This document provides an analysis of DR Horton's strong first quarter 2010 results compared to its competitors. The author argues that DR Horton's "spec building" strategy, where it builds homes before finding buyers, gives it advantages over competitors that focus on building to order. DR Horton is well positioned to benefit from changes in the homebuilding industry as the housing crisis has made bank financing unavailable for many smaller builders. The author believes DR Horton has been consistently undervalued by the market despite its superior operating performance and growth potential.
Please find attached our annual review with our compliments. This is a sample of the high quality content our subscribers receive each week. Take your free trial at bloombergbriefs.com
- Cascade Financial reported a net loss of $4.8 million for Q1 2009 compared to earnings of $2.6 million in Q1 2008, due to increasing its provision for loan losses to $13.9 million.
- Checking deposits grew 83% year-over-year to a record level, while total loans increased 8% to $1.25 billion despite a slowdown in new loan originations.
- Nonperforming loans rose to represent 4.05% of total loans as the weak housing market continued to present challenges, leading to a higher allowance for loan losses.
- The company remained well capitalized with strong capital ratios, while continuing to focus on residential and small business lending to
The document summarizes the bursting of the housing and credit bubbles in the United States. It describes how lending standards declined from 2001 to 2006, fueling a surge in subprime mortgage originations. This led to rapidly rising home prices that far exceeded historical trends. When home price appreciation slowed, mortgage defaults increased sharply. By 2008, home prices were falling significantly, foreclosures were at record highs, and existing home sales were declining as inventories surged - showing that the housing and credit crises were still in early stages and would continue to negatively impact the economy.
Middle market M&A volumes declined in Q1 2011 after deals were pulled forward in 2010 due to tax uncertainty. Despite lower volumes, multiples remained high at 7.5x. Middle market lending activity increased in Q1 2011 but was fueled by debt refinancings rather than new LBO deals. The US economic recovery remains uncertain as GDP growth slowed in Q1 2011. Liquidity in the middle market financing space has increased significantly from various sources including banks restarting leveraged lending teams, new business development companies, and existing players increasing balance sheets to be more active in lending. Competition for quality deals remains fierce, supporting high valuations above 8x EBITDA for attractive businesses.
Below is the latest resale market figures for August in Greater Toronto Area which inlcude both the 416 and 905 region. There has been a reduction in Sales for August from last year at this time however it should be noted that last year was the second highest year in the history of the Toronto Real Estate Board. Personally I continue to be quite bullish about the Toronto market as I am noticing more the ever, a more suburban City turning into a more urban City: Larger population and immigration, making homes more expensive and expanding upward.
- Detroit won a commitment from Barclays for $275 million in financing to fund its exit from bankruptcy, if a judge approves its debt-cutting plans.
- The money from Barclays would pay off previous borrowing, creditors, and help revitalize the city.
- Detroit filed for bankruptcy unable to provide services and meet financial obligations due to decades of economic and population decline. It has since cut deals to reduce its $18 billion in liabilities.
Please find attached our annual review with our compliments. This is a sample of the high quality content our subscribers receive each week. Take your free trial at bloombergbriefs.com
- Cascade Financial reported a net loss of $4.8 million for Q1 2009 compared to earnings of $2.6 million in Q1 2008, due to increasing its provision for loan losses to $13.9 million.
- Checking deposits grew 83% year-over-year to a record level, while total loans increased 8% to $1.25 billion despite a slowdown in new loan originations.
- Nonperforming loans rose to represent 4.05% of total loans as the weak housing market continued to present challenges, leading to a higher allowance for loan losses.
- The company remained well capitalized with strong capital ratios, while continuing to focus on residential and small business lending to
The document summarizes the bursting of the housing and credit bubbles in the United States. It describes how lending standards declined from 2001 to 2006, fueling a surge in subprime mortgage originations. This led to rapidly rising home prices that far exceeded historical trends. When home price appreciation slowed, mortgage defaults increased sharply. By 2008, home prices were falling significantly, foreclosures were at record highs, and existing home sales were declining as inventories surged - showing that the housing and credit crises were still in early stages and would continue to negatively impact the economy.
Middle market M&A volumes declined in Q1 2011 after deals were pulled forward in 2010 due to tax uncertainty. Despite lower volumes, multiples remained high at 7.5x. Middle market lending activity increased in Q1 2011 but was fueled by debt refinancings rather than new LBO deals. The US economic recovery remains uncertain as GDP growth slowed in Q1 2011. Liquidity in the middle market financing space has increased significantly from various sources including banks restarting leveraged lending teams, new business development companies, and existing players increasing balance sheets to be more active in lending. Competition for quality deals remains fierce, supporting high valuations above 8x EBITDA for attractive businesses.
Below is the latest resale market figures for August in Greater Toronto Area which inlcude both the 416 and 905 region. There has been a reduction in Sales for August from last year at this time however it should be noted that last year was the second highest year in the history of the Toronto Real Estate Board. Personally I continue to be quite bullish about the Toronto market as I am noticing more the ever, a more suburban City turning into a more urban City: Larger population and immigration, making homes more expensive and expanding upward.
- Detroit won a commitment from Barclays for $275 million in financing to fund its exit from bankruptcy, if a judge approves its debt-cutting plans.
- The money from Barclays would pay off previous borrowing, creditors, and help revitalize the city.
- Detroit filed for bankruptcy unable to provide services and meet financial obligations due to decades of economic and population decline. It has since cut deals to reduce its $18 billion in liabilities.
The document summarizes residential real estate sales data for the Greater Toronto Area in November 2011. Some key points:
- Total sales in November 2011 were 7,092, up 11% from November 2010. New listings increased 14% year-over-year.
- The average sale price in November was $480,421, an increase of 10% from November 2010.
- By home type, detached homes had the highest average price at $611,364, while condo apartments had the lowest at $338,251.
- Marshall & Ilsley Corporation reported a net loss of $0.50 per share for Q2 2009, compared to a net loss of $1.52 per share in Q2 2008.
- It aggressively addressed problem loans by writing down credits and strengthening its balance sheet, including a $468M loan loss provision and boosting its allowance to loans ratio to 2.83%.
- Financial results were impacted by a $49.2M FDIC insurance assessment, $82.7M in securities gains, an $18M tax benefit, and $25M in dividends paid to the U.S. Treasury.
Overview Of Housing/Credit Crisis And Why There Is More Pain To ComeAndrew Coleman
This document provides an overview of the housing/credit crisis and why more pain is to come. It discusses several key causes of the crisis, including a decline in lending standards that allowed many unqualified borrowers to obtain loans. This was driven by the assumption of perpetually rising home prices and the demand from Wall Street for loan products to securitize. The consequences section outlines the surge in delinquencies, falling home sales, rising foreclosures and inventories, and the number of homeowners who owe more than their homes are worth.
Please also find attached our Real Estate Supplement. In it you will read about how issuance of bonds backed by commercial properties is on track to beat last year's supply and yield premiums for bonds backed by commercial property loans have narrowed. Also, Jefferies CMBS veteran Lisa Pendergast says she expects CMBS spreads to narrow by year end, while Fannie Mae economists Douglas Duncan and Patrick Simmons argue that a slowdown in the growth of the labor force suggests more modest prospects for the demand for new housing and construction. Emile J. Brinkmann, the chief economist of the Mortgage Bankers Association of America, probes how state regulations will affect the pace of foreclosures and delinquencies. Nicolas Retsinas of Harvard’s Joint Center for Housing has some advice for lawmakers on GSE reform and Donald Trump offers a characteristically confident view that the recovery in real estate. If you have any comments or feedback for future real estate issues please contact arozens@bloomberg.net.
San Diego's office market is seeing increasing momentum in 2012, with rising job creation and declining unemployment boosting demand for office space. Net absorption in 2011 was 68,000 SF while leasing activity totaled 1.5 million SF, indicating renewals dominated over new tenants. Several large companies committed to new office blocks in early 2012. With job growth accelerating and rental rates remaining low, many firms are willing to commit to longer lease terms, though tenants still have an advantage in negotiations. However, landlords may start raising rents for Class A space.
The document provides an overview and outlook of the leveraged finance market in 2012 and 2013. It discusses record high issuance volumes of high-yield bonds and leveraged loans in 2012. For 2013, analysts forecast more moderate returns compared to 2012 and increased risks for lower-rated debt. While high-yield bond returns are expected to be limited, some investors believe leveraged loans may outperform if interest rates rise. CLO issuance is also expected to rise again in 2013 after a revival in 2012. Middle market lending is an area that may see increased activity. Overall, the market is viewed as more challenging in 2013 compared to recent years.
- Zions Bancorporation reported a net loss of $832.2 million or $7.29 per share for Q1 2009, driven largely by a $634 million non-cash goodwill impairment at Amegy Bank and $249 million in impairment and valuation losses on securities.
- Key factors contributing to the loss included building loan loss reserves by $146 million, a decline in net interest margin to 3.93%, and acquiring failed bank Alliance Bank's assets.
- However, the company extended $3.8 billion in new credit in Q1, loan charge-offs declined from Q4, and its capital ratios remained above regulatory requirements despite the reported loss.
California and Southwest Distressed Real Estate: How Much Debt is in Distress...Ryan Slack
While signs of hope could be seen in the broader economy, the commercial real estate market continues to struggle with rising default rates and falling property values. Many borrowers have started handing back property keys to lenders. The distressed loan market is becoming more active but has not yet reached the scale of the underlying problem. Banks remain hesitant to sell large portfolios, so the FDIC currently dominates the market and more bank failures are expected to add to the volume of distressed debt available.
Nick Vandelogt Financial Analysis Detroit Red Wings Final ProductNick Vandelogt
The document provides a financial analysis of the Detroit Red Wings hockey organization. It discusses that the Red Wings are owned by Illitch Holdings and incorporated, which provides benefits to owner Michael Illitch. It also gives a brief history of the Red Wings franchise and notes they are financially ranked 9th by Forbes among NHL teams. The document analyzes the Red Wings' budget, payroll, revenue strategies and provides recommendations to enhance revenues through increased social media presence and acquiring a regional sports network.
This document provides an economic and market overview of the industrial real estate sector in the Chicago, Illinois area in the fourth quarter of 2012. It finds that while national economic growth was lackluster, the Chicago industrial market saw improvements, with leasing activity reaching pre-recession levels of over 32 million square feet and vacancy dropping to 8.7%. The tightening market is expected to benefit owners and continue improving over the next few years.
Campus Crest Communities, Inc. Reports Third Quarter 2011 Results
- Grew Same-Store Net Operating Income by 6.8% -
- Increased Occupancy at Existing 21 Wholly-Owned Operating Properties by 270 Basis Points and Average Rental Rate by 2.8% -
CHARLOTTE, N.C., Nov 01, 2011 (BUSINESS WIRE) --
Campus Crest Communities, Inc. (NYSE:CCG) (the "Company"), a leading developer, builder, owner and manager of high-quality, purpose-built student housing, today announced results for the three months ended September 30, 2011.
JPMorgan Chase reported first quarter 2010 net income of $3.3 billion, up from $2.1 billion in the first quarter of 2009. The Investment Bank generated strong results driven by fixed income markets revenue. Retail Financial Services reported a net loss due to high credit costs, though Retail Banking saw higher profits. While credit costs remained elevated, the firm saw signs of stabilization and improvement in some consumer credit portfolios.
This document summarizes a real estate investment program in Palm Beach County, Florida. The program allows investors to purchase single-family homes in desirable neighborhoods that are then leased to qualified tenants. Investors benefit from rental income, tax advantages, and potential capital gains when properties are sold. A property management company handles all aspects of the investment, including identifying properties, financing, maintenance, and tenant screening. Strong demand for rental properties in the area has led to high occupancy rates and rental price increases in recent years, while home values have appreciated an average of 11% annually over the past five years.
Each month, This Month in Real Estate provides expert opinion and analysis on real estate trends across the nation. The aim of the consumer-oriented segments is to help agents combat the "doom and gloom" messages of the national print and television media with real information on real estate.
National Association of Realtors 2013 Member ProfileRicardo Cobos
The document is the 2013 Member Profile report from the National Association of REALTORS®. It provides the following key points:
1) The typical REALTOR® earned $43,500 in 2012, up from $34,900 in 2011. They had 12 transaction sides in 2012 compared to 10 in 2011.
2) Property managers managed a median of 49 properties in 2012, the highest number on record, reflecting the strong rental market.
3) Eight in ten REALTORS® are certain they will remain in the business for two more years, a rise from 76% in the previous year's report.
JPMorgan Chase reported first quarter 2009 net income of $2.1 billion, down from $2.4 billion in the first quarter of 2008. Revenue was a record $26.9 billion driven by strong performance in the Investment Bank. The Investment Bank generated record revenue and net income due to #1 rankings in debt and equity underwriting. Retail Financial Services income was $474 million, improved from a loss the prior year, due to the Washington Mutual acquisition partially offset by higher credit costs. Credit costs increased across portfolios as housing prices declined and delinquencies rose. The company remains well capitalized with a Tier 1 capital ratio of 11.3% and loan loss reserves of $28 billion to withstand
Making Demand Generation work in the Construction industryLedger Bennett DGA
In the UK today, around 93% of builders are recognised as heavy Internet users, and 70% of them buy products online. Likewise, construction industry customers are increasingly engaging in social media as a source of information, and more importantly, recommendation.
Without strong relationships with your merchant base, it's unlikely that you're getting your marketing messages through to the people paying money for products. This is particularly problematic within the construction industry, as the products tradesmen use are a direct reflection of their workmanship, which they value above most other things. When customer satisfaction is fundamental to word-of-mouth recommendation, they need to know and trust the products and brands they’re using. You can make this happen.
'Making Demand Generation work in the Construction industry' is a helpful guide that looks to connect brand owners, merchants and their customers using realistic Demand Generation strategies that professionals can leverage to their advantage.
This document provides a summary of the second annual TecHome Builder Summit, which saw a 50% increase in builder attendance. Key topics discussed at the summit included marketing to millennials, the growing smart home market, tips from builders on implementing technology, and the importance of structured wiring for do-it-yourself technology installation. The summit highlighted the need for builders to offer technology packages and focus on lifestyle to appeal to younger homebuyers and adapt to changes in the housing market.
The Pivotal CRM team offers business-integration solutions and implementation services, reducing the cost and complexity traditionally associated with integration to Oracle JD Edwards EnterpriseOne HMS.
This corporate profile document provides an overview of Toll Brothers, the largest luxury home builder in the United States. Some key points:
- Toll Brothers focuses on the luxury home market, with an average delivered home price of $725,000 in FY2014, more than double the average of other large public home builders.
- It has a nationwide footprint across 19 states and approximately 50 markets, and is expanding its urban presence in cities like New York, Washington D.C. and Philadelphia.
- The document reviews Toll Brothers' financial results, current housing market conditions, product diversification including single family, multi-family, age-qualified and city living homes, and its portfolio of current and future city living
The document summarizes residential real estate sales data for the Greater Toronto Area in November 2011. Some key points:
- Total sales in November 2011 were 7,092, up 11% from November 2010. New listings increased 14% year-over-year.
- The average sale price in November was $480,421, an increase of 10% from November 2010.
- By home type, detached homes had the highest average price at $611,364, while condo apartments had the lowest at $338,251.
- Marshall & Ilsley Corporation reported a net loss of $0.50 per share for Q2 2009, compared to a net loss of $1.52 per share in Q2 2008.
- It aggressively addressed problem loans by writing down credits and strengthening its balance sheet, including a $468M loan loss provision and boosting its allowance to loans ratio to 2.83%.
- Financial results were impacted by a $49.2M FDIC insurance assessment, $82.7M in securities gains, an $18M tax benefit, and $25M in dividends paid to the U.S. Treasury.
Overview Of Housing/Credit Crisis And Why There Is More Pain To ComeAndrew Coleman
This document provides an overview of the housing/credit crisis and why more pain is to come. It discusses several key causes of the crisis, including a decline in lending standards that allowed many unqualified borrowers to obtain loans. This was driven by the assumption of perpetually rising home prices and the demand from Wall Street for loan products to securitize. The consequences section outlines the surge in delinquencies, falling home sales, rising foreclosures and inventories, and the number of homeowners who owe more than their homes are worth.
Please also find attached our Real Estate Supplement. In it you will read about how issuance of bonds backed by commercial properties is on track to beat last year's supply and yield premiums for bonds backed by commercial property loans have narrowed. Also, Jefferies CMBS veteran Lisa Pendergast says she expects CMBS spreads to narrow by year end, while Fannie Mae economists Douglas Duncan and Patrick Simmons argue that a slowdown in the growth of the labor force suggests more modest prospects for the demand for new housing and construction. Emile J. Brinkmann, the chief economist of the Mortgage Bankers Association of America, probes how state regulations will affect the pace of foreclosures and delinquencies. Nicolas Retsinas of Harvard’s Joint Center for Housing has some advice for lawmakers on GSE reform and Donald Trump offers a characteristically confident view that the recovery in real estate. If you have any comments or feedback for future real estate issues please contact arozens@bloomberg.net.
San Diego's office market is seeing increasing momentum in 2012, with rising job creation and declining unemployment boosting demand for office space. Net absorption in 2011 was 68,000 SF while leasing activity totaled 1.5 million SF, indicating renewals dominated over new tenants. Several large companies committed to new office blocks in early 2012. With job growth accelerating and rental rates remaining low, many firms are willing to commit to longer lease terms, though tenants still have an advantage in negotiations. However, landlords may start raising rents for Class A space.
The document provides an overview and outlook of the leveraged finance market in 2012 and 2013. It discusses record high issuance volumes of high-yield bonds and leveraged loans in 2012. For 2013, analysts forecast more moderate returns compared to 2012 and increased risks for lower-rated debt. While high-yield bond returns are expected to be limited, some investors believe leveraged loans may outperform if interest rates rise. CLO issuance is also expected to rise again in 2013 after a revival in 2012. Middle market lending is an area that may see increased activity. Overall, the market is viewed as more challenging in 2013 compared to recent years.
- Zions Bancorporation reported a net loss of $832.2 million or $7.29 per share for Q1 2009, driven largely by a $634 million non-cash goodwill impairment at Amegy Bank and $249 million in impairment and valuation losses on securities.
- Key factors contributing to the loss included building loan loss reserves by $146 million, a decline in net interest margin to 3.93%, and acquiring failed bank Alliance Bank's assets.
- However, the company extended $3.8 billion in new credit in Q1, loan charge-offs declined from Q4, and its capital ratios remained above regulatory requirements despite the reported loss.
California and Southwest Distressed Real Estate: How Much Debt is in Distress...Ryan Slack
While signs of hope could be seen in the broader economy, the commercial real estate market continues to struggle with rising default rates and falling property values. Many borrowers have started handing back property keys to lenders. The distressed loan market is becoming more active but has not yet reached the scale of the underlying problem. Banks remain hesitant to sell large portfolios, so the FDIC currently dominates the market and more bank failures are expected to add to the volume of distressed debt available.
Nick Vandelogt Financial Analysis Detroit Red Wings Final ProductNick Vandelogt
The document provides a financial analysis of the Detroit Red Wings hockey organization. It discusses that the Red Wings are owned by Illitch Holdings and incorporated, which provides benefits to owner Michael Illitch. It also gives a brief history of the Red Wings franchise and notes they are financially ranked 9th by Forbes among NHL teams. The document analyzes the Red Wings' budget, payroll, revenue strategies and provides recommendations to enhance revenues through increased social media presence and acquiring a regional sports network.
This document provides an economic and market overview of the industrial real estate sector in the Chicago, Illinois area in the fourth quarter of 2012. It finds that while national economic growth was lackluster, the Chicago industrial market saw improvements, with leasing activity reaching pre-recession levels of over 32 million square feet and vacancy dropping to 8.7%. The tightening market is expected to benefit owners and continue improving over the next few years.
Campus Crest Communities, Inc. Reports Third Quarter 2011 Results
- Grew Same-Store Net Operating Income by 6.8% -
- Increased Occupancy at Existing 21 Wholly-Owned Operating Properties by 270 Basis Points and Average Rental Rate by 2.8% -
CHARLOTTE, N.C., Nov 01, 2011 (BUSINESS WIRE) --
Campus Crest Communities, Inc. (NYSE:CCG) (the "Company"), a leading developer, builder, owner and manager of high-quality, purpose-built student housing, today announced results for the three months ended September 30, 2011.
JPMorgan Chase reported first quarter 2010 net income of $3.3 billion, up from $2.1 billion in the first quarter of 2009. The Investment Bank generated strong results driven by fixed income markets revenue. Retail Financial Services reported a net loss due to high credit costs, though Retail Banking saw higher profits. While credit costs remained elevated, the firm saw signs of stabilization and improvement in some consumer credit portfolios.
This document summarizes a real estate investment program in Palm Beach County, Florida. The program allows investors to purchase single-family homes in desirable neighborhoods that are then leased to qualified tenants. Investors benefit from rental income, tax advantages, and potential capital gains when properties are sold. A property management company handles all aspects of the investment, including identifying properties, financing, maintenance, and tenant screening. Strong demand for rental properties in the area has led to high occupancy rates and rental price increases in recent years, while home values have appreciated an average of 11% annually over the past five years.
Each month, This Month in Real Estate provides expert opinion and analysis on real estate trends across the nation. The aim of the consumer-oriented segments is to help agents combat the "doom and gloom" messages of the national print and television media with real information on real estate.
National Association of Realtors 2013 Member ProfileRicardo Cobos
The document is the 2013 Member Profile report from the National Association of REALTORS®. It provides the following key points:
1) The typical REALTOR® earned $43,500 in 2012, up from $34,900 in 2011. They had 12 transaction sides in 2012 compared to 10 in 2011.
2) Property managers managed a median of 49 properties in 2012, the highest number on record, reflecting the strong rental market.
3) Eight in ten REALTORS® are certain they will remain in the business for two more years, a rise from 76% in the previous year's report.
JPMorgan Chase reported first quarter 2009 net income of $2.1 billion, down from $2.4 billion in the first quarter of 2008. Revenue was a record $26.9 billion driven by strong performance in the Investment Bank. The Investment Bank generated record revenue and net income due to #1 rankings in debt and equity underwriting. Retail Financial Services income was $474 million, improved from a loss the prior year, due to the Washington Mutual acquisition partially offset by higher credit costs. Credit costs increased across portfolios as housing prices declined and delinquencies rose. The company remains well capitalized with a Tier 1 capital ratio of 11.3% and loan loss reserves of $28 billion to withstand
Making Demand Generation work in the Construction industryLedger Bennett DGA
In the UK today, around 93% of builders are recognised as heavy Internet users, and 70% of them buy products online. Likewise, construction industry customers are increasingly engaging in social media as a source of information, and more importantly, recommendation.
Without strong relationships with your merchant base, it's unlikely that you're getting your marketing messages through to the people paying money for products. This is particularly problematic within the construction industry, as the products tradesmen use are a direct reflection of their workmanship, which they value above most other things. When customer satisfaction is fundamental to word-of-mouth recommendation, they need to know and trust the products and brands they’re using. You can make this happen.
'Making Demand Generation work in the Construction industry' is a helpful guide that looks to connect brand owners, merchants and their customers using realistic Demand Generation strategies that professionals can leverage to their advantage.
This document provides a summary of the second annual TecHome Builder Summit, which saw a 50% increase in builder attendance. Key topics discussed at the summit included marketing to millennials, the growing smart home market, tips from builders on implementing technology, and the importance of structured wiring for do-it-yourself technology installation. The summit highlighted the need for builders to offer technology packages and focus on lifestyle to appeal to younger homebuyers and adapt to changes in the housing market.
The Pivotal CRM team offers business-integration solutions and implementation services, reducing the cost and complexity traditionally associated with integration to Oracle JD Edwards EnterpriseOne HMS.
This corporate profile document provides an overview of Toll Brothers, the largest luxury home builder in the United States. Some key points:
- Toll Brothers focuses on the luxury home market, with an average delivered home price of $725,000 in FY2014, more than double the average of other large public home builders.
- It has a nationwide footprint across 19 states and approximately 50 markets, and is expanding its urban presence in cities like New York, Washington D.C. and Philadelphia.
- The document reviews Toll Brothers' financial results, current housing market conditions, product diversification including single family, multi-family, age-qualified and city living homes, and its portfolio of current and future city living
Real Estate Leads and Lead Generation (Can You Handle the Real Truth?)Proquest Technologies
Here’s a candid, no BS presentation, a 3-minute burst of insight, about real estate leads and lead generation in today's market. In it you’ll learn why some agents are succeeding wildly, doing far LESS lead generation.
Plus you’ll also discover how the real estate buyers and sellers your market have literally flipped the real estate lead generation game on its head virtually overnight! Things that works just weeks ago do NOT work today…find out why!
This marketing plan summary provides an overview of XYZ Home's strategy to enter the smart home market. XYZ Home aims to leverage its acquisition of ABC and the strengths of both companies to become a leader in the smart home industry. The plan identifies the smart home market as an emerging opportunity, especially in Turkey and other target markets. It analyzes market trends, customer needs, competitors and XYZ Home's capabilities. The marketing strategy focuses on creating brand awareness and a customer-centric approach to position XYZ Home as the top smart home solutions provider. Financial projections and implementation controls are also outlined to achieve objectives over the next 3-5 years.
- Lead generation is the process of generating interest or inquiries into a business's products or services. Effective lead generation methods include advertisements, exhibitions, mailers, and follow ups.
- Roles and responsibilities must be clearly defined for all project team members, including sales, project management, operations, design, and more. Regular communication and updates are important early on.
- Proper lead closure techniques include understanding buyer signals, addressing objections, and recognizing the right time for customers to complete a transaction. Timing is critical for closing leads in real estate projects.
Lennar corporation case study. plus video (2)Hasiyah Dorosae
The document outlines a presentation on homebuilder Lennar Corporation. It provides an overview of Lennar's history and expansion, compares its financial performance to industry peers from 2006-2008, discusses its use of joint ventures, and analyzes the impact of fraud allegations on the company. Specifically, it found that Lennar improperly accounted for earnings and cash flows from its unconsolidated joint venture entities, overstating its liquidity and profitability ratios.
This document provides a marketing plan for Nest Protect, an intelligent smoke and carbon monoxide (CO2) alarm created by Nest Labs. It begins with an executive summary of Nest Labs and Nest Protect. The document then analyzes the smoke alarm industry, competitors, customers, and outlines a marketing strategy to launch Nest Protect and achieve 5% market share in the first year by targeting upper class homeowners interested in design and technology. The plan emphasizes Nest Protect's unique technological features and sleek design over safety.
This document provides guidance to sales representatives on strategically guiding customers through the buying journey. It outlines 9 key stages: 1) building need, 2) discovery, 3) consideration, 4) decision, 5) purchase, 6) delivery, 7) usage, 8) retention, and 9) advocacy. For each stage, it provides example messaging, qualifying criteria, success metrics, sales tools, and instructions for updating the CRM with stage-specific details to help reps effectively engage customers and maximize deal conversion and renewal rates. The goal is to align marketing and sales processes to optimize the customer experience at each step of the buying cycle.
DIGITAL MARKETING STRATEGY FOR REAL ESTATE !!!
When clients need a branding, a website or a Digital Marketing Strategy, it requires a clear design process. A client who understands the basics of this process will appreciate what happens at each step.
DIGITAL MARKETING STRATEGY FOR REAL ESTATE !!!
When clients need a branding, a website or a Digital Marketing Strategy, it requires a clear design process. A client who understands the basics of this process will appreciate what happens at each step.
DIGITAL MARKETING STRATEGY FOR REAL ESTATE !!!
When clients need a branding, a website or a Digital Marketing Strategy, it requires a clear design process. A client who understands the basics of this process will appreciate what happens at each step.
01.Create Landing Page or Webpage
Relevant Infographic or Media
Mobile Friendly or Responsive Interface
CTA Button (Call to Action)
Lead Generation Form
2.Increase Organic Visibility (SEO) Or Search Engine Optimization
Search Engine Optimization Process...
Search Relevant Keywords
Keyword research is one of the most important, valuable, and high return activities in the search marketing field.
Optimize Webpage (Onpage SEO)
Onpage SEO is a backbone of SEO. Onpage Seo refers to all those activity which are done within the boundaries of your website.
Create Backlinks (Offpage SEO)
Backlinks are one of the most important aspects of SEO.The right links can drive traffic to your site which can convert into leads.
H-CARDS (Google Maps )
3. Increase Inorganic Visibility (SEM)
Create Campaign with Your Goals , Audience & Info-graphic
Use SERP & Display Network Platform For Campaign
Use Pay Per Click Technique
Generate Leads / Sales
4. Increase Social Visibility (SMM)
Create Campaign with Your Goals , Audience & Info-graphic
Use Page Like , Post Boost , Website Click Advertising For Campaign
Use Pay Per Lead Technique
Generate Leads / Sales
5. Manage Lead with Email Marketing & Automation
Email marketing is economical and highly effective.
Create Campaign
Push Mail to Leads
Use Automation
Digital Optimization Network
15 , D Block , Malviya Nagar Delhi –India
Email: satish@digon.in Web: www.digon.in
Contact : +91-78796-79328
Created by : Satish Vishwakarma
Follow @satishdigon
Know more about Changing landscape of Real Estate Industry with Digital Marketing and Technology from Vikram Kotnis's presentation from Amura Marketing Technologies at the Evolve- biggest Real Estate Marketing Conference by Amura @ JW Marriott, Pune.
Digital Marketing Plan for Real Estate BusinessGaurav Tripathi
Its a complete step by step digital marketing plan and strategy for real estate business. Follow these actionable steps to increase your business online reputation, sales, leads and ranking. Wanna know how you can increase leads for your real estate business? Check this detailed Digital Marketing Plan
Sales lead generation has never been more important to marketers targeting construction decision makers, whether construction firms or building product manufacturers. This fact is reinforced by a recent Construction Marketing Association survey—2015 Construction Marketing Outlook—which ranked Lead Generation as one of the top priorities for next year.
So to understand where construction marketers are with lead generation—a baseline—we conducted another survey and share the results here, along with some checklists of key lead generation types, and an evaluation of the two largest lead services in the construction market—McGraw-Hill Dodge Reports and Construction Market Data. Finally, we identified several other construction lead sources that tend to specialize in regions, type of construction project or service offerings.
A recent (2015) survey about lead generation in construction conducted by the Construction Marketing Association via SurveyMonkey posed the following questions:
1. What lead generation techniques or sources do you use in marketing to the construction industry?
2. Which lead generation technique/source has shown the best results for your company?
3. Which lead generation technique/source has shown the worst results for your company?
4. Which lead generation technique/source do you foresee using more in the future?
5. What type of company are you?
Real estate marketing is going digital in India as internet and technology influence more buying decisions. Traditional marketing methods like print ads, site visits, discussions and signboards are being supplemented by digital options like online searches, digital ads, virtual tours on websites and apps, and reviews. Developers are using social media creatively to promote their brands and properties visually to the growing number of Indian internet and mobile users. As digital marketing proves effective for other industries, real estate firms are also utilizing platforms like social media, mobile apps, and virtual tours to spread awareness and create their brands online.
BoyarMiller Breakfast Forum: The Current State of the Capital Markets 2009BoyarMiller
This document summarizes a presentation on the current state of real estate finance markets. It notes that a massive amount of commercial mortgage debt will mature between 2009-2013 that cannot be refinanced given current market conditions, creating an unprecedented refinancing shortfall of at least $1.2 trillion. This will force significant deleveraging of U.S. real estate assets as properties struggle to refinance with lower loan-to-value ratios. Loan modifications and restructuring will likely need to be pursued more frequently to manage losses as foreclosures and defaults rise sharply during this period of debt maturities and constrained capital availability.
“Ironically, if central bank ‘financial repression’ continues to work and increases
economic growth, we will likely see markedly higher bond yields by year-end
following intervention by the Fed to rein in stimulus as unemployment falls.“
Bob Grant provides a summary of comments made by Jeffrey DeBoer to Congress about the struggling state of the commercial real estate industry. Key points include: refinancing capacity presents an ongoing risk to property values as $300-500B in commercial real estate loans will mature annually through 2020; capitalization rates have increased 250 basis points while rents have declined 20% depending on property type; the lack of transactions makes it hard to accurately value properties; and regulatory flexibility is needed to restructure loans and allow banks to extend performing loans based on cash flow to avoid foreclosures. Michigan in particular continues to struggle more than other states with industrial vacancies over 13% and expected retail vacancy increases of 2% and rent declines of 4%
The document discusses six key trends that are likely to shape commercial real estate debt markets in 2010 according to CBRE Economic Advisors. These trends include:
1) More distress as distressed assets slowly migrate to the market, though banks will be reluctant to take losses on performing assets.
2) Continued extensions for maturing loan portfolios as the primary avenue for resolution in the short term.
3) Opportunistic investors remaining frustrated by the relatively slow pace of distressed asset transactions.
4) Wide spreads remaining between capitalization rates for core medical office buildings and class B facilities.
5) Capitalization rates continuing to climb for most property types as the year dragged on, with apartment caps
This document provides a summary of topics covered in Voltaire Financial's inaugural half-yearly bulletin, including:
- An overview of the changing residential development finance market, noting a shift away from large banks toward newer lenders like debt funds and peer-to-peer lenders.
- A guest article on rights of light and legal issues that can arise from infringing on these rights during redevelopment projects.
- Brief updates on taxation of annual tax on enveloped dwellings and trends in bridging loans.
- Case studies of recent projects completed by Voltaire Financial.
The document discusses trends in residential development lending, including less interest in super-prime projects, openness
The less transparent, often misunderstood high yield municipal bond sector offers not only unusually high tax exempt income, but a mostly unrecognized source of long run diversification with the taxable high grade (re what the Fed says and does) bond market.
- Marshall & Ilsley Bank (M&I) is a dominant banking franchise in the upper Midwest with a stable deposit base and profitable wealth management division. However, its stock is undervalued due to the financial crisis.
- Due diligence found M&I's loan portfolio has low credit risk due to its geographic focus. Non-performing loans are decreasing through portfolio refocusing away from construction.
- A private placement of $2.2 billion is proposed to repay TARP funds and strengthen capital, valuing M&I higher than its peers on a price-to-book basis. This deal structure allows M&I to meet new capital regulations.
How Resilient are MBS to CDO Market Disruptionsfinancedude
The document discusses the link between collateralized debt obligations (CDOs) and the primary mortgage-backed securities (MBS) market. It explains that CDOs were large purchasers of junior MBS tranches, providing funding that supported over $1 trillion in MBS issuance. If CDOs withdraw from this market, it could severely restrict funding for new home loans. The document recommends tighter regulation and disclosure to address risks and protect certain investors from high-risk mortgage products and securities.
If you are a commercial realtor and you have clients that have been turned down by a bank you should check out this presentation. If you are interested in having your deal funded by private money please contact Megan Krache at mkrache@sensiblelendingsolutions.com. We are actively lending to people the banks have turned down and are able to lend to people/businesses that have losses on their tax returns.
Ft partners research the rise of challenger banksChris Skinner
Challenger banks are gaining traction as alternatives to traditional banks. Traditional banks face issues like high fees, outdated technology, and lack of trust following the financial crisis. Challenger banks offer better rates, fewer fees, and more user-friendly mobile apps. While challenger banks are still small, increased funding and consumer dissatisfaction with traditional banks has created opportunities for their growth. Traditional banks are also launching their own fintech brands in response to the threat from challenger banks.
- The document discusses several topics related to investments and the London property market from the Summer 2016 issue of a magazine called Avantis Wealth.
- The first article analyzes whether the London property market is set to crash, noting that prices in London have skyrocketed since 2008 while remaining below peak levels in other parts of the UK. It argues oversupply of high-end properties in London combined with policies discouraging foreign buyers means a correction may be coming.
- The second piece discusses investment opportunities that are not correlated to the London property market, such as investments in care homes, German residential developments, and international resort properties, that typically offer fixed annual returns between 6-12%.
- The third section
Michael Durante Western Reserve Blackwall Partners 2011 outlook primer- finalMichael Durante
- Blackwall Partners believes the financial crisis has ended and a new "golden age" for financial stocks is beginning, similar to the period following the 1990s savings and loan crisis.
- Excessive capital reserves built up during the crisis due to mark-to-market accounting will be redeployed, leading to aggressive capital management and benefiting investors.
- Financial stocks currently trade at very low valuations and earnings growth is expected to be much higher than other sectors over the next few years, yet they remain underowned.
Nathan Burrell explains how the COVID-19 pandemic has drastically changed the mortgage industry in less than 3 weeks. Low interest rates led to a refinancing frenzy that overwhelmed lenders. As mortgage applications skyrocketed, lenders tightened guidelines and pulled back on lending due to concerns over being able to sell loans on the secondary market. The value of mortgage-backed securities and mortgage servicing rights plummeted, and unemployment surged to over 3.5 million filings. This "perfect storm" has volatility mortgage rates and tighter lending standards going forward until the pandemic is controlled.
Bank of America Corporation acquires Merrill Lynch & Co., Inc. PresentationQuarterlyEarningsReports3
This document summarizes the proposed merger between Bank of America and Merrill Lynch to create the premier financial services company. Some key points:
- Ken Lewis of Bank of America and John Thain of Merrill Lynch will lead the combined company.
- The merger combines Bank of America's retail banking franchise with Merrill Lynch's leading wealth management and investment banking businesses.
- The deal will diversify revenue streams and significantly enhance Bank of America's investment banking capabilities.
- Merrill Lynch brings over 20,000 financial advisors and $2.5 trillion in client assets to strengthen Bank of America's wealth management business.
The financial crisis was tough on asset-backed lending funds, and a spate of redemptions saw the space shrink considerably. But the launch this year of a new $1bn fund from FrontPoint Partners suggests that direct lending and ABL is making a comeback, and, due to the restrictions of Dodd-Frank, the space offers a wealth of opportunity for smaller niche players.
Government intervention hurts investors. As the government focuses on slowing credit growth, it is making it tougher for certain types of investors and borrowers to qualify for financing. Changes to insured mortgage rules have lowered amortization periods, reduced refinancing limits, and tightened debt servicing ratios. Regulators have also imposed new rules that reduce HELOC amounts and require reasonable income verification for stated income borrowers. These changes are restricting the money supply and access to credit for rental portfolios, self-employed individuals, and higher-ratio mortgages.
The document discusses how to navigate banking relationships during troubled economic times. It provides an overview of the shifts in the banking industry due to the financial crisis, including increased consolidation and losses from mortgage-backed securities and credit default swaps. It then offers advice on evaluating your bank's health, communicating proactively with your banker, understanding your loan terms and knowing when to seek other options.
August 2009 The Credit Crunch Is Dead, Long Live The Credit Crunchgatelyw396
The credit crunch is not over despite government efforts - banks are still restricting credit for small businesses and individuals through actions like lowering credit limits, raising interest rates, and tightening loan standards. While large banks have rebounded thanks to government bailout money, they are not passing this relief to smaller customers, continuing to strangle the economy. The systemic issues that led to the crisis also remain unaddressed. Business owners are struggling with less access to credit and personal guarantees now required for business loans, leaving them wary of investing or hiring during this uncertain time.
August 2009 The Credit Crunch Is Dead, Long Live The Credit Crunch
DR Horton By Jason Norbeck
1. DR HORTON – PARTNER LETTER EXCERPT
Jason C. Norbeck, CFA
Managing Partner
JCN Investments, LLC
JULY 2010 - DR HORTON is the most dominant homebuilder in the United States, the 700lb gorilla of the industry and the company’s 1st quarter
results highlight this fact. DR Horton’s 1st quarter results were materially better than that of its competitors and while DR Horton’s results have no
doubt been aided by increased demand related to the tax credit, this is a factor that favorably impacted the entire industry and cannot be used to explain
DR Horton’s strong relative performance. Sales orders (new contracts) increased by a staggering 56% (the second consecutive quarter that DR Horton
has achieved sales order growth greater than 50%) and DR Horton was one of only two public builders to report an increase in revenue (16% increase)
in the quarter. DR Horton was also one of only two public homebuilding companies to report a profit for the seasonally slow first quarter and the
company produced the highest level of sales per employee in its industry. It is becoming increasingly more apparent that DR Horton has been and will
be able to capitalize on the distressed conditions in its industry at a faster pace and to a greater extent than I had previously anticipated. This is in large
part due to the company’s unique business model. DR Horton’s results indicate that the company can grow regardless of the challenging conditions in
the housing market.
1Q 2010 Year over Year % Change 1Q 2010 Sales per Employee
Sales Revenue
DR Horton 56.0% 16.1% DR Horton $ 488,000
MDC Holdings 34.9% -16.4% Meritage $ 382,857
Lennar 20.1% -4.9% Ryland $ 270,854
Meritage 15.5% -13.0% KB Home $ 263,571
KB Home -4.4% -14.1% MDC Holdings $ 236,639
Pulte/Centex -12.2% -26.7% Hovnanian $ 211,429
Ryland -12.7% -5.7% Pulte/Centex $ 191,404
Hovnanian -19.6% -19.9% Lennar $ 163,755
Before I compare DR Horton’s operations to that of its public competitors, it is important to note that public homebuilders as a group are positioned to
benefit tremendously from the collapse of the housing market. During the boom, the majority of new homes in this country were built by small private
builders, mostly financed by loans (collateralized by land) from commercial banks. The collapse of the housing market has permanently altered the
landscape of residential construction finance in a way that greatly favors public builders. In order to appreciate the opportunity that lies ahead for the
large public homebuilding companies (who are not reliant upon collateralized loans from commercial banks) it helps to understand how commercial
banks operate and how they are regulated.
The banking industry operates like a herd of elephants, chasing loan categories as a group while at the same time never forgetting their past
transgressions (an elephant never forgets). Banking history is marked by severe disruptions or crises often highlighted by losses related to a single loan
category. For example, in the early to mid 80s banks became overexposed to “LDC” loans (Lesser Developed Countries) now known as Emerging
Market Debt. The US Treasury eventually guaranteed a significant amount of LDC loans (via Brady Bonds) to prevent a large number of major banks in
the US from being declared insolvent. In the late 80s, “HLT” loans (Highly Leveraged Transactions) also known as Junk Bonds and now referred to as
LBO loans (Leveraged Buy-Out) rocked the banking industry. In the early 1990s commercial banks experienced significant losses related to a downturn
in the commercial real estate market.
Banking regulation and as a result bank lending tends to be backward looking and each crisis is followed by a “Well, we can’t do that again” mentality
that restricts a bank’s ability and willingness to lend to that specific loan category (regulators never forget). As a result, the composition of a commercial
banks’ loan portfolio has evolved to exclude Emerging Market Debt and LBO Debt and there are numerous enhanced regulatory restrictions related to
commercial real estate lending. The crisis impacting Greece and potentially other nations is of little consequence to the US banking industry because
even the most “international” US banks have virtually eliminated their exposure to foreign government loans as a result of the prior LDC crisis. Also,
the lending restrictions brought about by the previous crisis related to commercial real estate lending is a major reason why the current weakness in the
commercial real estate market, while equally severe to that of the early 90s (if not worse) has not led to the significant losses for the banking industry
that many had anticipated.
This recent crisis has been the most severe, has had many causes and has affected a wide range of financial institutions. However if one were to solely
focus on the loan portfolios of the Commercial Banks (separate out those banks with Investment Banking divisions and the Mortgage Companies/Thrifts)
2. the crisis is clearly centered in residential construction lending. Beyond the obvious distress in the housing market, the nature of a distressed residential
construction loan is such that the degree to which a bank is required to charge off the loan has been well beyond what anyone imagined possible before
the downturn (if you question this statement I suggest you give Zions’ Chief Credit Officer a call). When a loan is showing signs of distress and is
backed by collateral, the bank is generally required to obtain a third party appraisal of that collateral and charge the loan down to its appraised value (or
even slightly below). The lack of documentable cash flow has caused a decline in the appraised value of residential construction projects that is
destructively severe. So much so that it is impossible to imagine a future banking regulatory environment that does not involve greater restrictions on
residential construction lending for commercial banks. The severity of loss in this category has been so high and the size of the average residential
construction loan is of sufficient size (usually many millions of dollars) that even for loans that are economically attractive and even without regulatory
restrictions a bank simply cannot afford to risk the size of the potential charge to capital if the performance of that project does not live up to
expectations. As a result, residential construction finance has been altered for a majority of the industry’s participants because banks will be materially
less willing to accept the assets of a residential construction project as collateral for a loan. Just yesterday, a Citigroup analyst released a survey of private
homebuilding companies that included the following quote: "the vast majority of survey participants reported that acquiring AC&D (Acquisition
Construction and Development) financing from banks remains difficult if not impossible to source." Lending conditions for private builders are not
likely to improve any time soon.
Even the most pessimistic housing bears acknowledge that population and demographic trends dictate that our country will need to build homes at a rate
that is ultimately 2 to 3 times greater than the current pace. However, the eventual material increase in demand for new homes will not be accompanied
by a similar material increase in the availability of financing for new home construction (at least from the banking industry). As a result the large public
builders that finance residential construction via substantial equity and debt that is based on their credit rating as an operating company (not
collateralized by land) are in a position to reap a lion’s share of the rewards related to a housing recovery.
Not only is DR Horton one of a small group of public builders that have widened their competitive advantage in relation to smaller private builders, DR
Horton has also widened its advantage over its public competitors. DR Horton’s point of differentiation comes from the fact that it starts the vertical
construction of a home before it has a buyer. The industry refers to this strategy as “spec” (speculative) building. Most homebuilders either do not
engage in the building of “spec” homes or do so in a much more limited degree. The majority of homebuilding companies operate a “Built to Order”
strategy in which vertical construction is delayed until the home has been sold.
As one might infer by its name, DR Horton’s “spec” strategy is often categorized as the riskier of the two strategies (even chaotic) by analysts and the
industry. This is incorrect, as the assets of a homebuilder tied to vertical construction are its most attractive because a completed home is liquid and can
be converted to cash within just a few months (even in a weak real estate market) and because the payback period for the investment is short and the
return on capital is high. In contrast, assets related to Land Development (which is a homebuilder’s alternative capital requirement) are illiquid
(especially in a down market) and the payback period usually extends out over many years. The incremental investment required for a builder to
commence vertical construction in anticipation of future sales is not only minor in relation to the capital a builder commits to the land and land
development of a project but it also enhances the liquidity of the asset and shortens the length of its payback period. As a result, the bulk of DR Horton’s
public competitors operate in a manner that is penny wise but pound foolish as the relative pennies saved by delaying vertical construction are small
compared to the gains in sales volumes and the better operating efficiencies that DR Horton achieves via the “controlled chaos” of its spec strategy.
Remember neither DR Horton nor its competitors engage in the business of building luxury homes that intuitively favors a “Build to Order” business
model. DR Horton and its competitors primarily target first-time homebuyers (and first-time move up buyers) who are more likely to prefer the ability
to move quickly into a home over the ability to customize it.
DR Horton endeavors to always bring homes to market at a price point that is below that of its competitors and to always have homes available at
various stages of construction so that a buyer is able to close on a new home sooner than the three to six months it takes to build that home from scratch.
The end result is that DR Horton builds and sells homes at a faster pace and at a lower cost than its competitors (it really is just that simple). DR Horton’s
unique strategy which is the homebuilding equivalent to Sam Walton’s mantra to “price it low, stack it high and watch it fly” is a major reason why DR
Horton rose from relative obscurity in the early to mid 1990s to become the largest homebuilder in the United States at the height of the housing boom.
% of Total Homes Sold by the Top 5 US Homebuilders
1996 2000 2005
DR Horton 6.5% 19.1% 24.2%
Pulte/Centex 54.9% 40.4% 40.1%
Lennar 15.7% 18.6% 20.0%
KB Home 19.0% 20.0% 14.7%
The boom in housing caused all homebuilding companies to grow and DR Horton’s oversized growth rate was often viewed to be more the result of
greater risk taking (in part because it built on spec) than due to a superior business model. However the opposite is true. DR Horton’s superior business
model caused its competitors to aggressively pursue land and increase leverage to compensate for their competitive shortcomings. This has further
distanced DR Horton from its competitors and DR Horton has not only maintained its industry leading position during the downturn, it has expanded it.
In 2007, the four largest builders in the US were DR Horton, Pulte, Centex and Lennar all with similar sales levels. Despite the merger of Pulte and
Centex in 2009, DR Horton closed 49% more homes in the 1st quarter of 2010 than its next closest competitor and DR Horton’s 1st quarter sales were
only slightly less than Pulte, Centex and Lennar combined. DR Horton is dramatically outperforming its peers.
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3. % of Total Homes Sold by the Top 5 US Homebuilders
Last 12 Q1 2010 Q1 2010
2006
Months (Closings) (Sales)
DR Horton 24.8% 31.0% 37.4% 42.2%
Pulte/Centex 36.1% 36.6% 33.3% 28.3%
Lennar 23.2% 18.7% 17.6% 16.9%
KB Home 15.0% 13.8% 11.6% 12.5%
The most common argument for why builders utilize a Built to Order strategy as a means to convert renters into homeowners is the claim that it
produces better gross margins. However DR Horton’s operating margins have always been equal to or better than any of its competitors partly because
the higher sales volume leads to greater operating efficiencies (DR Horton’s sales per employee is also nearly 5 times greater than Wal-Mart). DR
Horton’s long standing strategy that uniquely emphasizes volume and speed over gross margin has also brought a new added benefit that is further
separating DR Horton from its competitors. DR Horton is one of only a few builders that is willing and able to fund “spec” construction (with a long
history of doing so) and as a result the company has emerged as the preferred partner for land sellers who wish to maximize the value of their residential
land assets by building homes as opposed to selling the entire property for pennies on the dollar in an illiquid land market. While all builders boast of an
ability to capitalize on the opportunities brought about by the collapse of the housing market, it is becoming readily apparent that no other builder is
more uniquely positioned to do so than DR Horton. And the proof ultimately lies in the numbers as no other builder has entered into more contracts to
open new communities since 2009 than DR Horton (it’s not even close). If fact despite DR Horton’s already comparatively larger size, it is the only
public homebuilder that is conclusively growing its “community count” (the homebuilder equivalent to stores for a retailer) and is likely to continue to
do so for many years into the future. In addition, the percentage of DR Horton’s current sales derived from newly (2009 or later) acquired communities
is significantly higher than that of its peers.
% YOY Change in % of 1Q Sales from
Communities (Stores) Newly Acquired Communities
DR Horton 29% DR Horton 35%
Lennar -5% Meritage 19%
KB Home -9% MDC Holdings 10%
Meritage -12% Ryland 10%
Hovnanian -17% Lennar 9%
Pulte/Centex -21% Hovnanian 8%
MDC Holdings -27% KB Home 5%
Ryland -29% Pulte/Centex 0%
DR Horton currently trades at a discount to its book value (which consists of cash and deeply discounted land) despite a potential for future growth that
is almost unmatched by any company in any industry. This should not come as a shock to anyone who has followed the company as it has been
mispriced by the market for the better part of the last twenty years. From 1992 through 2006 DR Horton grew revenue faster than Amazon.com with
operating margins 5-10 times greater than Amazon.com yet never once did DR Horton trade at a premium to the market (based on earnings). The
recent collapse of the housing market has been severe and certainly warrants a drop in the valuations of companies related to the housing market.
However, the persistent mispricing stems from the market’s past and present failure to value DR Horton as an operating company. Instead, DR Horton’s
valuation has always reflected the perceived market value of its land assets (Nike, for example is not valued based on the market value of its shoe
inventory). Due to this narrow view, metrics used by analysts and investors to assess the value of an operating company are rendered immaterial to DR
Horton’s valuation, like Operating Margin, Return on Capital, Revenue Growth and most importantly the Present Value of Future Earnings/Cash Flow.
No other company (that I know of) is greeted with such yawns after reporting a 50% increase in sales as is DR Horton. The results were almost of no
consequence to its valuation. The argument that DR Horton is significantly more valuable than the market value of its land is overwhelming supported
by fact. KB Home sold one third fewer homes in 2009 than it did in 1996 while DR Horton sold more than ten times as many homes in 2009 than it did
in 1996. The two firms compete directly against each other, yet DR Horton’s costs as a percentage of revenue are nearly half that of KB Home (13%
versus 23%). Despite of this, DR Horton and KB Home both trade at approximately the same premium/discount to their net assets. In other words, the
market assigns an identical intangible value to each operating company (zero) despite the fact that virtually every current or historical operating metric
favors DR Horton (Sales Growth, Operating Margins, Return on Capital etc . . .). DR Horton grew by 1000% over the last 13 years while KB Home grew
by -33%, the companies clearly should be valued differently.
I believe the main reason DR Horton is persistently mispriced is because the company is inaccurately classified as a “homebuilder” (analysts hate
homebuilders). In actuality, DR Horton’s employees don’t “build” anything. DR Horton’s employees don’t carry hammers, they don’t pour cement. DR
Horton employees carry pens and glossy brochures. DR Horton is a sales and marketing organization, the vast majority of its employees engage in the
business of selling homes, not building them. The bulk of DR Horton employees not engaged directly in sales work as accountants or bookkeepers. DR
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4. Horton is actually a “New Home Retailer”. DR Horton hires third party subcontractors to build its homes much like Nike hires third party
subcontractors to manufacture its shoes. DR Horton is no more of a “homebuilder” than Nike is a “shoe manufacturer” (which it is not). In truth, the
operations of DR Horton and Nike are more similar than they are different as both principally engage in the business of sales and marketing (analysts
love sales and marketing companies!). Nike does turn its inventory much faster than DR Horton, but Nike also must invest heavily in its distribution
system and is forced to carry a large amount of receivables from its retail partners (it does not receive cash immediately for its sales like DR Horton
does). The pluses and minuses largely even out and the operating margin and the return on capital of the two businesses are comparable. Nike’s
business does benefit from the strength of its brand more so than DR Horton ever will, however Nike also must invest heavily to maintain that brand.
Addias, Puma, Reebok and Converse all were at one point the premier brand of athletic shoes in the US States and yet each have declared bankruptcy or
experienced a major financial restructuring during the last twenty years, so I don’t think one can argue that Nike’s future earnings stream is any more
stable than that of DR Horton simply due to the current strength of its brand.
If you gave DR Horton’s financial results to an analyst and said it was a shoe company (or a retailer) the company would literally be perceived to be 10
times more valuable. Even if the market continues to incorrectly perceive DR Horton as a “homebuilder” the potential return on our investment is
enormous because DR Horton will likely increase its book value dramatically over the next 5-7 years. However if market ever realizes that DR Horton is
actually a “New Home Retailer” our potential return is many times greater.
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