Expansion-minded firm calls itself the first tech-powered homebuilder
Upstart Welcome Homes is looking to revolutionize the homebuilding process. For now, that revolution will begin in the tri-state area – New York, New Jersey and Connecticut – that conveniently happens to be the site of major battles of the American Revolutionary War.
“Order your dream home. Online,” the company website reads like construction clarion call. Would-be buyers of custom homes are enticed to customize to their liking, with new homes in the New York metro area from $717,575 to $3 million. The company boasts of having pre-approved properties in the tri-state area with additional areas available soon.
Part of the revolution is based on the short time it takes the company to actually build its homes and the pre-cleared nature of the land on which customers are able to build, Benjie Burford, vice president of sales at Welcome Homes, told Mortgage Professional America in a telephone interview.
“Custom homes are out of the reach of most people,” Burford said. “They’re very expensive to do. You have to make a lot of sunk cost investment up front on design and engineering review of land and quite frankly sometimes that goes nowhere. You can spend $10,000, $15,000 evaluating a piece of land and find out you can’t build a house on top of it. So, we’ve removed that uncertainty.”
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Then there’s that time element: “Another thing is we shortened the time period,” Burford said. “Doing a custom build easily takes 24 months. We can build a house within seven months of getting a permit. If you can afford a house in the million-dollar range, at least in the Northeast, you might not be able to afford the time to do that. We really help them from a time investment standpoint.”
Agents stand to benefit as well, he suggested: “And from the agent’s standpoint, they don’t have to do design meetings or anything. That’s all done for them. They get excited because if our base price of the home for a smaller home is $600,000, we work with the buyer and they end up doing $115,000 in upgrades, guess what? The agent gets paid on those upgrades.”
The agent realm was recently boosted thanks to a nascent marketing agreement signed with Compass largely toward the end of better training, bolstered incentives and bigger commission payouts, Burford noted. Gordon Golub, regional vice president at Compass, explained the impetus behind the agreement: “The way people buy and sell real estate has evolved more in the last two years than any other time in recent history,” he said in a prepared statement. “Brokerages that innovate the fastest will be able to bring the most value to their agents and in turn their clients. Our relationship with Welcome Homes is a great example of adding value in the midst of this great evolution that we are experiencing as a company and an industry. There could not be a better time to form this relationship because of the existing inventory shortage in today’s market.”
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Welcome Homes has benefited from venture capital backing, including previous rounds of seed and SAFE funding, Burford said. He added that the company is currently poised for a third round of funding.
So why limit activity to the Northeast? “Quite frankly, if you can build in the Northeast – and work in such places as Westchester County and the Hamptons where it’s not easy to build – you can build pretty much everywhere,” Burford said. The terrain of the tri-state area is varied, with an abundance of hilly topography and the presence of wetlands and swamps, he noted. “There’s a lot of challenges to building in the Northeast. Over half of the houses building now are on septic. It’s challenging.”
Any other place to build would be somewhat anticlimactic, he suggested. And, to be sure, the company is currently eyeing others parts of the country for expansion, he added. “We’re getting ready to expand to other parts of the US, so in the next few weeks you’ll see news come out,” he said.
