Chris Edwards – Monterey Construction
Many construction companies may call themselves custom home builders, but in Chris Edwards’ experience, oftentimes they are only offering customers a choice among pre-selected homes.
“It’s what I call a ‘modified tract home,’ and they basically show you their product line of maybe a handful of floor plans and a few designs, and that’s it,” he says.
For Edwards and his wife, Mimi, this took away from the excitement of building a client’s dream home. So when the pair founded Monterey Construction, a custom home construction company based in Norman, Oklahoma, in 2012, they decided to focus on offering custom construction service rather than a particular pre-defined product.
“From the beginning, we have tried to operate more as a consultant, rather than just a construction company,” he says. “We know that it’s your dream, your house and your future, and that you’re hiring us to create that.”
In five short years, this approach helped Monterey Construction build custom homes across the Norman and Oklahoma City metro area. In 2017, the company was recognized as the third fastest growing private business by the Oklahoma City Chamber of Commerce and by Inc. Magazine as one of the fastest growing companies in America.
No boom means no bust in Oklahoma
Before starting his custom home construction business, Edwards worked as an aerospace engineer in Oklahoma City, but says he was always fascinated by the real estate industry. So in 2011, Edwards and his wife, Mimi, began flipping houses in central Oklahoma, and so began their education in Sooner State real estate.
“Oklahoma is a very unique market because there aren’t huge ups and downs like they have on the coasts,” he says.
This turned out to be both a blessing and a curse because while the rest of the country was still recovering from the Great Recession of 2008, Oklahoma’s housing market was still relatively stable. However, Edwards soon found out that this also made it nearly impossible to make a “killing” on a single flip.
“It was a challenge to work through this recovery mode, but we learned to be very disciplined with the economics of our projects, as well as very strategic,” he says.
During this time, Edwards also began cultivating relationships with other builders in his area, even partnering with developers to assist with large residential construction developments. One of his first home builds, a custom home just outside Oklahoma City, was appraised for $100,000 more at completion than what the client spent to build it.
What’s more, the owner of the home, “told us it was the fourth custom home they had built, and it was by far their best experience,” Edwards says.
In 2012, Edwards left the world of engineering behind to start Monterey Construction. Even though he wasn’t designing aircraft anymore, Edwards found his background gave him an edge in the real estate game.
“I’m a numbers guy, and I’m comfortable questioning why things were being done in a certain way,” he says. “It was very apparent that the status quo in construction was characterized by a tremendous amount of waste where the customer is expected to pick up the tab. I wanted to reverse engineer the real estate and construction process, borrowing practices that I saw worked, but also exploring fresh ideas and opportunities for improvement.”
A scientific eye for finance
He began with reimagining the contract and financing process.
Normally, clients have two options to pay for their dream home: a firm fixed price, where the customer pays a flat fee for the entire home and build, or a cost plus model, where the customer pays the builder 18 to 20 percent commission on every line item.
While this is the way it has always been done, Edwards wasn’t satisfied with either approach. On the one hand, the firm fixed price method incentivizes the builder to cut corners so they leave with a bigger payout; while the cost plus model sets up a framework where it is in the builder’s best interest to push expensive and often unnecessary “upgrades.”
“There is no one size fits all in this business, and we wanted a model that gave customers the ability to pick and choose how they spend their money,” he says.
In the end, Edwards developed a hybrid of the two approaches in the form of a cost-plus, flat fee model, where Monterey Construction’s fee is fixed based on the size of the project, eliminating costly change order and upgrade fees.
“I always tease customers that they can come to us after seeing a life changing episode of Joanna Gaines’ [Fixer Upper] with new ideas for their home, and no matter what, our fee doesn’t change,” he says. “It really allows them to be more empowered to truly control the destiny of their project.”
On top of the cost plus flat fee model, Monterey Construction also uses segregated accounting methods—meaning the finances of each client are kept separate, as opposed to being lumped together with the finances of other clients as is typically done in the construction industry. The company also uses an app-based platform which gives clients real-time updates on their project and allows them to track their finances.
Edwards says this transparency has been essential to his company growing 800 percent between 2014 and 2016, and exceeding that rate of growth from 2015 to 2017.
“But looking back, those numbers are also a testament to our phenomenal team,” Edwards says. “I always tell people I think we build the best houses on the market, but I know we have the best team in Oklahoma.”
Showcase your feature on your website with a custom “As Featured in Blueprint” badge that links directly to your article!
Copy and paste this script into your page coding (ideally right before the closing