Original article by: BUILDER Online
The Middle Tennessee builder closed on over 1,000 homes and donated over $1 million to local charities last year.
When the COVID-19 pandemic hit in March of last year, Ole South Homes—ranked No. 62 on the 2021 Builder 100—was, like many other builders, “expecting the absolute worst,” according to John Floyd, the company’s founder and owner. For two weeks, Ole South stopped all home starts. Then the builder started again in earnest as it found sales were speeding up, rather than slowing down.
“It was just crazy how busy we got. I mean, we closed 127 homes in July,” Floyd says. “It’s hard to say why. Obviously low rates, but I also think people were moving out of the big cities and looking to the suburbs.”
This burst of demand for new homes, observed in the Nashville area and across the country, led the Murfreesboro, Tennessee-based builder to close more than 1,000 homes in 2020—far more than the 850 they had expected at the start of the year. This includes 996 single-family for-sale closings and 45 new build-to-rent units. Over the same period, on top of existing philanthropic efforts, the company’s charitable foundation donated over $1 million to organizations in need in Middle Tennessee, including the Rutherford County Area Habitat for Humanity and American Red Cross Heart of Tennessee.
From its founding in 1986, Ole South Homes grew quickly from one house sold in its first year to over 100 homes built in 1989. Over the next decade the builder expanded its reach across Middle Tennessee, and in 2004—the biggest year for Ole South before the Great Recession—the builder closed 764 homes.
“Then 2007 hit, and of course we made it through the recession, which was quite the accomplishment, considering the amount of land and dirt and lots we had on our books at the time,” Floyd says. “We did all the things that you had to do, with layoffs. We sold our office building. Just cut, cut, cut, cut, cut to survive. And then we came out of the recession and really have just done extremely well since then.” The company is now the largest privately owned home builder in Tennessee
When the pandemic began, Ole South took all the necessary jobsite and sales precautions to prevent the spread of COVID-19—appointment-only model tours, Zoom meetings, and a two-month pause on warranty work apart from exteriors and emergencies. However, the company office never closed its doors, as every employee has a private office.
Ole South has only 46 employees, and “virtually zero” turnover, according to Floyd. “We haven’t had an employee leave here that wasn’t asked to leave here in over seven years,” he says. With $265 million in sales last year, this equates to over $5 million in profit per employee—and, under Ole South’s profit-sharing program, employees are entitled to 20% of the company’s profit each year.
“When the times are good, their bonuses can be twice their salaries,” Floyd says. “We just have a good group of people, and we love to build homes for the community. But we also are very profitable.”
Given his company’s outsized success this year, especially in a time when many other organizations are struggling, Floyd decided to supplement Ole South’s existing charitable efforts, which range from $200,000 to $1 million each year, with an additional $1 million in charitable benefits for 13 Middle Tennessee charities. Beneficiaries include the Box 55 Association, Boys and Girls Club of Rutherford County, Nashville General Hospital Foundation, and Second Harvest Food Bank.
“During the pandemic, Ole South was able to continue building and selling homes, and we know others were not as fortunate,” Floyd said in a statement to the press. “We chose to give back to the community through many nonprofit organizations that continue to make a vital difference in these uncertain times.”
After the incredibly strong 2020, Floyd does fully expect home closings to fall this year. “[All builders are] scrambling to get roads, pavement, lots on the ground,” he says. “No matter how fast you’re running to try and get that done, the process just gets slower and slower, and it’s just harder and harder to feed the monster. I call it the Pac-Man, he just goes down the street, chewing up lots. So we’re going to have a down year, we’re probably going to do 800 to 850 closings.”
As such, Floyd isn’t willing to take the risk on growing the company—nor does he want to sell it, despite offers he’s received. Instead, he wants to focus on maintaining Ole South as it is.
“Everybody [says] you’re growing or you’re dying; well, I guess I’m dying,” he says with a laugh. “The way I have it organized here, and the great staff I have here, the fun we have doing what we do and the sharing of all the rewards, [if I sold the company] it’d be kind of like getting a divorce. I’m just not ready to do that right now. I love my people, and they love me, and we just want to keep it going.”