com, bottaviano@1stmtgs.com or call 303-798-6100.
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