Breland Assets Acquired by DR Horton

[felix1028]

So, quick question from someone who is somewhat new to the area. I remember that Breland was part of the "3 Bs", builders not to buy from. I understood that their building quality has vastly improved over the last few years and people are forgetting about that past -- I personally didn't let that stop me when I bought a Breland Home a few months ago.

Now, I see from previous posts that this "...isn't the first time Breland has done this..." Could selling their building rights in the past have anything to do with their "3 Bs" reputation?

[Seth Parker]

Originally Posted by LCTMadison

His prices are already starting to go up, and in many neighborhoods have gone up, but yet he is still under competition. Competition is having to reduced to compete with him...there are many builders (one I know in particular) that are celebrating thinking this is going to change things, don't know if it will. For now, it appears business as usual.

And I don't think you understand my point....he is holding massive amounts of land right now and does not have a need to acquire additional parcels (not for new construction anyways).....again, Louis does not desire to be a builder, and he never has. Building was his way of keeping his money flow going during a down market, as crazy as that sounds.

No, I agree with you. He doesn't HAVE to get any more land right now, but you and I both know that he will still buy it up to secure future places to go. Unless we have another dip in sales that causes some builders/developers to go out, anything that he buys from now on will be closer to retail pricing instead of the steep discounts that he built his very successful business off of in the last 3 years. Of course we'll have another housing situation like this in the future at some point, but that could be too far down the road for Breland to be a player, or it could be next year and he comes in and swoops up everything again.

The big question is how fast will DR Horton keep selling? If they're able to replicate the ~600 unit/year, they can blow through a lot of land pretty quick. If not, they'll be able to keep pricing down until they run out of what they have.

With that being said, I don't think anything will really change for, at least, a year or so...maybe 2. At that point, I think that the difference in price from DR to the competition won't be as significant.

[Big Grumpy]

Originally Posted by felix1028

So, quick question from someone who is somewhat new to the area. I remember that Breland was part of the "3 Bs", builders not to buy from. I understood that their building quality has vastly improved over the last few years and people are forgetting about that past -- I personally didn't let that stop me when I bought a Breland Home a few months ago.

Now, I see from previous posts that this "...isn't the first time Breland has done this..." Could selling their building rights in the past have anything to do with their "3 Bs" reputation?

As I recall, the 3 B's of homebuilders to avoid back in the mid-nineties were Breland, Benton, and Brian Homes. One of those bankrupted more than a decade ago, one reorganized and is now probably the top builder of homes in the $300k range, and one sold out and then reappeared and has sold out again.

As for the latter, the first time I remember Louis Breland selling off his homebuilding assets was in the late nineties. I would have to go back and refresh myself on the details, but my recollection from looking this up previously is that he sold the assets to Westminister Homes in the '98/'99 timeframe for somewhere around 3 million dollars.

Westminister did not acquire the Breland name as part of the transaction and built houses here under the Westminister name for somewhere around five years. At some point in the mid 2000's they sold their assets here to Adams Homes, who built here under the Adams Homes banner. Breland relaunched Breland homes in 2008 or 2009 and has been building homes and buying up distressed properties since.

It was never clear to me whether Louis signed a no-compete clause with Westiminister or he simply saw a good time to re-enter the market when he relaunched Breland Homes. The thing that made me think there might have been a no-compete agreement is that there was about a ten year lapse between the sale to Westminister and the relaunch of Breland Homes.