Growing Pains Still, Morris knows the company can make improvements to its building process. For one thing, he would like to do a better job scheduling jobs so that resources are more evenly distributed. “I think we can improve communication among CAP, the subcontractors, and ourselves,” says Michael Rogers, the general manger of Bostic Construction. “We have a tendency to pile our resources on four or five jobs and leave the others without their fair share.”
Challenges extend past construction and into finance. For instance, the company is beginning to outgrow some of its initial banking sources. From the beginning, Bostic Construction has worked with small local banks, like CCB. But as the company grows, it needs larger lines of credit than these individual financiers can provide. To solve this problem, Bostic Construction is trying to establish relationships with bigger banks – the company currently does some business with Regions Bank, Key Bank, other large Southeastern institutions.
“Smaller banks have challenges with funding capabilities,” says Jen Stephens, CFO for Bostic Construction. “We have tapped out a lot of these sources. Trying to build relationships with larger banks and bigger investors can be quite a challenge to get them to understand our product and how we work.”
The company also courts smaller, private investors as it partners. Many are former athletes or businessmen with connections. The company hasn’t needed to go to mezzanine-level capital sources because many of these people, such as Brown, have deep resources and longstanding relationships with the company. Brown, who started following Jeff’s and Joe’s careers while they were on Clemson University’s football team, actually started out as a vendor 10 years ago before deciding to invest three years ago.
Along with his father-in-law and two brothers-in-law, Brown has invested in eight properties under the name Hennan Brown Properties LLC, and feels like the group’s money was well spent, even in a shaky multifamily market. “We won’t go into business with just anybody,” he says. “We need a high level of trust and great communication, and Bostic Construction gives us that. We are sold on Mel Morris and Bostic Construction because they do what they say they can.”
It’s exactly this kind of reputation that has helped Bostic Construction grow so dramatically during the past five years. Combine this with its vertical integration and unique building process, and you have a company that poised to continue expanding. “The last four years have been our foundation,” Morris says. “The foundation has been built. If we keep going at this pace, there are only a couple of other builders in the country ahead of us. It puts us in a very select group.”
