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MILL-BUILT ARCHITECTURE for NEW OLD HOMES

In the centuries old tradition of "Master Builder", Connor Homes has pioneered a new method of building homes that draws from the highest standards of sophisticated site- built custom carpentry, coupled with a variety of off-site design and millwork innovations. This new amalgamation of the very best established building practices and millwork cutting and assembly techniques has forged a building process that defines Connor Homes as one of a kind in the building industry. Connor Homes calls this new systems-built process Mill-built Architecture.

A distinguishing departure from other systems-built processes is that Mill-built Architecture makes no concessions or compromises for quality or design standards from traditional custom design/ build methods. In fact, Mill-built Architecture is able to enhance the already high standards of sophisticated custom design/build methods by incorporating a diverse array of high tech mill woodworking machinery driven by architectural software that not only gives the company the capability of designing virtually any sophisticated architectural concept, but also enables it to reproduce architectural details more accurately and  with better fit and dimensional control than is often possible with the limitations of on-site tools and labor.

While Mill-built Architecture is able to upgrade overall quality of sophisticated design details, the system does it with an efficiency that far outpaces the ability to reproduce the same details with on-site labor, and so the end result is a higher quality product for less cost.

Off-site architectural construction and millwork is not new. It has long been recognized as having the potential to create a better product for less. Indeed, parts and pieces of homes have been built off-site for centuries. But in the past half century or more, systems built homes, for the most part, have focused on cost savings to the detriment of the quality inherent in millwork production technology. With the advent of Connor Homes' Mill-built Architecture system, the "better" side of the equation is successfully married to the "less" in costs, making this a truly new and innovative approach to custom high-end building.

In addition to the obvious benefits of building house parts and pieces with production techniques and machinery, the "integrated" dimension of Mill-built Architecture also include a methodology that melds the often disparate and frustrating related disciplines of architectural design, estimating, materials take-offs and purchasing, scheduling and even financing, all under one roof and one supervision.

Connor Homes has spent decades analyzing the pros and cons of many of today's accepted systems-built processes, and uses the best aspects from many, while modifying and improving, as well as inventing its own approaches to solving the quest to deliver time and tradition-honored quality home construction with efficiency. The Mill-built Architecture system it has pioneered is the result of those many years of study and research, and interestingly, while the system relies on some innovative technology and methods, it also relies on the bedrock premise that the system not only mimics traditional high end custom built quality, but actually improves upon it.

ECONOMIC WOES ARE BEST SOLVED IN THE PRIVATE SECTOR

Growing up with six brothers and five sisters, we learned quickly to fend for ourselves and to take responsibility for what befell us on the streets and playgrounds of our youth. And most kids that I knew were the same way. But a few always seemed to need a backup in dealing with life's ups and downs. They dealt with adversity by running to an authority figure like a parent, a teacher etc.

There were far more of those who took responsibility for themselves than those who did not when we were kids, but now that minority has found a way to multiply its numbers so that as a nation, when adversity strikes, far too many of our fellow citizens turn to an authority (the federal government) for help. Worse yet, many of these self-help- challenged folks have become our representatives in congress who, faced with the current economic downturn seek redemption in a massive government stimulus plan (their characterization, not mine) whose only redemption will be a temporary sense of relief that someone bigger than themselves will make everything all right again. They couldn't be more wrong.

The current economic situation is serious. If it becomes a crisis it will be because of the stimulus plan. The country has seen economic downturns in the past, and while this one is more serious than some others, it is not yet close to the dire situation of the great depression, to which it has been compared by those who believe that such a comparison compels the congress to enact sweeping legislation allowing unprecedented government controls on the private sector economy. Those who believe that this government meddling in the economy is an appropriate response to the present economic situation have lost faith in the capitalistic system that has driven this nation to unparalleled economic greatness since its beginnings, and threatens the lifeblood of the economy which is entrepreneurship, and most especially, small business entrepreneurship which in the past has always been the catalyst that ignites a stagnant economy to revive and prosper.  Capitalism is able to do this because it has a built-in stimulus plan of its own which goes into corrective mode when triggered by a struggling economy, but those corrective actions are stymied when an overreaching federal stimulus plan thwarts the natural and cyclical efforts of a self-healing economy.

It is interesting to observe how business, especially small business, has reacted to the economic slowdown. The first reaction is typically a hunkering down which is characterized by an immediate cutback in expenses. Unfortunately for those affected, this usually plays out as layoffs. But to put a bright spin on an otherwise difficult process, layoffs are the first sign of a natural corrective action being taken by business to head off the dreaded crisis of a worsening economic downturn. Most businesses anticipate that layoffs are a temporary event that allows them to regroup in an expectation that their economizing efforts will pay off, the business cycle will move forward, and a return to normal business activity will allow the rehiring of the laid off employees.

In smaller economic downturns, this may be all that is required to right the economic ship. In more serious downturns such as the present, other corrective measures have to be taken. It is no secret that at the top of the economic boom, businesses tend to get careless with efficiencies and take for granted that the good times are infinitely sustainable. A business can be fat while its revenues are increasing, but in reverse mode, it must take swift and drastic measures to survive. Hence, businesses in a downturned economy look for efficiencies wherever they can be found, and they are often easy to spot as they typically sit prominently and boldly in the fat created during the boom cycle.

The third reaction taken by businesses to survive and reinvent prosperity is to take a new and creative approach to marketing. Witness the many promotions, sales, and strategies that businesses cleverly invent to entice a confidence-challenged consumer. Even the most wary consumer is hard-pressed to look away when creative business marketers are making offers to sell cars for example that not only are heavily discounted, but come with six months worth of free gas, or lifetime service!

No government stimulus package can come close to reinvigorating the economy like the self-imposed stimulus program put forward by private enterprise in its own self interest to survive an economic downturn, and when allowed to play out as the natural corrective action to the inevitable cyclical economic downturn, it is by far a much more powerful stimulus than a government plan that at best yields $65 per month to the average paycheck, while carrying the downside of a likely increase in inflation, a generational transfer of debt, and a governmental regulatory burden that actually acts like an anchor on the economy, rather than a stimulus.

The private enterprise stimulus package works in another way that a government stimulus cannot; It creates wealth by transferring to customers the benefits of the new found business efficiencies, along with the costs savings to be had in the creative enticements offered by businesses that in their own struggle for self survival, they pass on as financial rewards to their customers.

Is there a role for government in any of this? Of course, but it should be limited to government's ongoing responsibility to help those who truly cannot help themselves, and those numbers naturally increase in an economic downturn. It also rightfully should be the overseer of banking and financial institutions, as it has been shown in the current downturn that when these institutions act in their own self interest, consumers are usually victims, not beneficiaries. In that role, it should take action to see that the credit system has the liquidity it needs, as credit is essential for the private sector to operate, particularly when in the throes of battling an economic down cycle. The government can also act as a cheerleader for the economy, but even in that capacity it should get out of the way and let the real players take the field!

As we learned on the playgrounds of our youth, self determination carries some risks, but the upside is far more rewarding than the shelter of authoritative protectionism. The collective efforts of millions of private sector business people striving together to right a struggling economy is a much more effective economic stimulus than a government stimulus costing billions to present and future taxpayers. Allowed to play out naturally with limited government interference, the economy will correct itself faster and return to a new round of wealth creation driven by the same class of entrepreneurs who have always come through when needed with an appropriate stimulus package.

Michael Connor, CEO, Connor Homes

CREATING WEALTH IN THE NEW OLD HOME

Just about anyone who takes on a home mortgage has the expectation that wrapped in the liability of a monthly mortgage lies the potential for equity gain. That gain comes in two forms; first, as each month pays down a larger and larger portion of the original debt, equity is increased as represented by the differential between the original debt and the decreasing amount owed. The second form is the reasonable expectation that the value of the property continues to increase as a function of real estate inflation. The increase in property value is the most seductive, and quite often is the most lucrative, as it is essentially "free" money. But as many homeowners have painfully found out in the present subprime lending debacle, not only was there no "free" money (equity) to be had, in fact there was a decrease in the value of their property.

Building a new home has yet another aspect of equity creation which is often overlooked, but can be the most powerful equity booster out there. The value of a new home is often measured as a function of the materials and labor required to construct it, along with the cost of the property on which it sits. But in reality, the value of a new home is a subjective judgment of what buyers in the marketplace perceive its value to be. And herein lies the opportunity for equity growth that homeowners and entrepreneurs alike seek out as the holy grail of real estate investment.

The fact that we are talking about wealth that is created in other people's perception of value certainly makes this a dicey adventure, but there are axioms that when applied greatly diminish the risk and usually insure a positive (often a very positive) and immediate equity gain. Consider this scenario; Homeowner A and Homeowner B purchase side by side lots of the same type and value for $100,000. They both hire the same builder to build their houses and the builder uses $150,000 in materials and $100,000 in labor to construct each house. Upon completion each house is put up for sale, and homeowner A sells his house for $370,000, but homeowner B sells his for $450,000. Where did the extra value come from? It came from the perceived value of the buying public who saw something in Homeowner B's home that was not seen in Homeowner A's house, and that "something" is embodied in the aesthetic value of the house which is the primary driver of the marketplace's perceived value.

In the above hypothetical case, no extra money was spent creating aesthetic value, so how was it achieved? The wonderful thing about aesthetic value is that it doesn't have to cost more to create it. It costs about the same to design a bad plan as it does a good plan. Good scale and proportion are no more costly to achieve than bad scale and proportion. Pleasing colors cost no more than unattractive ones. And so how does a homeowner ensure that he is tapping into the aesthetic value component of equity?

Axiom number one is to design a style of home that already has a proven track record for appealing to the widest market segment. In this country that style is unmistakably traditional. Does that mean that other styles can't find enhanced aesthetic value? Of course not, but the risk increases when we experiment with designs that have a limited track record. What we are going for here is aesthetic value defined as "beauty". Simply put, a beautiful house has more value than a not so beautiful house. There are many styles of houses that might be described as beautiful, but remember, we're talking about hedging our bets on an investment. If our investment is enhanced by perceived beauty, and beauty is in the eye of the beholder, we want the largest number of beholders possible who will perceive our house as having enhanced aesthetic value and that group by far is in the traditional camp.

Now, we all know that what is described as "traditional" crosses a very wide spectrum, as evidenced by the many so called "colonials" made of vinyl and plastic and off the rack building products, that populate the vast lower end of the spectrum, and there is little room for equity enhancement in these homes. Which brings us to axiom number two; differentiate your home from the masses of traditional houses by adhering to rigid design principles of historic architecture that are based on classic design formulas developed over many centuries by architects and builders whose homes are revered for their enduring  beauty . This requires a discipline and expertise most designers and builders are not capable of, but is what we do here at Connor Homes. Does this mean that a new home has to be a museum copy to successfully capture the aesthetic equity component we are looking for? Of course not. The secret to successfully designing and building a home for today's traditional home market lies in creating a modern floor plan that is in synch with a modern family lifestyle, while using traditional architectural principles that draw from the many historic styles that have a common architectural ancestry whose principles were first developed thousands of years ago by Greek and Roman architects. By adhering to this approach, we can be assured of tapping into the time honored building precepts that continue to define architectural "beauty".

Axiom number three is to use building materials for both the structure and the surface detailing that will allow the beauty of the home to last for generations, not decades (as is the case for most homes built today) because lasting beauty has lasting value. Interestingly, this means that most of the so-called maintenance free products sold for new homes should be avoided because their life cycle is woefully short to add lasting value. The same is true for the many engineered lumber products manufactured for structural use in homes. This means that homes for the most part should be built of natural materials like wood and stone. But what about the maintenance cost of natural materials, you ask? The truth is most "maintenance free" building materials don't live up to their promise as money savers as their short life cycle requires replacement, not maintenance, and when the cost of replacement is factored in, they are a poor value compared to natural materials. But more importantly, in the equation for aesthetic equity gain, natural materials will far outpace the pretenders every time.

Doesn't it cost more to build with natural materials in the first place? Yes, it does, but that cost can be offset by the savings to be had in the off site manufacturing that we do here at Connor Homes, both in the framing and the architectural details. Our company is so well versed in traditional design and in the execution of the architectural details associated with traditional design that we add significant equity value right up front. Some of this savings is transferred to the cost of better quality building materials and architectural details, but overall equity gain is greatly enhanced, as evidenced by our many customers who report that the appraised value of their completed home far surpasses the cost they have into it.

The fourth and final axiom for increased equity gain is to design a home whose layout allows the best and most enjoyable use of the home in the least possible size. While square footage is a measure of a homes size value, it is not a measure of its livability. A home with charming and easy-flow livability accomplished with reduced square footage is a sure-bet enhancer of equity value. Size is almost always the biggest driver of cost and so reducing the size offers a significant opportunity to increase equity value provided the buyer's perception of livability is not compromised. A homebuyer walking through a well laid out 2500 Square foot house compared to walking through a poorly laid out 3000 square foot house will quickly forget the additional square footage in favor of livability.

The opportunity to access this aesthetic value equity gain is really only available to the first owner of a new home, whether that owner be the developer, builder or homeowner. As was pointed out earlier, the materials and labor costs are a fixed value, but the creative genius responsible for the investment in beauty is the beneficiary of the resulting gain. This unique opportunity is a compelling argument for building a new home rather than buying one. Once the value of created beauty becomes a portion of the selling price, that value is forever carried from seller to seller. Being the first in that line of sellers is a select position to be in. 

There are many reasons to build a new home, not the least of which is to surround ourselves and our families in a safe and beautiful living environment. But it also makes good practical sense to build a home that is best able to increase our net equity in our investment. When it is possible to realize both goals simultaneously, that is truly a winning formula.

Michael C Connor

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