Leadership
Davidson Homes Gets In Growth's Fast-Lane As It Builds Out Its Destiny
An up-close deep-dive into one of the nation's dynamically growing private homebuilding operators at a moment outlier-winners will take all.
- Think Ashton Woods ceo Ken Balogh, circa 2011.
- Think LGI Homes ceo Eric Lipar, circa 2012 or so.
- Think Dream Finders Homes' ceo Patrick Zalupski, circa 2018 or so.
If you knew Ken, Eric, and Patrick back when, it's absolutely no surprise to see today what they and their organizations meteorically have morphed into since, each with annual revenues in a range of $2 billion to more than $3,500 on yearly closings from 6,000 to 8,000 a year.
To that point, we wrote this in a profile of Ken Balogh, in 2011.
Jerry Patava, [then] CEO of [Ashton Woods owners'] the Great Gulf Group, says, 'When someone's handed significant responsibility without having significant years of legacy issues clouding the picture, usually that person proves to be talented beyond his years. That's what we're finding with Ken Balogh.”
In each case, a common ground observation you might make of Balogh, Lipar, and Zalupski is that they – and the leadership teams they assembled – strike a perfect blend of the entrepreneurial fire, drive, customer focus, and business cultural commitment of a private homebuilder and the professional process, management, and resource allocation discipline of a public builder.
Now, think, Adam Davidson, circa 2023.
You'd now be in the same realm – Balogh, Lipar, Zalupski, and maybe add, Wade Jurney for good measure. They're individuals that, when you listen to them, you come away feeling some big things inevitably lie ahead.
For Adam Davidson, the team he's building, and the impetus of vision and execution driving them, big things – potentially very big – lie ahead. Huntsville, AL-based Davidson Homes is on pace to grow about 20% in home deliveries in 2023 – to roughly 1,200 new home deliveries -- as it fleshes out, digs in, activates, and ignites existing and new-home community growth across its five-division, five-state geographical footprint. The stated aim by the end of 2024 is 60% to 70% growth.
Still, at the end of the day, the trajectory for Davidson Homes – an enterprise that played in a single-market as a pickup truck spec builder for upwards of seven years from its founding in 2009, and only broke 100 home deliveries in 2017 – to listen to Adam Davidson is, well, the sky's literally the limit.
We have a short-term goal in 2026 of 4,000 home closings," Davidson says. "But I think, I've got more like 20,000 closings that we'll get to at some point. I'm a very competitive person. The way I look at it is that if Bill Pulte or Donald Horton or any of the others did it, then it's possible for me to do it as well. Of course, that's provided that I'm willing to go through the sacrifices that those guys made to to get to that size. Everybody has a different measure for what they call success. I don't necessarily have an end in mind, as far as closings go. It's about competition. It's about doing all that you can do with your talents. And if that talent gets us to $1 billion a year, $2 billion, or $20 billion, who's to say? What I do know is this: We owe it to ourselves to do as much as our God given talent allows us. And so that's my goal.
When Adam Davidson speaks of talent, he's talking not just of Adam Davidson's abilities. Rather, he's talking of a growing strategic and operational team, one that – like the teams Balogh, Lipar, and Zalupski put together -- combine the skills, capability, experience, and business cultural chops of "the best of both worlds," private and public homebuilders.
Arriving in March to supercharge those talent- and capabilities-building initiatives at Davidson Homes, former PulteGroup senior vp of Field Operations Brandon Jones, joined on with Davidson as ceo. Jones has since doubled-down on bringing public company skillsets, strategic solutions, and disciplines to a highly motivated five-division team of operators.
Davidson, who'd cut his teeth as a superintendent at D.R. Horton after graduating from University of North Carolina - Charlotte, and after two years at Horton, struck off on his own to start building spec homes at age 24. From a point, he says, where "I didn't know half of what I thought I knew," to, seven or so years later in which he'd learned every detail of every part of making a business work – Quickbooks accounting, marketing, sales, construction, purchasing, land, you name it – he realized one thing.
We broke 100 homes in 2017, and it dawned on me. When you're really small, it's hard to attract good talent unless you're lucky. In 2018, when we finally started to scale up, I realized that talented people finally started to get interested, and it started to snowball. Brandon Jones probably wouldn't wouldn't have come to work for me in 2018 when we were doing 300 closings. But when we reach the 1000-closings range, we start to get to tap into the really good folks. I've had lofty goals the entire time, I guess."
Jones tells us the focus in the 2023 to 2025 timeframe is two-fold.
One, continuing to stabilize and establish a rhythm to the business and consistency of performance in our existing five divisions – Raleigh, Houston, Atlanta, Huntsville, and Nashville," says Jones. "Two, aggressively growing the business. We've got a three-pronged approach to grow. One, we want to organically grow our existing divisions through continued investment in those markets. Our second growth strategy is centered around opportunistic builder acquisition. And this is where Adam spends most of his time. He's, he's full-time looking at different builder targets.
Three, expanding – organically or via M&A, into new markets. For example, we hired a division president in San Antonio, and that division president is building a land pipeline. He's done an excellent job putting under contract a number of land deals. Based on what he's done, we can now build a team around him. For us, it starts with getting a good land person, and turn them loose to acquire land deals. At that point, we hire construction, sales, land development and the other supplementary roles to build up the business. We're doing the same process we've done in San Antonio in Central Florida, Austin, and Charlotte."
For these organic expansion opportunities to work, finding the right people – skills, experience, relationships, trustworthiness – has been a critical dimension, Jones said, leading to work with FTS as a strategic and talent solutions partner.
Brandon and Adam and their team combine that serious A-one level of sophistication with the fact that they're just some of the best people in the industry," says Thomas Carpitella, founder and ceo of FTS. "They've got that maniacal attention to building something different, and the way they're doing it is different from a cultural standpoint in the way they approach talent. They're taking everything that they've learned over the last 25 years at publics and doubling-down and all the good stuff and getting rid of all the unproductive things. Their playbook is fast, and it's all centered around people to fuel their growth in acquiring and generating value for their assets."
The business cultural emphasis comes from the top, as both Adam Davidson and Brandon Jones recognize ways their instincts, talents, and passions complement one another in a way that can accelerate an ambitious thrust to scale fast.
I wasn't searching for a CEO," says Davidson. But I had my antenna up. If I had an opportunity to run into the right one, I'd pull the trigger. That's what we did. Brandon has a lot of traits that I don't have, and we offset each other very well. As he said, I'm a construction guy. I'm more like -- 'put me in the back and let me run a bunch of numbers and strategize.' Brandon's extremely good with all the people, communicating, motivation, management process, etc. As you grow and bring on more employees, and as you set goals of where we want to go, you've got to know how to motivate different types of people and help them execute but also be excited about all that at the same time. Brandon's a whole lot better at that than I am. So there's been a ton of improvements in Davidson Homes since March when Brandon joined us."
For private homebuilders – even the stronger, less bank-finance-tethered operators -- to survive and thrive in a 2023, '24, and '25 marketplace likely to endure higher borrowing costs, sharp economic bumps, and a choppy demand backdrop – an asset-light, low overhead, high-velocity rhythm, as Brandon Jones calls it, means practically flawless execution on top of outsized hunger and resolve to win.
There's just so much going on in so many places, and everyone's evolving and changing at the same time," says Davidson Homes ceo Brandon Jones. "We're building infrastructure to create our long term success. When you transition from entrepreneurial bootstrapping into a bigger organization, you have to establish a those processes and that infrastructure, so that the business can sustain itself and grow more organically rather than as a result of brute force. That's the transition that we're going through right now. It's not unlike fine-tuning a car while you're also stepping on the accelerator. And, moreover, we're trying to work under the hood at the same time that we're trying to race around the track. So it's not, it's not without its risks. Fortunately, though, because it's been so entrepreneurial, incremental, positive change, is actually also low hanging fruit. There's kind of basic fundamental approaches to running a homebuilding operation that are easy to implement. They're easy because you're not changing an existing paradigm. Instead, you're implementing a completely new one that maybe it didn't even exist before."
When you think Adam Davidson, Brandon Jones, and their team, think big. You'll be right.
Staffing and recruiting done right. Fast Tracking Solutions specializes in delivering top talent in accounting/finance, construction, and technology operations.
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