Business View Magazine interviews representatives of Nalle Custom Homes, as part of our series on best practices in the custom homebuilding sector.
Nalle Custom Homes is synonymous with exceptional home design and construction in Texas. With over 500 gorgeous homes completed in and around the greater Austin area, client satisfaction is the top priority, and they’ve earned a stellar, well-deserved reputation based on just that. Owned and operated by the Nalle brothers, the company came about as the result of important lessons learned while Tilghman Nalle was working for a large production home builder.
“To be successful in the custom home building environment, I knew I needed to build more than four or five homes a year, because I wasn’t going to get the buying power or trade control,” says Tilghman. “I learned that first-hand at the production company, seeing how they leveraged all the work they had to get better deals on things. Working in that sector of the construction industry, I knew I wanted my own custom home company someday. In 2004, that opportunity came. Luckily, my brothers were graduating college and getting into the workforce and I convinced them to partner up with me. Lee came over in ’05; Owen, in ’08; and then Jesse. People ask me why we’re so successful and I tell them, ‘Because I have three brothers who are all smarter than me.’”
Today, Nalle Custom Homes builds an average of 40 homes a year in Austin proper and area neighborhoods, such as Bastrop, Hays and Travis Counties, Rollingwood, West Lake Hills, Tarrytown, Wimberly, Drifting Springs, and Driftwood. Along with the Nalle brothers, 10 full-time employees, including talented Lead Architect, Carl Trominski, Head of Purchasing, Jason Ross, and Head Designer, Matt Widmer, make up the in-house team.
The Nalle brothers each have their own strengths and divvy up the company’s operations accordingly. Owen and Tilghman take care of initial meetings, estimating, and site evaluations on the front end. Owen also oversees the office and finances. Tilghman’s focus is new clients, bids, and plan design. Lee and Jesse focus on managing the construction and workforce, and making sure projects go according to plan. Lee is head of construction and has four superintendents to help manage construction activities, while Jesse has an instinctive feel for the speculative side. About 80 percent of the work is custom contract, but the company still builds six or seven speculative higher-end projects a year, usually on prime real estate the brothers find themselves.
Nalle Custom Homes has great regard for local architectural firms. Tilghman says, “Often, a new client has worked with one of them on a set of plans, and we have the opportunity to build from those. That’s the traditional way to custom build. Then, there is the design/build process where clients have purchased a piece of land and like the idea of architecture, interior design and construction all in one firm. If a client comes in without a plan and wants us to be truly hands-on, they can work with our interior designers in the selection phase, all the way through the architecture and construction team.”
In the Austin market, many companies build either $1 million or $500,000 homes, whereas, Nalle Custom Homes have price points from $500,000, right up to $2.5 million. That versatility gives them a wide customer base.
Leveraging volume to get preferred pricing from tradesmen and vendors is beneficial for all concerned – the company, the vendors, and especially the homeowners, who ultimately benefit from lower home prices and better service. “Due to the fact that we’re the larger custom builder in the Austin area, we can guarantee them a certain amount of work – and they can provide us with a little better price point on their products and services,” says Tilghman. “We prefer to partner with the vendors, rather than switching AC or plumbing companies on every home and trying to get the best bid but lose quality.
“One of the reasons we have a great reputation in town is because we understand that homes are thousands of pieces put together. We’ve never built a home that doesn’t have some sort of small warranty item we need to take care of – having long-term relationships with vested partners helps us warranty those items easily. We keep an open and continuing relationship with our clients after they move in. We take care of them.”
Showpiece kitchens with high-end appliances and custom cabinetry; large master closets; large master baths are on every client’s wish list. And light is the be all and end all. Today’s dream homes encompass soaring ceilings and huge sliding doors that give a ton of natural light. Standard windows have given way to ‘walls of windows’ that bring the inside and outside together.
Nalle Custom Homes also offers the latest in “Green Building” options. The company knows the importance of staying up-to-date on innovative products to please their environmentally-conscious clients. The most popular green feature is spray foam insulation, which they have used in more than a hundred homes and had nothing but positive feedback. They also offer higher efficiency air conditioners, tankless water heaters, hybrid heat pumps, and no VOC (Volatile Organic Compound) products.
“All of those things are more efficient, but they’re also more expensive,” Tilghman admits. “The problem with green building is that the client usually wants to see what the return on investment is on different practices. But a lot of items don’t have true test cases available. So, it’s hard to push geothermal or solar without some sort of good data.”
The temptation for a client to want to overbuild and spend more money than necessary is a common occurrence. “It’s so easy in custom homebuilding to make it bigger and bigger, and add more, more, more… that’s not always what a client really needs,” says Tilghman. “We try to keep value in mind and make sure they are getting the information they want, so when they’re paying a premium, it’s for items they will really appreciate.” Customers are obviously pleased with that personal attention to detail. So much so that Nalle Custom Homes does no advertising, no outside marketing. All their business comes from word-of-mouth. Past clients refer future clients because Nalle has gone above and beyond to give them a positive experience during the build, and ultimately the fantastic custom home they wanted.
As for the future, Tilghman says, “We had an opportunity to easily increase the size of our company, but we want to maintain the same workload and revenues and number of homes we’ve been doing for the last six or seven years. We’re completing 40 homes a year and, in Austin, that’s already 20 or 30 percent above what anybody else can do. At that capacity, the four of us can still be personally involved in every home. We enjoy creating for clients and take a lot of pride in the fact that we can build a top-of-the-line custom home with all the features and services they need. So, I don’t see any really big change… just continue to listen to our clients and make them happy. We’re comfortable where we are.”
AT A GLANCE
WHO: Nalle Custom Homes
WHAT: A custom home builder
WHERE: Austin, Texas