Controlling your own destiny
Darling Homes’ management team examined the market and
found that developers were satiating the need for inexpensive
homes geared toward first-time homebuyers, not building the kind
of developments that Darling Homes’ buyers want to live in. Its
buyers want open space and larger lots, and sometimes, gated
communities, which were not plentiful and were not in the works,
either.
It became apparent that within a few short years, it would run
out of places to build, so the answer became to get into the development business.
“We like to have product lined up a good three years in advance,”
Darling says. “We didn’t see we’d be able to satisfy the portion of
our product mix that was higher up with what was coming. We felt
like we would either partner with a developer or develop ourselves, if need be, to satisfy that requirement.”
The Darlings were presented with an opportunity to partner with
a local family, the Newmans, to develop its land. Newman Village,
the master-planned community in Frisco, will break ground this
year.
Darling says most of the decision was simply financial. Partnering
was a good solution for the company and has kept its debt lower
than it otherwise might be. He says he and other key executives
within the company are cautious about buying too much land
because they don’t want to mire the company in debt. The home-building business is already capital-intensive, and Darling says it’s
important to know your limits.
“We didn’t want to warehouse a lot of land,” Darling says. “There
wasn’t the same kind of risk as purchasing 260 acres of land. This was
the right deal and the right location.”