How to Use Fear to Your Advantage and Capture More Profitable Market Share Than Ever!
Dear Professional Builder,
The last six months have been brutal – and awesome at the same time.
For the last two years our industry has been riding a massive tidal wave, a literal Tsunami. It’s been fun to ride - but can be very dangerous.
The reality is, with a wave like we just went through, it hits the beach at some point, smashing and washing away all those who weren’t ready for the inevitable reckoning.
The biggest challenge is even those who thought they prepared may have been a bit too optimistic.
When capital is thrown at you in obscene amounts, it’s flowing so fast and freely that it's almost intoxicating. That's where we were six months ago, and most of the players were not even considering, let alone planning for, when the capital flow firehose would get shut off.
…enter the FED RECKONING!
Demand is intentionally being destroyed at a faster pace than any other time in modern history.
Worse yet, some builders have projects 3... 6... even 9 months in that are based on old unrealistic numbers, and if they’re lucky their lenders are only tightening up their standards.
Many builders are falling victim to lenders not funding on time, or funding at all. Others are facing draw delays, or lenders simply shutting down draws, with subs walking off job sites – never to return.
That Can Be a Fatal Blow
If you've got subs walking off job sites it’s the devastating consequence of the Tsunami washing its way back out to sea.
What's the upside? Where is the silver lining?
Unfortunately, for some there is no silver lining.
Some builders are being smashed against the rocks, forced to burn all their excess cash – or worse, filing bankruptcy.
However, for those who kept their powder dry and have weathered these kinds of storms in the past, it’s their time to shine and grab huge market share.
The cure for the Fed-Inflation-Affordability crisis is realistic expectations and multiple exit strategies.
Like we said at the Las Vegas BTR conference this week, we are more bullish on BTR today than we were in Nashville in early March.
Today the numbers are far more realistic and can be penciled for long-term sustainability. In March everyone seemed to be wearing nothing but rose-colored glasses.
Thankfully, today the rose-colored glasses have been traded in for a more accurate lens on the market.
It’s always best to deal with the truth – not hopeful assumptions (that are a two-edged sword ready to slice in the opposite direction...)
So, the cure comes in two forms.
Realistic expectations and multiple exit strategies.
With realistic expectations you can push back on bloated land prices and subs acting like they own you. Plus, suppliers are also upping their game, fearing market pullback. So, you’re seeing lower prices, better service, and an environment where, if you’re ready to capitalize, the wind is at your back!
The key to this part of the picture is trustworthy relationships.
Like we wrote about in our article last week, creating and maintaining high-quality relationships is the key to taking market share going forward.
You need true partners, not just people mouthing the words to grab a piece of your business.
You need partners who will stand by you through thick and thin – who perform.
You need to know when your partner says it, they’ll do it.
No more BS.
No more easy money.
It’s time for hard work, trusted partners, and cleaning up the beach.
This Fed-Inflation Tsunami has smashed up the beach, now let’s partner to clean up this beautiful beach and own it together.
David Huey, CEO
PS If you have any question about how we might be able to help you - please give us a call.
Our Relationships Speak
The reputation of our clients speaks volumes, with our top clients averaging 587 builds, and many over 2,500 builds to their credit. They can get funds anywhere. Yet, they choose us again and again because you can trust us.