Epcon Builder Stories With Chad Weaver of Weaver Homes

 

Meet Chad, an Epcon Franchise Builder in Pittsburgh, Pennsylvania. He fully understands the mind shift in going from a custom builder to an Epcon builder, having experienced it first-hand alongside his father, who became an Epcon Franchise Builder in 1999.

 

Megan Ronquillo:  Hi, Chad. Great to see you today. I thought we could just start off with you telling your story. Are you a second‑generation builder or third? I can’t remember.

Chad Weaver:  My father started the business in 1986 at the age of 40. He had worked for a big, commercial general contractor and developer and decided at that point in his life that he wanted to go off and do his own thing; that was 1986. Was a custom builder, did his own land development until we joined Epcon in ’99, but he started from nothing, and nobody gave him anything. It was a neat story. I grew up in the business. I was 12 when he started it. Sweeping floors, framing, and whatever needed to be done.

When it was time to go to college, I wanted to be a pilot, but I couldn’t afford to go to flight school. I went to school for construction management and got out of school in ’95. Worked in the field for about five years. At that time, my dad hadn’t started Epcon yet.

One day I was living in San Diego quit my job and went to flight school. Finished all my ratings got hired at the airline, and then 10 months later 9/11 happened. My timing was bad. At the same time, my dad’s business continued to grow.

We had our first child. We lived in Atlanta. It was 2005. I wasn’t making any money flying. There wasn’t much of a career there didn’t appear to anyway. We packed up our stuff and moved to Pittsburgh. It was my dad and my mom, and I and our land development manager who’s still there with us today.

Started these four of us, doing one Epcon project at a time, and it’s grown into 33 people now. First‑year, I was there, we closed 25. This year, we’ll close 150. Yeah, it’s been a journey, a good one.

Megan:  That is quite a growth track.

Chad:  It’s been challenging. One of the speakers today talked about the steps as you grow, where you get to a certain point, and you have to grow, and you add so many people that it’s not really effective until you can kind of flush it out all the way until you get to that next stop.

I feel like we’re at that next stop now. Trying to manage that and hold on to what we have. I don’t have any desires to be much larger than we are. I’m comfortable now, everybody does well. I think my dad’s influence on me and my mom, who works in the business as well. It’s been a good opportunity that they gave me, so I try not to mess it up.

Megan:  Interesting. What was your dad working on in ’99 during that time?

Chad:  He was only building custom single‑family homes. We had neighborhoods in around Pittsburgh where they would have five or six builders. You would have a lot to draw. He was trying to get customers, pricing houses out, losing a house over a dollar per square foot, meeting people on weekends, nights picking out different finishes.

He had known about Epcon and always wanted to do it and somebody approached him, an investor approached him and said, “Hey, what do you think?” My dad took it and never looked back. We still build a few semi‑custom homes, but as soon as I finish up these two neighborhoods, that’s it, we’re done. It’ll just be all Epcon because it’s a lot easier.

Megan:  You said 150 closings this year?

Chad:  Yeah. 150 of that. Probably 100…I don’t know the number off the top of my head, but 130 will be Epcon.

Megan:  How involved are your parents in the business?

Chad:  My mother still does our settlement coordination with all of our customers. She’s involved on a daily basis, but she can do it remotely, which is nice. They’re in Florida most of the winter. My dad’s still there for support, just an advisor‑type of role. He doesn’t really have any day‑to‑day responsibilities at this point.

It’s nice to always have him to ask that question too if you’re stumped or just somebody to sound something off of.

Megan:  Chad, what do your kids think about the business?

Chad:  My oldest is 17. He’s going to be a senior in high school, and he wants to be in the business he claims. My younger one’s 13, so he doesn’t know what he wants to do. We’ll see. It’ll be cool to have third generation, but my dad never pressured me. I don’t plan to pressure them. If they want to come in, they can. We’ll see how it goes.

Megan:  Awesome. You guys started Epcon in ’99?

Chad:  ’99. Building the quads. The Abie and the Villa and the Chateau and the Canterbury.

Megan:  How do you feel that Epcon has helped you to scale up in the last 20 years?

Chad:  I think just being in a neighborhood that was a concept that we never considered. You really can as a small custom builder to have a community that is just yours, essentially with your own salespeople, that work just for you and, and be able to control the process.

Really, it’s a mind shift to go from a custom builder to an Epcon builder, and even more so back in those days. Phil mentioned it last night, but it was literally you had five choices and three of them were carpet color. Not a lot of options.

It’s very liberating at the same time. It’s a lot easier to control your costs, understand what your margins are going to be, what they should be. I tell people I can have one project manager build 30 to 45 Canterburys in a community all by himself. You take that same project manager and build custom homes, you need probably one for every five or six if it’s a true custom home.

When you sit back at the end of the day and you look at all right, the value may not be there in terms of the sale price. Therefore when you translate that to your margin, maybe I wouldn’t make as much but are you really making that net 10 building a custom home? The answer is not that people don’t, but people are honest, they usually don’t.

You’re making more with less is the way I would like to put it. It’s easy.

Megan:  That’s a great way to look at it.

Chad:  Not as easy as it used to be, but it’s easier than custom.

Megan:  Do you think that that’s cyclical, that it’s going to come back around and beat you here in the next five years?

Chad:  When I say easier, I mean just in terms of the options and the expectations of the customers. No, I don’t see it going away. Part of what I think we’ve lacked or we’re lacking with Epcon is the price point. I was over here, it was four or five years ago, and I told Phil this the other day.

He said out of the last downturn that they had some, A, B, and C locations. He said, “The one thing I learned out of this is we’re only going after A or A‑plus.” “Well, that’s great and I respect that, but you have to pay for A or A‑plus.” What happens when you more for the dirt? Your finished lots are more expensive.

What has to get more expensive along with it are the houses. I feel like that over the last five or six years has driven the product development selection and the trajectory of Epcon, and therefore the franchisees.

For those of us that don’t build in Raleigh and Charlotte and some markets that can substantiate an $800,000 slab on grade home, we’re missing that part of the market where Epcon started with a less expensive, whether it be a townhome.

That there’s a missing piece out there for a lot of people that can’t and that’s what carried us through the recession, was selling $250,000 quads back in ’07, ’08, ’09. That’s what saved us.

To go to that far end of the scale, to go to the top of the pyramid where your buyers obviously they’re there. What happens when interest rates go up? What happens if and when there’s the next downturn? It’s a lot more comfortable down here where there’s more people to sell to than being at the top of that pyramid of pricing.

Megan:  Chad, what else about doing the Epcon product do you think helped to carry you through the recession?

Chad:  I think we had two projects going at that time. That buyer profile, they don’t always move because they want to. Even when there’s a recession, people continue to get older. They continue to not be able to use stairs.

A lot of them, honestly, paid cash and continue to pay cash to this day. If you’re invested properly and you’re at that point where you’re retired or either going to retire or retired, you’re not really in the high‑risk things that a lot of people felt.

They just got to the point where they worked their whole lives and they wanted what they wanted, and they were willing to pay cash for it. They wiped out a lot of builders.

In our market, a lot of guys that started before my father started that I remember back in the day were just huge custom builders. These guys were building for us huge 50 to 60 houses a year. They just disappeared. They’re just gone. Here we were building five or six, and we’re still standing. That’s pretty good testament to the product and what it’s done.

Megan:  Absolutely. A lot of people are concerned about how this industry does go up and down, and where they’re going to be when the next step happens. To know that they’re mitigating the risk to some extent by joining Epcon, can you speak a little bit to that?

Chad:  Absolutely. There’s more of a risk if you’re going to develop your own dirt, which we do. Again, we’ve grown slowly over the years, not by taking every opportunity that’s come, or I think land is too expensive, or if my gut tells me it’s wrong, we don’t do it.

You can’t pay overpay for dirt because at some point, it’s going to go back down. I don’t want to get ourselves in a position that a lot of other builders were in. In the last downturn, we were positioned in the right spot at the right price point. Again, back to the product offering that Epcon has is having something that’s a little less expensive because we can’t build the quads anymore.

Megan:  You have a standard that you set for yourself and for your team. How are you communicating that to everyone? Is everyone on pace with you?

Chad:  Just leading by example, treating the customer right, always going back no matter how long it’s been. We’ve had instances where sell a two‑story portico, and somebody doesn’t use the upstairs tub for three years. We make mistakes. They have family over. They use the tub, and there’s a leak. Well, that shouldn’t be. We’ll go out and fix it because it’s the right thing to do.

If you treat people the right way, respect them, give them room to grow, and then give them the tools they need to better themselves. We don’t have a lot of turnover which, back to your other question about profitability, helps my very, very limited turnover. It’s a good group, good team, like a family, trying to make like an extension of the family.

Megan:  When people do their jobs well, they become really efficient at it.

Chad:  At the end of the day, it’s my last name on the door. As you grow, you lose the control of price to have interaction with every customer. Now you’re trusting other people essentially with your name or your reputation.

You want to be sure that they’re treating them the same way that you would. That’s where finding the right people, leading by example, making sure everybody understands the message and the vision. Ours is, basically, we take care of the customer.

That means a whole lot of different things. It’s cliché to say, but at the end of the day, it doesn’t end with them moving in. We are fanatical about our warranty. I have four people. For the amount of homes we build, three full‑time, another guy that kind of floats around. We’re not perfect. We don’t build a bad home, but we initiate the point of contact within 45 days and a year.

Something happens in between, we’re out there. We’re seeing them twice after they move in. That’s where a lot of builders get maybe hung up. That’s where reputation can be degraded, is that you don’t…

I tell everybody, “You could build the greatest house in the world, have no punch list, turn it over. If you don’t take care of him in that year, then all that’s for naught. A warranty is a big part of what we do and our reputation, I think.

Megan:  Chad, what do people in your area know you for?

Chad:  Quality family owned. We live there. We shop there, obviously work there. There’s some value to that. Obviously, we can’t compete with the national builder that’s in our market price‑wise, but there’s a certain percentage of the population that is willing to pay a little bit more, not if they just perceive the quality is better, but it has to be there.

Every market is different but trying to figure out, “OK, well, how do I set myself apart from a national builder?” “Is that the furnace? Is that the flooring? Do I put a wider base or trim?” Whatever the case may be and not being afraid to ask for a little bit more because you do those things.

I found that people are willing to pay. There’s always a limit, but people are willing to pay for the quality if it’s there, but you have to follow through. Like I said, that means all the way through warranty or the perceived value goes away in a hurry.

Megan:  That’s fair.

Chad:  As it should.

Megan:  You’re doing great, by the way. Chad, let’s segue a little bit here. What’s your biggest challenge right now in the business?

Chad:  The biggest challenges right now that we face, in order, I would say labor, material, and land.

Megan:  Chad., looking ahead, what are your plans for the future?

Chad:  I’ll be 57 in 10 years, so I’d like to be semi‑retired. Hopefully, my boys come back in the business, and still building Epcon, and enjoying life, and just telling them I’m going to go hopefully still flying airplanes.

Megan:  Do you have goals in mind for the next three years and where you’d like to be in terms of closings?

Chad:  I’ve always said when we started, 50 was the number I told people. A lot of my subcontractors have been around since that time. They give me a hard time. They say, “You always said no more than 50.” I know. I mean it. Then it 75, and I’m like, “I know.” Then it was 100. I know. Now it’s going to be 150. I’m like, “Yeah, but this time that’s it.”

I don’t want any bigger. It’s difficult to say that that’s what we’re going to do. Ideally, that’s what I’d like to do. I’m comfortable where we’re at. I don’t want to have to take because we’re at that point where the next big jumps can be expensive.

Who knows? New opportunities come. There’s going to be opportunities coming out of this next…Call it recession or downturn. Like the last one, if you have the money and you’ve done well, then you have the ability to take advantage of some situations, not that you want to prey on somebody that didn’t succeed, but at the same time, it’s business. We’ll see. It’ll be exciting.

Megan:  Absolutely. Chad, what would your advice be to people that are considering Epcon?

Chad:  Do your homework. Understand the market you’re going into. Understand that it’s not a custom home that you have to be able to say no to customers. That’s OK. Know your numbers. You have to be good at everything. You don’t have to be great at everything, but you have to understand how your business runs. You have to be involved in the business.

It’s not a part‑time job when you’re doing it when you’re starting out. It was just me and my parents. That was 60, 70 hours a week. I’m fortunate now that I have a little bit more time because I have a staff and a lot of good people.

It’s not a part‑time game. It’s not easy. You don’t see the fruits of your labor until a few years into it, but when you do and you build the company, and then it starts to succeed, it’s fun. It’s a good ride.