One homebuilder's solution: Pay early, pay often
Amid the housing crisis, this North Carolina builder found a new way to win in real estate.
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| Rick Judson switched from tract houses to town homes, including the ones seen here in Charlotte. |
(Fortune Small Business) -- For builder Rick Judson, there is no place like a town home. That's because a gamble on multifamily complexes in his hometown of Charlotte is paying off.
As a principal partner in Evergreen Home Builders, Judson, 58, had noticed that demand was lagging for Evergreen's suburban single-family homes, even as prices were holding strong for condos a short commute from the business district. So he sold his interest in Evergreen in 2006 and focused his attention on converting rental apartment buildings into condos.
His first project was Williamsburg on Commonwealth, a 50-year-old complex of 198 two-bedroom, two-story town homes that he had been renting out within jogging distance of the Bank of America (BAC, Fortune 500) and Wachovia (WB, Fortune 500) headquarters.
Judson wanted to renovate the units quickly, lest the market cool, and halfway through, he had an idea: Pay suppliers and subcontractors every two weeks, rather than monthly, in exchange for priority attention (and modest discounts).
The innovation worked: He was able to gut and restore his next 34 units in the time it took to do the previous 20. Judson had purchased the property for $33,000 a unit in 2001, and he sold the last town homes in May for $150,000 each. (Condo prices in Charlotte held steady over the 12 months through May, even as unit sales fell 32%.)
Judson is now sprucing up a 48-unit complex and says his favored status among the best subcontractors will let him finish nine months ahead of the normal schedule. 
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