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Designs, sells and builds single family homes in various locations within the United States. Designs homes at various price points to appeal to homebuyers across various demographic segments.
II have both objective reasons and personal experience as too why this builder may be in trouble. First, why haven't they produced a financial statement since July. Apparently they have until May 15th, are they just waiting til the last minute like we all did in college, maybe pull an all nighter on the 14th. Come on, clearly they are waiting till the last minute to tell the street that they are making no sales, their land is worth five cents on the dollar and have no hope of making payments on their mountain of debt. Or maybe they are too busy helping the FBI probe their mortgage business. What are the chances their mortgage division is clean? Not great in my mind. Secondly, these guys were still grading lots on a large subdivision last summer in the town where I live. This would not be alarming if it was not one of the top five highest foreclosure markets in the country. Houses had stopped selling about a year before, every national builder was here, all with huge subdivision of lots sitting vacant, and there they were grading more. Smart Thinkng.Thirdly, my company did some business with them this winter. Getting paid was worse than pulling teeth. We had to call continuously, first the PM took 6 weeks to find the bills, we had to refax them many times. Then they kept losing the lien releases. Then they sent us a check UNSIGNED. That is the biggest rookie/cash poor small business trick in the book. I could not believe that one. They apologized and made us fedex it back with a return express mail envelope. Then they questioned our releases again, had to refax, then finally, after a 2nd day letter got to us in 7 days, we got the check. Over 90 days late. As of this writing the check appears to have cleared, but it has only been 5 days. We are in the worst housing market ever coming off the biggest bubble ever and not one of these major builders has gone bankrupt yet. How is that possible? My money is on the company that is not reporting its results, Beazer!!!! To be the first.
Could not have said it all better myself. BZH rode the wave, like everyone else did, based on FALSE reporting. This old dog will soon be part of the Dead Pool.
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