We are engaged in the design, construction, marketing and sale of new homes
in markets in Texas, Arizona, Florida, Georgia, New Mexico, South Carolina,
North Carolina and Colorado. Our core markets include Houston, San Antonio,
Dallas/Fort Worth, Austin, Phoenix, Tucson, Tampa, Orlando, Fort Myers, Atlanta,
Albuquerque, Charlotte and Denver. Our management team has been in the residential
land development business since the mid-1990s.
We developed our unique operating model based on our belief that there is a
more effective and efficient method of constructing and selling homes. We are
focused on maintaining an appropriate supply of move-in ready homes to fuel
our dynamic sales force. We believe that the key competitive advantages of our
operational business model include our sales and marketing expertise; recruitment,
selection, training and development of our people; our disciplined land acquisition
process; and our quality assurance and quality control procedures.
Our unique operating model has been refined since our inception. We believe
our operating model will be effective with respect to home sales across all
price points, including in our new markets. We believe that our business model
can be adapted as needed, for the requirements of individual communities and
new geographic markets.
Our even-flow, or continuous, construction methodology enables us to build
and maintain an inventory of move-in ready homes that are available for immediate
sale. We offer a set number of floor plans in each community with standardized
features that commonly include upgrades such as granite countertops, appliances
and ceramic tile flooring. Our homes are designed to meet the preferences of
our target market of potential homebuyers and enable cost efficient and effective
construction processes. We have developed a collection of home designs, which
can be modified for local conditions and market preferences, and implemented
across multiple communities to maximize efficiency.
We believe in 2015 and beyond, we will continue to focus on our target market
of entry level homebuyers. Our entry level homes are priced to the upper $200,000s.
We expect that sales of our Terrata Homes brand will represent less than 10%
of our home closings through 2016. We expect to continue to utilize our even
flow construction methodology in communities with homes at all of our price
points and will maintain our focus on marketing complete or move-in ready homes
with standardized features.
We employ experienced construction management professionals to perform the
tasks of general contractors throughout home construction in each of our communities.
Our employees provide the purchasing, construction management and quality assurance
for the homes we build, while third-party subcontractors provide the material
and labor components of our homes. In each of our markets, we employ construction
managers with local market knowledge and expertise. Additionally, our construction
managers monitor our compliance with zoning and other regulations, production
schedules, and quality standards for their projects.
We endeavor to obtain favorable pricing from subcontractors through long-term
relationships and consistent workflow. As we have expanded into new markets
outside of Texas, the employees that we have hired in those markets have brought
long-term relationships with several subcontracting firms. We have expanded
upon existing relationships with subcontracting firms also located in Texas.
A number of our trade partners have subcontracted on our projects since we commenced
homebuilding operations in 2003. We purchase some components and materials centrally
to leverage our purchasing power to achieve volume discounts, a practice that
often reduces costs and ensures timely deliveries. We typically do not store
significant inventories of construction materials, except for work in progress
materials for homes under construction. Consistency of trades is an integral
part of our homebuilding operations that also leads us to reduced warranty costs.
We believe in building long lasting relationships with our trade partners in
order to provide consistent, quality and timely deliveries across our markets.
We also work closely with our construction managers and subcontractors and train
them using a comprehensive construction manual that outlines the most efficient
way to build an LGI home. We believe our emphasis on developing and educating
our employees and subcontractors is a key differentiator relative to our peers.
Our allocation of capital for land investment is performed at the corporate
level with a disciplined approach to portfolio management. Our Acquisitions
Committee meets periodically and consists of our Chief Executive Officer, Chief
Financial Officer, Chief Operating Officer, and Executive Vice President of
Acquisitions. Annually, our divisions prepare a strategic plan for their respective
geographic areas. Supply and demand are analyzed to ensure land investment is
targeted appropriately. The long-term plan is compared on an ongoing basis to
evolving realities in the marketplace and is then adjusted to the extent necessary.
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