Destiny in Dalton's Hands

THAT RICK DALTON wants to run his own home building company is hardly a surprise. Dalton's daddy and grand-daddy were contractors, and he's been in the business for more than 25 years.

Most recently, he was a division president for Taylor Morrison, and before that, he'd spent a number of years with Pulte Homes in both Northeast Florida and Chicago.

Of his decision to leave Taylor Morrison to form Wellington Homes, he says, “Our destiny is more in our hands. We had a better shot of making it through this downturn on our own.”

Dalton's vision for his company is a modest one to start. He and partner Dale Dubberly are not only the heart and soul, but also the only employees of the company. They've got 13 lots locked up in a 500-unit community and three homes under contract as of the beginning of August. And they're open to supplementing any production building with custom homes, on-your-lot deals, and remodeling projects in the name of cash flow.

“Our magic number is three for this year,” Dalton explains. “If we close 10 next year, we'll be in good shape and grow aggressively from there.”

Besides throwing in his own money, Dalton's financing is mostly a grass-roots effort. A local private investor who Dalton says “believes in the community” is providing most of the company's seed money and even some of the cost of going vertical. Local banks also are playing a big role in the company's launch, as both a source of additional financing and distressed lots.

But getting deals done requires a lot of creativity these days, something that Dalton says his two-man operation is able to do better than bigger companies. Being barebones means being swifter and more flexible.

Case in point is an agreement he structured with a local bank to fund the construction of one of the homes he's got under contract. The move-up buyer had a home to sell but was ready to buy and build a new home. Getting the financing for the construction of said new home was a bit of a problem. Dalton worked with the bank to arrive at this solution: The bank extended the buyer a home equity line of credit to help fund the construction, with the understanding that when the buyer sold his existing home, the line of credit would be repaid.

But this is the kind of wheeling and dealing that needs to happen to get a fledgling company in flight. And it comes with a very palpable sense of risk; everything—dreams, reputation, money—is on the line. “I think anyone would be lying or naïve to say that they're not nervous,” Dalton says. —Sarah Yaussi