American Builders Quarterly – Article

Schwartz Custom Homes as Featured in American Builders Quarterly
By Jennifer Hogeland

There is a saying, when all else fails, do what you know. When the recession hit, Mitch Schwartz explored a few potential opportunities before concluding he needed to stick with what he was familiar with – home construction.

Schwartz established Schwartz Custom Homes two years ago in the midst of one of the worst housing markets the country has seen. To survive in Austin, Texas, Schwartz would have to rely on his experience and tap into his vast network.

Schwartz has been in the business more than 30 years. His first experiences in construction were working summers with his father, a custom homebuilder in the Detroit area. In 1979, when Schwartz completed his degree in construction management at Michigan State, the region was in a bad economic state.

An offer to join the management program at Ryan Homes, a well-known public homebuilder, lured Schwartz to the East Coast. “I joined Ryan Homes in Richmond, Virginia, at a time when they were building 800 homes in the area a year,” says Schwartz. “But, less than two years later, the recession caught up to me there.”

In the early ‘80s, Schwartz moved to Texas where he worked for Trammel Crow, one of the largest commercial apartment developers in the nation. Within a year he was promoted to superintendent; over the next nine years Schwartz was responsible for the construction of approximately 2,500 apartment units throughout the country.

In 1990, and over the next two decades, Schwartz worked for two major public home construction companies. He worked his way up the corporate ladder, moving from project management to director of construction to vice president of operations. Schwartz found success at every turn but eventually the cursed recession found him again.

Austin saw a dramatic shift in home sales as the economy struggled. Schwartz explains the city went from 18000 closings a year to approximately 5600.

His instinct was to search for a new opportunity. He spent six months working for a friend’s roofing company. Then he moved onto a promising port-o-potty venture, which failed when Schwartz found himself with a bad business partner.

“I more or less started my own business kicking and screaming,” says Schwartz. “I got tired of doors closing and decided it was time to take matters into my own hands and to do what I know.”

While initially hesitant to go out on his own, Schwartz found his confidence. He adds, “I knew I had a real history on my own. The last few years I closed over 850 homes a year.”

In addition to his knowledge and proven ability, Schwartz had earned the respect from the community and his peers. He drew on his strengths and developed strategies to support his business growth.

Building 101 told Schwartz it was all about location, location, location. He says, “Austin is a very difficult place to build. It is hard environmentally and with neighborhood associations so I decided to go infill, to look for lots and to try my wares.”

He bought two lots at the edge of Hyde Park – close to the city and in a desirable location. As an older, turn of the century community, Schwartz demolished five homes in order to construct Parker City Homes – a two building, four-unit complex. The project launched in April 2012 and is expected to be complete later this year.

To spur his growth in the struggling economy, Schwartz found owning land outright and financing the construction allowed him to move his projects forward. He adds, “People want to live in Austin but land and doing construction here is expensive.”

This approach permitted Schwartz to secure six lots in Berkley Court. In mid 2012, he began construction on the first of the freestanding single family attached homes; he closed the sale in early 2013. A second sale was closed shortly after and he expects to start the remaining four sites soon.

“Berkley Court is a contemporary product – it’s energy efficient and a good value for the area,” says Schwartz. He believes the little touches make a difference n the sale of a property so he included concrete floors, granite or solid surface throughout and under-mount sinks. The properties will range in size from 1,600-2,100 square feet.

He keeps in his eye on market demands. Energy conservation is of interest to Austin homeowners so he focuses on reducing the amount of energy his homes use. Schwartz says, “I do my research on what the market wants and then show homeowners the value of it.”

Schwartz has earned a reputation of building homes with honesty and integrity. He assures clients they will pay a fair price and have a positive building experience. To do this, Schwartz remains engaged in every project to maintain the quality and value of the home.

This one-man show expects to close 10 homes in 2013.

While many builders would rather keep out of the city than deal with the crippling regulations, Schwartz has the patience to get things done. He says, “I know how to maneuver through the obstacles imposed by neighborhood associations and city officials. If people have questions or concerns about a new construction project I’m happy to talk to them – many builders have the attitude, ‘I’m going to build the way I want.’” Schwartz suggests while building in the city of Austin has its challenges, the competition in the suburbs is fierce.

Schwartz has found networking pays off. “If I have an issue with something I am able to make a phone call and reach one of the building officials in town,” he says, “I find that very helpful.”

In early 2013, Schwartz partnered with another general contractor to work on a commercial project – Hyde Meadow Winery. Using primarily metal and iron, Schwartz will construct three  buildings on the 80-acre property.

“In this climate and being a small independent builder you have to be flexible and figure out how to be success,” says Schwartz.

Because of his passion for the industry, Schwartz is very active in the home building community – he serves on the Board of Directors for Home Builders Association of Greater Austin, Texas Association of Builders and National Association of Home Builders. In 2012, he was recognized by the Home Builders Association of Greater Austin (HBA) as Custom Builder Member of the Year.

As for the future, Schwartz is looking at 2014 and beyond. He adds, “I’m looking to secure some more land right now in the city. I’m looking for a small patio community and I hope to grow my business that way.”