By Elizabeth SanFilippo
Ken Neumann needed to reinvent himself – after starting Neumann Homes in 1992, which built over 12,000 new homes in Illinois, Colorado, Michigan and Wisconsin, the company filed for bankruptcy in 2007 (although the company still builds homes, many in the Detroit area).
In October 2008, when he started Greenscape Ventures, he asked how his company could compete in the resale market. His answer? Build affordable housing initially using foreclosed homes and then by developing spot lots. Plus, “We use high-efficiency everything,” Neumann said.
Neumann is also focused on always being honest, no matter the state of the home. That’s why after working with distressed homes for three years – homes that had a lot of problems – Greenscape decided to switch their focus to only spot lots and stand-alone homes. Neumann formed Greenscape Homes in 2010, which builds homes in established areas, then puts them on the market when the house is about 30 to 60 days from completion. This way, buyers can be involved in the finishing touches of their new home.
Every month, Greenscape completes about four to five houses, most of which are listed between $400,000 and $700,000.
Part of Greenscape’s success is in who the company associates itself with, something important to Neumann. “Surround yourself with passionate people who are successful but not money-driven,” Neumann says. “They won’t fight over money, but what’s right.”
He found that honest, hard-working mentality in Ginny Leamy, a Coldwell Banker agent, whom Neumann initially hired to sell homes. But when the two discussed how to make the business work for all of them, she switched to marketing, and she currently works as a liaison between the community, company and buyers.
Of Neumann’s philosophy, Leamy thinks it’s more than appropriate for today’s market. “His approach is awesome,” she says. “He builds quality products for the savvy buyer.” She’s also impressed with how he keeps costs down while still offering quality homes at an affordable price.
How does Neumann create affordable, quality homes? It starts with the location. Greenscape only builds in already-established communities in the near West suburbs. The company is also focused on using previously-successful floor plans, and it helps that while they’re not production homes, Greenscape produces a few homes every month. In addition, having been in the business for decades, Neumann has all the right contacts and knows how to source great finishes, like granite countertops, at reasonable prices.
Neumann believes affordable housing works well now for a few reasons, not least of which is the combination of low interest rates and deflated home prices; buyers can get more while still paying less. Neumann thinks it’s unprecedented, and it’s likely to continue, he says, because he believes the interest rates will continue to stay low.
As long as Neumann continues to create amazing value for buyers and stays focused on what buyers are looking for, it bodes well for future affordable housing.