Housing Rehabilitation and Property Management: Entrepreneur Interview

Introduction to the Business and Its Owner

The subject of this interview is an entrepreneur and owner of a construction company that engages in the rehabilitation of older properties as well as the construction of new ones. The business is primarily local in nature and is focused on helping future and existing homeowners realize their goals. Sometimes this entails improving or modernizing an existing structure from the ground up; at other times the improvements are more minor. Recent projects have included creating additions and garages and modernizing older houses so they are better able to withstand the elements and can support modern conveniences. The owner has also constructed prefabricated homes from scratch, working with clients to create their dream homes.

The owner has worked in construction in various capacities over the course of his life, which is one reason he selected his current line of work. He said he enjoys being his own boss, setting his own hours, and having the unlimited income potential that owning a business can provide. He also described it as exciting to see a house built from scratch, or to work with an existing homeowner in a creative fashion. To succeed in housing rehabilitation — particularly with very old houses — he had to pursue additional self-education, such as learning about the risks of lead paint in older structures and the types of materials needed to modernize such homes while still allowing them to retain their antique appearance.

Responsibilities and Daily Operations

In his role, the owner carries a wide array of responsibilities. When planning a new home, he must ensure that the building satisfies all local codes and ordinances. This is not simply a matter of the size and scope of the house itself, but also encompasses how it will support the future owner's electrical, plumbing, and other utility needs. He works with various contractors and subcontractors to complete the house or improvement, coordinating their efforts to bring each project to fruition.

Owning a construction business, he noted, is exciting because every day is different — and he stated without hesitation that he would do it over again. He enjoys working with clients to see their visions realized and finds value in the different requirements and challenges presented by every new project.

Impact of the 2008 Housing Crisis

When the owner first entered this line of work, it was during the height of the housing boom. Many individuals were looking to enter construction because of the excitement generated by high levels of demand and strong resale values. Construction became one of the hardest-hit industries during the subsequent recession, because the 2008 credit crisis originated in the housing market. Consumers became more reluctant to build new houses, banks grew more cautious about lending to potential credit risks, and more deals became available on the open market. Home buyers were less likely to construct a new house when they could purchase one relatively cheaply. The market for second homes and income properties also declined.

However, the owner was still able to stay solvent because his business was diversified and he could emphasize different aspects of home construction. When consumers were buying short-sale homes or older homes, they frequently needed to contract a significant amount of work to rehabilitate the structure. Some buyers purchased very cheap foreclosed homes to rent — properties that had not been lived in for many months. Creating livable foreclosed and short-sale structures became another viable source of income.

References

IRS. (2012). Limited liability company (LLC). Retrieved from

Mutikani, L. (2012). Housing market hits pothole in February. Yahoo! Finance. Retrieved from