February 13, 2013 · 1 Comment
What real estate education lessons can investors pick up from America’s largest home builder for constructing billion dollar businesses of their own?
With nearly $15 billion in annual revenue Pulte Homes is America’s largest home builder by market value, and most of those in real estate investing today only dream of those types of numbers. Still the Michigan based home builder was built on the personal brand name of its founder Bill Pulte and now has the wealth to acquire other billion dollar companies to fuel further growth, so there is hope for all investors that heed and adhere to sound business and investment principals.
So what can investors learn from Pulte to build wildly profitable and lasting business of their own?
3 powerful real estate education lessons from America’s largest home builder:
1. Focus on the Right Metrics
While U.S. home builders are having a hard time keeping up with new demand and are racing to launch new projects Pulte is taking a different approach. On a recent conference call the builder’s CEO said the company is “purposefully slowing our rate of sales as we focus on maximizing margin over driving volume”. It’s a strategy that seems to be working too as the home builder reports a 27% jump in orders in the last quarter of 2012, while profits quadrupled.
2. Customers for Life
Pulte Homes’ motto is “Homeowner for Life”. What that really means is that they plan to gain customers as first time home buyers and retain them as they move up to estate sized homes and even move into retirement homes later on in life. Far too many investors miss this critical real estate investing education and business lessons. They only focus on the next deal and next dollar and miss out on millions in easy money from past clients and cultivating prospects in their database.
Pulte takes diversifying seriously and is no doubt one of the major factors which has enabled it to survive the recent downturn and still emerge a formidable corporate giant. The builder operates in 26 states (51 markets), is involved in a mix of different housing types and has branched out into mortgages and other niches through subsidiaries.