LGI Homes Expands to Phoenix

LGI Homes, the upstart start-up builder in Texas that has climbed quickly to No. 58 on the BUILDER 100 list, is expanding its unique business model to Phoenix, Ariz. Chris Kelly, a Pulte division president of operations in Phoenix, started working for LGI in January as its new Phoenix division president. But Kelly spent the first few months of his new job in Texas, learning the LGI “process and culture,” he said. It was a big change in focus for the 11-year Pulte veteran. Rather than focusing on creating and selling products for every category of buyer, as Pulte does, LGI targets one niche of buyers—apartment renters—with the intensity and pin-point accuracy of a laser beam. The company’s main form of marketing is a direct mail campaign targeting 20,000 apartment dwellers every month, telling renters they can buy for the same price they pay to rent. LGI, which closed 439 homes in 2010. LGI approached Kelly with the proposal that he pilot their new Phoenix initiative. Kelly, who was not unhappy with his job with Pulte, was attracted to the opportunity to build homes for first-time home buyers. “Everything I heard, I liked,” Kelly said. “It was an easy decision because it reminded me of some of the things I wanted to do when I got into home building, to make money but really target that first time home buyer, people who are afraid to buy a home.” Kelly remembered how scary the purchase process was when he bought his first home, and he was working for Pulte at the time. “I really couldn’t turn [the offer] down,” he said. “A lot of builders are positioning themselves for this great recovery, but our model is working today.” And he foresees it working in the future as the market improves as well.

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