Think building custom homes is a good way to make a living? Then take this one-item test: Would you like to see a child of yours grow up to do your job? We posed that question to a handful of custom builders around the country, and judging by the long pause that often followed, we touched a nerve. That should come as no surprise. The builders we spoke with have all built successful businesses, but their work still dishes up ample helpings of stress, change, complexity, responsibility, and risk. Still, each respondent in this unscientific sample eventually caught his breath and answered with a solid yes. The reasons why they would recommend the business to their children—and their qualifications—say much about the job: It is hard, probably getting harder, but they find it deeply rewarding. Some custom builders, it seems, are having a lot of fun at work.
First, the hard part. In engineering terms, a perfect structure distributes stresses evenly rather than creating potentially dangerous concentrations of stress. The custom home business is an imperfect structure. Stresses generated by clients, architects, subcontractors, and municipal bureaucracies focus disproportionately on one figure. And as Boston-area custom builder and remodeler John DeShazo notes, “You’re definitely that guy.” Changes in the regulatory environment have made the stresses from that direction particularly intense, raising the bar for the next generation of potential custom builders. Steve Malcolm, a custom builder in Boothbay, Maine, says, “It would be hard to start a business on your own in today’s world. You’d have to have a much better understanding of the business side of things than we had when we started out.” His younger competitors often work “basically as jobbers” in ad-hoc partnerships that change from project to project. As start-ups, he notes, “No one can afford to have full-time employees. I still have employees, and benefits.”
Start-ups that survive more than one business cycle will experience stresses that operate on a longer wavelength. After decades in the business, DeShazo says, “You understand the tempo of business, the tempo of failure. I’ve been through four recessions. I can start to smell ’em.” In recent years custom builders in prosperous markets near urban centers have faced increased competition from production-home builders. Indianapolis custom builder John Lerchen has watched production housing cut into what was once exclusively custom territory. “Production housing is moving further and further up,” he says. “People vote with their wallets, and quite frankly, people are voting for production housing. Is [custom building] going to become a smaller market? I don’t doubt that at all.”
Even for successful custom builders, the financial rewards may seem modest in light of the effort and risk involved. “It can be a good business, and you can make an honest living,” says Omaha custom builder and developer Pat McNeil, “but it won’t make you rich, because it’s not a manufacturing process like spec or semi-custom homes are.” For McNeil, land development—he buys land and offers design/build homes on his own lots—provides an essential boost to his profit margin. “I have some hobbies that I couldn’t afford if I only did custom homes. I fly planes; I drive big boats. My passion is custom homes, and I make money on the other things.”
Why would these four builders encourage a child to follow them down such a difficult path? McNeil uses the word “passion,” and he is not alone in professing an emotional attachment to building custom homes. “I don’t know of any other business that is as interesting,” DeShazo says. “You not only have to solve problems for people—which is what we do all the time—but you also have to understand their psychology.” DeShazo, who has two daughters, 14 and 17, recognizes that the field lacks appeal to young people with college prospects. “It doesn’t look flashy, it looks somewhat dirty, it looks confrontational.” But he also points out that the flashy, new-economy businesses that thrived in the 1990s lost much of their appeal—along with their market valuations—in the transition to the current economy. “There are a lot of businesses out there that are smoke and mirrors,” he says. Builders produce a tangible product, which DeShazo finds immensely satisfying. “The results part of it is huge. The teamwork aspect of it is huge, too.” Those rewards appeal even to young people with white-collar aspirations, as DeShazo learned by hiring Harvard grads who could not find work in their own fields. “If they venture into it, a lot of them are going to enjoy it.”
In the textbook version of the American Dream, blue-collar parents send their kids off to college and white-collar careers. Malcolm played that story backward, going from college to a carpentry job in Maine that paid $2.50 per hour—not exactly what the old man had in mind. “My father and I didn’t talk for two years after I moved up here,” says Malcolm, who long ago reconciled with his father but remains glad he stood his ground. “I like working with my hands,” he says. “I think there’s a lot of value to it.” Malcolm has two sons, ages 2 and 4, and says, “When it comes right down to it, if they ended up working with their hands for a living, I’d be pretty happy.” But running a custom home business offers much more than the simple satisfactions of craft. In addition to the challenges of building and running a company, “It’s such a great opportunity to meet people and be a part of their lives for a significant period of time. It’s incredible the people that we meet, and the older we get the more those people come back into our lives. That’s the fun stuff. You get to learn so much about people’s lives and where they come from.”
Lerchen considers custom building a sound career choice not just in spite of its difficulty, but also, in part, because of it. “Anything that’s difficult to do moves further and further away from becoming a commodity,” he says, “and the more opportunity there is.” In a commodity business, “You’re easily replaced, but any time you can be good in a difficult business you are going to be eminently employable.” And the skills and work habits required to succeed in this business are readily transferable to other fields. “How are your people skills? How are your project-management skills?” These are the stock-in-trade of Lerchen and his staff. And there’s more. “In custom building you’re in the prototype shop every day, you’re doing R&D every day. Most industries are moving toward project-centered models, so if you’re a good project manager you’re going to be eminently employable in a number of industries.”
The test these builders would administer before welcoming one of their own into the business has two questions: “Are you choosing this freely?” and “Are you willing to learn the business from the ground up?” Enthusiasm is the buffer that protects a builder from the inevitable bumps. And while business education and business experience can be enormously helpful, this is not a job that can be learned in the abstract. “There are too many mysteries,” DeShazo says, “too many blind corners.” For young people with the passion and the energy, custom building clearly can be a great way of life. Those with a parent who has already blazed a trail to follow are that much closer to enjoying it.
