How We Invest
Our Focus and Process
Whilst we have worked in many areas of residential real estate, our biggest focus is the building and selling of mid- to upper-market homes. We pride ourselves on outstanding design and quality and like to move quickly, so that market is our current sweet spot. We mitigate risk by investing in a variety of sub-markets. Right now, for example, we are building homes that will sell for $500k to $2.4m across 3 distinct areas of Austin and the separate city of Temple (an hour north of the Texas capital).
We run very detailed due diligence systems when new lots are brought our way by our trusted team. We also conduct market comparisons using the MLS (Multiple Listings Service) system and a plethora of local market data, erring on the side of caution with our forecasts. Only when even a pessimistic outcome would still yield a profit do we make a purchase - we are intentionally very picky! Then we purchase, design, build and sell beautiful spec homes, to a high standard, and ever faster (we’re working on an in-house project named “record breaking speed”).
The Opportunity - Austin, Texas
Population growth: Texas gained nearly 1.6 million people between 2020 and early 2023, becoming only the second state to surpass a population of 30 million. A notable influx comes from California, contributing around 53,000 households or 102,000 people. Austin's growth in this period was approximately 8% (Texas Demographic Center, Axios, & Texas Tribune Nov 20th 2023).
Housing shortage: Austin's housing shortage, caused by its evolution into a tech hub and a population surge during the pandemic (The Texas Tribune Nov 20th 2023), will be exacerbated in the years ahead due to a reduction in construction. The City of Austin's Open Data portal reveals that, as of November 2023, residential new construction permit applications in Austin have reached their lowest level since 2011.
Austin's population: The Site Selection Group (June 15th 2023) projects Austin's population to surpass 2.7 million by 2028, with a 13.55% growth rate, the highest among U.S. metro areas.
The effect: Austin's rapid population increase, driven by migration from states like California, Florida and New York, and compounded by a housing shortage and reduced construction activity, poses significant challenges. The forecast as the fastest-growing U.S. metro from 2023 to 2028 underscores the urgency of addressing these issues.
At Brownstone we design and build beautiful, healthier and affordable homes, especially for those attracted by lower taxes, reduced home costs, a supportive business climate, and superior infrastructure.
Brownstone Experience
Since 2014, Brownstone, its affiliates and its team have acquired, developed, and disposed of over 150 single family homes and over 100 doors of multi-family property for a gross sales value of approximately $70m. This has been a blend of rentals, fix-and-flips and new construction, across the US, plus some in the UK. The data on the following page shows this info for Brownstone and affiliates. In addition, there are currently 15 homes either on the market or currently in design or construction phases, concentrated in Central Texas.
Our Partners
Environmental, Social and Governance
We've had Environmental, Social & Governance principles at our core, long before we were aware of the ESG acronym. Our homes all adhere to environmental standards as well as including a variety of health and eco enhancements. Examples are learning thermostats, efficient watering systems, electric vehicle charger wiring, enhanced windows and doors, healthy insulation and more.
We also plant trees to replace those removed during lot clearing. This is along with strict policies regarding equality and humanity, a Results Oriented Work Environment, a significant focus on health (of our team, colleagues and buyers), and the development of a model for giving a percentage of annual profits to charitable causes.
We like to do good and treat people well because we feel it is the right thing to do, so we unashamedly feel good about our actions.