Today we’d like to introduce you to Arpan Gupta.
Arpan, please share your story with us. How did you get to where you are today?
My path has been unconventional, not only due to my effectively completely changing careers from medicine to construction, but also due to my ability for entrepreneurial risk taking at an age most of my peers most people are looking for stability and consistency. Starting a construction company was my brainchild more than a decade before actually starting Carnegie Homes. I founded Carnegie Homes with two luxury townhomes in 2009, in the midst of one of the largest real estate driven debacles in world history. People all around me questioned my decision to leave my medicine, and the prestige and stability that comes with it, for a completely out of favor, and seemingly risky foray into the world of real estate. I was confident, however, that I was not taking a blind risk but rather, an intelligent, calculated one that would reap huge rewards should I stay the course. By my calculations, 2009, more than ever, was the optimum time for a real estate startup because 1) my costs of labor and materials were at all-time lows, 2) the lack of competition allowed me to learn the business inside and out without the pressures that come from competitors breathing down your neck and 3) my cost of building these homes, and the opportunity cost for the time were low enough to where I felt confident I would not lose my initial investment for taking this risk.
I figured, worst comes to worse, I would return to practicing medicine should my calculated risk backfire. I am happy that I can safely say I will never practice medicine again.
We’re always bombarded by how great it is to pursue your passion, etc. – but we’ve spoken with enough people to know that it’s not always easy. Overall, would you say things have been easy for you?
The biggest challenge I faced has been growing Carnegie Homes over thirty-fold in less than five years. Most builders’ background includes partners that complement one another, one with a degree in architecture, another in construction. Or members who have formed together after climbing the corporate ranks with other builders before merging to build their own company. My completely unconventional background for a homebuilder and relative inexperience compared to others posed quite an obstacle to Carnegie’s initial growth. Managing both the operational expansion and capital growth has proven most challenging.
Although many qualities of being a good physician, also came into play to in building high quality homes, it did not teach me anything about managing people or assessing personnel. I had to develop my own a top down approach to building homes and fast. I hired my first employee in 2012 and my fourteenth only eighteen months later. The first thing I maintained consistent was my demand for quality. I demand quality in construction and the same holds true for personnel. This requirement was my saving grace for growing the company. I never believed there was any shame in asking for help, and I immediately started surrounding myself with experienced, well-versed, and capable people, even if it required above market compensation. When you have good people, with a good work ethic, solving problems becomes much easier. As any need developed, I hired a new person to fill those needs. Initially, people wore multiple hats, but due to the positive and flexible culture I’ve created at Carnegie Homes, they wore those hats with a smile. As more people have been hired, job roles have become more and more defined and we experience few complaints from clients or vendors.
On the capital side, I initially thought managing banker expectations and comfort levels in the down market was challenging, but not nearly as challenging managing the same things growing as rapidly as we needed to meet public demand. The wounds from the recent real estate debacle were still very fresh, and rapid expansion and over-leverage were all too common themes.
Convincing them Arpan Gupta, and Carnegie Homes were the exception was quite a challenge. Since I was the first superintendent, and the first salesperson Carnegie Homes ever had, I had a unique knowledge of all facets of the company at all times. I was further able to alleviate any uncertainty by adopting an open book policy with all the bankers wanting to walk a project or having any concerns. Finally, and most importantly, I implemented a very proactive presale program for our homes. Every development I presented a bank had 50% of the development sold with hefty down payments from buyers before even breaking ground. I was fortunate the demand for our product was so high, and the bankers risk was now next to none. With this formula, I am happy to say, Carnegie Homes is yet to be denied a loan.
So, as you know, we’re impressed with Carnegie Custom Homes – tell our readers more, for example what you’re most proud of as a company and what sets you apart from others.
Since the inception of Carnegie Homes, these opportunities to display leadership have become more frequent. Starting Carnegie Homes in 2009 was not a small task. In a climate where no one was lending to home builders, much less an inexperienced one, I displayed leadership in sharing with bankers my vision for Carnegie Homes. Ultimately, the bankers said they were giving the loan due to their faith in my leadership, because all other signs about the industry led them to believe it was not a good risk at the time. I also displayed leadership in the first homes I built in St. George Place, were larger, architecturally superior, and structurally stronger than the average home in St. George Place. Over the ensuing years, we are had been known as the builder that consistently upgrades the quality and price of the median home in the areas in which we build. A Carnegie Home sells for 11% higher on average than other homes in the same neighborhood. In fact, my comments about this vision are in Wikipedia’s entries about St. George Place.
Now, that Carnegie has 14 employees, age 24 to 62, in addition to hundreds of contractors, I am given even more unique opportunities to lead on a day to day basis. Most recently, I’ve had role in inspiring and motivating employees to help tackle the seemingly insurmountable task of collecting signatures of 75% of the homeowners in, Westmoreland, in an effort to save a centuries old oak tree, and build a historically consistent development instead of a midrises or apartment complex which would maximize profit, but lose all historical and environmental integrity. We even have the support of Mayor Parker who lives in the neighborhood. We have had community meetings, neighborhood BBQs, and inspired many by our vision to have the tree serve as a park and refuge for community members. It’s been rewarding showing my employees through encouragement and motivation, that integrity and hard work in a conscientiousness manner are often rewarded.
So, what’s next? Any big plans?
Over the years, I’ve been asked this question several times, and my answer is surprising to most. As a homebuilder, when I think of my professional aspirations, I do not have any specific objective goals many expect from a homebuilder. I do not aspire to build the largest home in Texas, or the most luxurious and expensive, nor do I wish to complete the greatest number of homes, for that matter. My endpoint for ascertaining my professional success is two-fold: 1) successfully making a lasting impact where we build, and 2) with this success, giving back in a manner that inspires future generations to be confident and to aspire to pursue their dreams.
What I strive for with each and every development is for it to be unique and superior in some way, to the previous one. If I am able to continue to push the envelope and continue to strive for both architectural and structural superiority in all of our developments, I am confident our homes will withstand the tests of time, and Carnegie Homes will leave its mark on the communities in which we build. The more typical measures of homebuilder success will fall into place naturally if we never stray from those two tenets. A recent example of this is our recent opportunity to build a 12000-square foot, 8-million-dollar home in River Oaks, designed by renowned architect, Robert Dame.
Carnegie Homes namesake, Andrew Carnegie, couldn’t have spoken more truth than when he said “Do your duty and a little more and the future will take care of itself.”
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