Photo credit: Secondary structures like this barn are less common today, but affluent custom home clients still want quality products and plenty of detail in their main residence.
In a market that has seen home building slow significantly, Cary Hamilton has tripled his workload in the past five years. Maybe it’s because of the level of detail in the homes he builds, or his cost-plus approach to construction management. Or, maybe it’s his attitude; he simply won’t build a home until the clients agree to remain friends after the process is complete.
“Friendship is important to me, which leads me to do things not in my job description,” Hamilton explains. “I have a client with 55 acres, and I’m out there literally in ditches doing yard work for him. I don’t get paid for that, but I don’t mind doing it, either. I spend a lot of time doing these things because that’s what I’d do for a friend.”
Not every prospect is friend material, however. Roughly 20 percent of the prospects who approach Hamilton Construction in Steamboat Springs, Colo., are price-shoppers who want a home built cheaply and quickly, and he’s quick to respectfully decline the work. “I don’t bid anything. I’m all cost-plus. I tell clients what my margin is. Each month I send them a photocopied bill from the subs, and I add my percentage to it. I’ve noticed affluent people don’t mind spending money; they just don’t want to be screwed. I’m making a fair amount of money and they’re happy with that. They understand how business works.”
Ultimately, Hamilton is a nice guy who follows the rule of attracting more flies with honey. “Construction is a rough job, and being a jerk does nothing but ruin the mood of everyone involved. So I try to be an upbeat, happy guy; the long-short is, be nice,” he says.
Weather or not
Hamilton isn’t sure exactly which reason is behind his success, and he doesn’t have time to figure it out. Snow is on the ground roughly seven months a year in Steamboat Springs, which means he has limited time to enclose a home. Snow changes the way homes here are designed, he adds.
“Some of the houses I build have 130-lb. snow loads. There’s a big difference in the cost of building a house to withstand 130 lbs. per sq. ft. versus one in California that doesn’t need to hold any snow, so framing and labor are more. Architecturally, the snow creates limitations, too. We can’t do big cantilevers. We can’t even have an eave above the garage door. All garages around here are designed into a gable end,” he explains.
Limitations like these require close collaboration with architects and designers, who typically appreciate Hamilton’s input. Designers will draw plans, which Hamilton says more often than not can be built in a way that would save money and maintain the design intent. His design insight is so keen that sometimes owners approach him with design questions. Still, he sticks to construction and only aids in design.
Half the time Hamilton suggests architects to clients, and on the other jobs the clients have chosen the architect, whom he more than likely knows, considering the tight-knit community in Steamboat Springs. Relationships must be solid, since Hamilton insists on working closely with designers through project completion.
Working relationships are commitments, with most jobs taking an average of 18 months to complete. “A typical home takes roughly two years. On the jobs I do, the house costs a million or $2 to $3 million, and usually are $325 a square foot. The home I’m working on now is 12,000 sq. ft., but house sizes in general have gone down to an average of 5,000,” he says.
Ideally, Hamilton is working on two homes at any given time in a year. However, that workload has increased to roughly three or four during the past two years. Most of the homes are custom secondary homes for upper-end clientele. Occasionally he builds for first-time owners, who also fall into the upper end of affluent society.
As affluent people, typically they’re coming from a big city environment in which they’re used to a cutthroat lifestyle of doing business, and they want Hamilton to get three bids from every sub. Cutthroat, however, is not in his vocabulary.
“Drywall is drywall, so I will shop that hard. But, as far as plumbing and electrical work, I’ve spent years developing relationships with these people, and I know that if the electrician needs help pulling some wire upstairs, my carpenters will drop everything and help him. And the same goes all around. So when they give me a bid, it’s less than what they would give on a bid for a different contractor. I know it’s going to come in at what they say it’ll come in. It takes a while to get homeowners to trust this, but in the end clients often comment that when they’re watching work done on their house, they say it feels like one big company with flooring and electrical divisions rather than separate subs because all the guys work together well,” he says.
Hamilton occasionally becomes frustrated with clients’ requests, including when they want an estimate of what their house will cost. They always want it done in four days, which Hamilton can’t do. “What they don’t understand is the level of finish they want, and they always pick something nicer than what I budgeted. Then, they change their minds, and it always costs more than the original budget. I have to keep explaining this throughout the project.”
A big misconception most potential clients have is, that in a bad economy they can build homes more cheaply than during good times, he explains. “I can’t. Name me one material that’s gone down in price. All material has gone up. The price of labor has gone down, but I abandoned the philosophy of hiring cheap labor years ago. You get what you pay for,” he says.
Hamilton has no marketing plan. He has no website. All his business comes through word-of-mouth. The closest Hamilton comes to doing marketing is, for example, when a child kicks a hole in a wall, and he fixes it for free; a service which carries a lot of marketing value. “Or, I’ll give them a company jacket or hat, and when they wear it they’re my marketing. I need them going to dinner in the community and telling people to hire me. That’s my marketing, and there’s little cost for that. Just this morning I was adjusting doors in a house I built six years ago. I adjusted them at no charge. Owners appreciate it, and they remember, too.”
Starting as a laborer 23 years ago earning $7.50 an hour to support his skiing habit, Hamilton advanced to become a carpenter then a foreman after which he launched his general contracting business in 2005. Essentially, he stumbled into his success, and is loving every minute of it.