Welcome And What He Builds

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I'm Nate Hutchings with Composition Homes, and we build new homes kind of in the Vienna area, but Northern Virginia, and they're tear downs, and so we'll buy an existing home or have our clients have an existing home, tear it down, build new. We also do some remodels or additions if it's the right fit, but mostly focus on designing and building new homes. Awesome. And could you share your journey into the home design and building industry, and what inspired you to found Composition Homes? Yeah. Uh, a lot of builders I know kind of just fall into it. For me, it's, it's it's in the blood. I'm third generation home builder and my dad built homes in, custom homes in California and had his own company, and so I grew up with him building homes. Started on the end of a broom and swore that I would never get into it when I was little. But as I built more with him really learned to love

Growing Up In A Builder Family

1:22

it, and then he actually took a job teaching construction management at BYU, and so I went through that program, and so my studies were how to build, and always with the view of building and, and hopefully one day having my own company. Um, and then so having a dad as a professor, right, as you can imagine, you kind of have a little bit of inside information about the industry, 'cause he had done it, and then he was teaching and had a lot of students that have gone out and built and knew a lot of people. And so I just started kind of observing, uh, as a teenager thinking, "Okay, what do I wanna do? What kind of things would I like to do?" And then as I got into school, I, I, kind of researched it more. I always planned on doing at least an MBA and then You know, going into construction and building. And then, uh, when I was in college about halfway through, I thought, "Oh, I wonder about a law degree as well." And my dad was teaching a construction law class, and so he said, "Okay, here, come take my class and see how you like it." And he said that'd be a great combination graduate degrees to be able to then prepare to run your own company someday. So that's what I ended up doing, went to Indiana University and did a JD/MBA there. And, uh, and then a long and winding career path a little bit that led me to, to Northern Virginia, practiced law for a few years, developed property for a couple years and then came out here to Northern Virginia in 2013, and I'm been building homes since, and started my own company, Composition Homes, about almost four years ago now. Uh, it was just time to do it on my own and see what I could do. Awesome. And then coming from, uh, like a background in construction management and being a third generation, would you say that you had a good support system? Yes. Yeah, a- absolutely. It's a good support system. There's also, you know, I kind of-- my wife jokes how my dad kind of lives through me vicariously, right? Like, 'cause he went back and taught instead of building. But yeah, he's always been very supportive. I've got a, a, a brother who also did construction management, and he, he does big commercial construction out west. And so yeah, it's, it's something that we talk about. My wife jokes about how when the Hutchings men are together, it's always about, "Oh, how, how did that building get built? And how did that get designed? And I wonder, wonder what the engineering is like on that." So yeah, they're common, uh, common conversations around the dinner table about building and how things are built. Yeah. Yeah. And you have a pretty interesting path starting in construction man- construction management and then a JD and MBA, then practicing law before starting your own business. How did all of those experiences help you build your business? Yeah, that's a great question. So when I, The, the plan was to do the JD/MBA and then practice law for a few years, and then, and then use that as a kind of jumping off point to get back into the business side. And I finished grad school in 2009. Um, so for those old enough to remember 2009, that was the bottom of the real estate market. And so I had clerked with a big law firm and was planning on working with a big law firm clerked with them one summer. And then they ended up making offers to only half of the summer associates, which was really

The 2009 Crash And Courtroom Reality

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common my year. S- Never happened prior to that. If you had a summer associate gig, you were gonna get an offer. And I said, "I'm gonna work with your real estate practice group, or I'm gonna go somewhere else." And that was the death knell. Unbeknownst to me at the time when I, when I said it to them and literally nobody was hiring real estate. The, the, their li- uh, the real estate practice groups and law firms, they were getting reassigned to other practice groups or getting fired. Real estate developers were... Th- they... Nobody was doing any deals. And so I ended up going to work. My uncles had bought a couple hundred acres in southern Idaho, just north of the Utah border in Cache Valley. And, um- They had developed that. The timing couldn't have been worse for like so many developers back then. They started in 2006, and then in 2008 everything crashed, and so they were doing a restructure of debt deal with the bank, and the bank w- wanted somebody else to come in and manage it. And so my background with construction undergrad and that, that background, and then a law degree and an MBA. Um, they also had a half-million-dollar mechanics lien on the property that they knew they were going to fight in court if they could, and so they got a really cheap lawyer out of me. Um, probably cheap multiple meanings there since I was right out of school. But I actually one of my dad's cousins was an investor on the project, and he was an attorney as well, and so he and I saw this lawsuit from start to finish, um, over the course of the two years that I was there. And that was just not planned. I never wanted to litigate, but seeing that, uh, lawsuit from start to finish was maybe surprisingly the one of the best things that could've happened, and also 'cause it was my family's business- Mm-hmm and just saw the stress that they went through going through that, and it turned out favorably for us. But seeing that from start to finish really kinda set the tone to say, "Okay" Yes, you're an attorney. Yes, you can take care of this, but this is not something that you ever wanna be a part of. There better be- Yeah a lot of zeros on the end of the numbers that you're dealing with to, to even go to court because it's just such a stressful, difficult... it's, I mean, it's called a trial. Exactly. And it's not just the trial in the courtroom, it's a trial for the people- Right going through it, right? And so that experience of seeing a lawsuit from start to finish was really formative for my career. And then from there I l- was there for a couple years, and then I left there and practiced law back in Indiana for a couple years with a small law firm doing outside general counsel and some real estate transactional things. And saw a little bit of litigation there as well. I thought the real estate transaction portion of the practice was going to kinda be more beneficial for the long term. But when you're building we're acquiring single lots, tearing homes down, building new, and you're just using regular contracts that the, you know, the realtor forms. And so the real estate deals, yes, they were beneficial, but more beneficial, which was unintentional, was the outside general counsel portion of that practice because we were reviewing contracts, setting up LLCs and corporations, understanding the tax implications of things like that. Really the structure of a business, of any business not just a construction company, but any business of how to set up the company properly, how to make- Mm-hmm sure, you know, making sure you have the right insurances understanding how to review contracts and what to look at. And it was interesting, right? In practice of law, you have kind of the transactional side where you're getting things going, and then you have the litigation side where something has hit the fan and- Mm-hmm everything's falling apart and everybody's fighting. So I was able to see kind of both sides of those- Yeah and which really helped shape, as you set up these transactions, how to, you know, what to avoid- um, really so that you can avoid any litigation at all. But I've had a lot of people ask me, like, between the law degree and the MBA, which one is more beneficial for running a business? And surprisingly, I would say the law... Maybe surprisingly, maybe not- Mm is the law degree just because so much of that legal practice, those few years that I was practicing law- Mm-hmm just understanding how things go together. The MBA was very helpful as well, don't get me wrong. Understanding economics and accounting and all of those things are, are really important. But that, it was it's funny. I- when I was in school doing a JD-MBA, I would... and even out of school, I would talk to some people and tell them what I did, and some people would kinda scratch their head and say, "Construction management, law degree, MBA? Like, what? How does-" How does this connect? How does this connect, right? And then and then others would say oh yeah, I, I see it. I see it." You know what you're doing. "This, this will be a really... Yeah, this will be a really great combination." And then as I've run my own company, it, it certainly has. I don't have to worry about calling an attorney to get things set up. Right. I've done it before, you know, dozens or hundreds of times- Yeah and know how to do it. And so it's nice to not- feel like you have to rely on other people or that- things are missing, right? Which- Yeah it's always a fear as a business owner that what did I miss? Yeah. But since I've had done it for other people in the practice of law, it made it a lot easier to jump in and do it myself. Yeah. You have that solid foundation. Yep. And starting your career in a period of that uncertainty in the housing market, what were some, some of the most valuable lessons that you carried forward from that experience? Yeah. That's also a great question. So I- when I finished my undergrad, before I went back to school, I, I worked for some time in between, and that was at the height of the residential construction boom of the mid-2000s when people That was interesting 'cause the companies were all doing really well. They were, they were building and they were selling, but the people buying the homes a lot of times

Setting Up A Business To Avoid Pain

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were spec investors, and then they were then flipping them to other people. Mm-hmm. And, and a lot of builders said, "Oh, this market is great." The lending requirements were really lax, and so people could get stated income loans, which seems kind of crazy now, and that was the downfall of the, the, the mortgage crisis. But seeing how a lot of builders really just went all in and took advantage of it, N-not took advantage of people, but took advantage- Mm-hmm of a, of a good market- Right without understanding that the fundamentals of a good market weren't really there, that if you're selling homes to people and people aren't moving into these homes, that's a bubble that's going to pop, right? And so, it's fun to see that kind of growth and, and, and when you're in the business and things are going well. But for me, what it really taught me was leaving that market to go back to grad school when the market was really good, thinking I'm gonna have a lot of great opportunities coming out of grad school, and then seeing it crash, you know? Mm. And I was in MBA core when Lehman Brothers hit. Like, I remember the day that that happened, and so we're getting this, like, real time analysis- Mm of what's going on with the stock market, why is this happening, in our economics class, in our accounting classes, finance classes. Um, that was really fascinating. And so I think what it really taught me was the balance between being risky and being conservative, kind of that you can't just throw all your eggs in one basket- Mm-hmm because there are things beyond your control. Um, so I think that, that's really one of the main things was- Yeah was understanding that the market is maybe is good now, but you've gotta save for some rainy days 'cause it's not always- Yeah gonna be good and just being more conservative, more careful- Yeah about how you do business. Planning ahead. Yeah. Awesome. Yeah. And then was there a particular moment or instance that finally made you decide that you were ready to start your own business? Um, there-- I, I think like a lot of things in life with that, there were a lot of moments. I can't point to one particular, but it was just, I think with a lot of people, as you have kind of major life changes- Mm-hmm things kind of just coalesce and, and you just have a feeling, and that was really what it was. It was just, okay, I've, uh... You know, the company I was working with, I was a part owner of that company. It was a- Mm-hmm wonderful company. Loved the people there, but I... It was I had kind of done the same things. We were building very similar houses, and I just kind of wanted to spread my wings and, and do it you know, kind of unfettered and- Yeah do it with my vision in mind and- Yeah and to really see what I could do. So yeah- Absolutely it was kind of just that feeling. Yeah. Yeah. When you know, you know. Yeah, that's right. And so a lot of people don't fully understand everything that goes into building a custom home. What do you wish more homeowners knew before they started the process? Yeah. This is a fantastic question. I was actually f- I, I didn't know what you were gonna ask me, but this is- one that I thought how would I answer this one?" And so what, the way that I would answer that is when you're building a home, y- when people are watching their home being built, they're seeing the sausage get made, right? Mm-hmm. And when you see the end product, you think, "Oh yeah, this is great,"

What To Expect During Construction

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right? And so clients who decide to build with me usually have seen some of my work, they've talked with other clients, and we try and really set their expectations to say, "We're human. To err is human. There-- mistakes will be made during construction." If, if you have a contractor who tells you, "We're gonna get it right the first time. There won't be any errors," turn and run- because it's, it just, it's impossible. Red flag. Yeah. They're, they're humans. They're s- you know, we've got 50 to 60 different subcontractors, suppliers, vendors on any one project, and they've got multiple sub-subcontractors and, you know, we might communicate the information to our subcontractor, but then that gets passed down three times before- Mm-hmm the guy who's on the job is actually doing it. Yeah. And there are so many moving parts that, that it's complicated. It's, um, you know, if you were a writer and it's like going through all the drafts back and forth with your editor that's what's happening during the building- Mm-hmm process, and mistakes are made. And what I always tell my clients is there will be mistakes, and when we find them, whether we find them or whether you find them, we will always take care of them." But it's a process. It's absolutely a, a process. Mm-hmm. And I've-- So one of the best things I did was f- for my career, is we built our own home a few years ago- And I remember before we built our home talking with clients and saying, you know, "It's, it's a process. Be patient. You're gonna walk in, and you will have told us you want it one way, and you'll go in and it's a different way." Mm-hmm. "Don't freak out. It's okay." And I'd see customers, for lack of a better term, freak out, right? And we would deal with it, and we would calm them down, and we'd always fix it. And then I went through it myself, and I thought, "Okay, I know this is gonna happen. I've seen it happen so many times." And then I'd walk in and-- so I actually speak Spanish. I served a mission in Southern California for our church and learn, and learned Spanish. And so there were times on when we were building our home where I was... 'Cause sometimes they say, "Well, it's a translation error." And I said, I was, I was the one personally on the job site. I had given instructions in Spanish. I'd given written diagrams, and then I came back, and it was not the way that I had said. And I thought, "Okay, there's not a translation issue." This is, we're just human, right? And you have to extend grace for that. But I was surprised at how upset and frustrated and angry I was when we- Mm-hmm were building our own house. And so that was a really great experience for me. Not the not the frustration and anger, right? That's not the great experience. But for being able to really sympathize with my clients. When they go through it, I can say- Mm-hmm "I know how you feel. Here's what I went through. It will be okay," right? And just be that calming voice. But yeah, that-- I, I think, I think that's really the big one with clients is it's multiple-- Again, it's like writing a book. Mm-hmm. You're gonna go through multiple drafts. You're gonna see things that aren't right. It-- We will always get it right in the end- Yeah but it's certainly a process. Awesome. Yeah. And I think that personal exper-experience is something that helps people trust others as well, is when they know that somebody has gone through a similar- Yeah experience, so they know- Yeah that they can make a con- a connection on that. And what is your process for helping a client go from a vague idea of what they want to an actual home design? Yeah. That, that's a great idea. So we do we do design builds, so I will help my clients design the homes. They, they can use an architect, but I'll-- A lot of times I'll be the one that designs it with them. So my typical process is so the, the type of homes that we build are typically a little bit-- They're not uber modern, but they're really clean lines more contemporary aesthetic. Uh,

Turning Vibes Into A Real Design

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and so most of the clients that I get have seen that, and that's kind of what they're drawn to but not all of them. And regardless, everybody has different tastes. So the typical process is I will have my clients, Give me, I'll s- I'll say, you know, "Just look online and find pictures of homes that you like, and send me 5 or 10 different houses that you really like so that I can get a sense of the style." And then I'll talk- Mm-hmm through with them, "Okay, on this home, what is it about this home that you like? And on this home, this is different than this one," and I'll talk through the differences and I'll say, "What is it about this one that you like?" And then it's, uh, it kind of that information gathering process. Sometimes I'll get five pictures and all the houses look very similar and I think, "Okay, this is gonna be easy because you-" it's, you can... You're not copying those other homes, but you know what vibe they're going for and- it just happens. You get others where you get 10 different houses and three of them are completely different styles and you think, "Okay, how am, how am I gonna bring all of this together to- Yeah deliver what they want?" And it's then this iterative process of going back and forth with them, and usually as we design, I joke with clients that, "You hired me to design one home, but sometimes we've designed four houses or five houses for you," and I, and I'll show them the pictures- Uh-huh. of the different elevations, right? And that's okay. That's, that's part of the process. But then there's a back and forth while I'll, I'll kinda get an idea of what their vision is, and then I'll go to the drawing board and I'll, I'll design, and I design in Revit, which is a 3D software, and I've got some rendering software as well, which is really helpful when you're designing a custom home that's only- Mm-hmm gonna get built, gonna get built once. Yeah. Production homes we build over and over. If you do one the first time that you realize you gotta make this hallway wider or this room is too small- Mm-hmm you can change it on the next iteration. When you, you're designing custom homes, you get one shot for it to be right. So the ability to draft in 3D and show them those and be able to, fly them through the home and go through and you can kinda get a sense for the spacing much more than a two-dimensional floor plan or elevation. But then it's this back and forth. I'll present them with a draft, and then we'll talk through it, and they'll say, "I like this. I don't like this," and then it's back to the drawing board, and you do that un- until you get it where they want it, and then we play with different color combinations, different materials. But it's a, a v- very collaborative process- Yeah with the clients to make sure that we're getting what they want. And there are times where I've got clients that I'll design something for them And then they might go and pay a, another architect or designer just I, I've had clients that have paid just to kind of have them look over it, not to design it, but just to say, "What recommendations would you make?" Mm-hmm. And then we can incorporate those or sometimes there are reasons why we didn't, so we'll talk through them. And I'm, you know, th- those... I welcome that because if you get another set of professional eyes on it that works great. But most of the time, I kind of see what they want- Mm-hmm and we design it and show it to them and, and then they say, "Okay, this looks good. Let's go," and then we start building. Yeah. Yeah. And then when your clients receive the keys to their completed home, what do you hope they remember the most about working with you? Uh, yeah, so I, the one thing I hope they don't remember is watching the sausage being made and all the all the, all the things that weren't wrong but then were correct. And, and I've, you know, I've, in my career building in Northern Virginia, I've built for, I think, almost 300 different clients, and so I, I've seen it, and, and it seems like when you're in the midst of it that all they're gonna remember is, is how stressful this is, 'cause it's a stressful process. And then they move in, and then a few months go by, and, and I've, I've joked, m-multiple clients we've talked about how it seems to be like childbirth. Um, I haven't given birth myself, right? But my wife, she's gone through three. We have three wonderful kids, and, um, you forget how bad it was, and then you're willing to do it again. Yeah. And and we've joked that it, it's not a great analogy, but, but I don't know of others that are, that are like that. And so, once you get into the completed home, then you're able to... 'Cause as you're building it, you're looking for what's wrong, what needs to get fixed. Mm-hmm. You're, you're looking for the things that are wrong with it. But then once we deliver the keys and they move in, then they get to enjoy it. Yeah. And then they, they tend to remember the good things and- and not the bad things. And so I think that's it's really w-with architecture, I think with good architecture, good design, there's a feeling to it that a lot of people can't articulate, but when you go into a house with good design, beautiful design that flows and everything- Mm-hmm flows together, there's a feeling that's there. And again, I th- you know, I guess feeling-- I, I didn't mean for this, but feeling has kind of come up a few times but that's, you're really going for that, emotional reaction. And not, not a- Mm-hmm it hits you all at once, and they break down in tears, right? But- Yeah that they feel, "Yes, this is ours. This is the vision that we wanted." It's our home. And they can just really love, love living in it. Yeah. Yeah. And for people that are waiting for interest rates or construction costs to come down before building a home, um, what would you say to those people who are on the fence about whether or not right now is the right time to build? Yeah, that, that's the million dollar or two or $3 million question literally sometimes. That's the tricky part about today's economy with so many people who are on the sidelines waiting to build because interest rates are higher, and they don't wanna give up their, you know, so many people have two and a half or under 3%

Rates Versus Costs And Smart Timing

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mortgages, um, and it's really hard to trade that and trade up to a 5, 6% mortgage. The most, most of the, the clientele for the, you know, expensive luxury homes kind of that, that we're building, the interest rates matter because it's a monthly payment. But they're my clients can usually af- afford, afford it. It's just a question of when they want to do it. So the-- I think what I would say is construction costs and lot acquisition costs, at least in the 13 or 14 years that I've been in this market, have gone up every year fairly significantly. I've had a lot of clients who've said, "Oh, we'll just wait until the prices come down." And I laugh, not at them, but kind of inside think, "Yeah, g- good luck with that." Yeah. And so for a lot of people who have the money, I mean, eventually interest rates kind of have to come down. It's b- out of our control, right? But they kind of have to come down, and so if you're looking to build yes, interest rates will come down, but costs will be higher in six months, in a year, in two years. And so, everybody's got to make their own decision. Mm-hmm. But costs are going to be lower now, and if everything continues on the trends that they have been with property values continuing to appreciate, even if you build now, your interest rates are gonna, you know, your monthly payments are gonna be a little bit higher. But as soon as rates come down, you refinance, and then you're locked in at the lower price- where it's not gonna cost more. 'Cause as interest rates come down, that also usually the lot prices go up 'cause, again, people are looking at monthly payments. So there's, uh, people say, "When's the best time to buy?" Usually, it was 10 years ago, six months ago, today, and then as, as soon as you can- Mm-hmm if you're looking at just the cost of the asset. Interest rate, you know, with monthly payments, it's, it's tricky, but yeah, that, that's a that's, that's a hard one. Yeah. If I had a great answer, we'd have more people building right now. Is there any design trends or products that you're most excited about right now? So the one that we've used a lot in our homes recently, um, are European windows. They're tilt-and-turn windows. Um, you don't see them in the United States very much, but they'll-- So they open inside like a door. Mm-hmm. And we're doing windows, a lot of them that go down to the floor, letting a lot of light in. Mm-hmm. And so you will have windows that will open like a door, and then they can close, and then you can put the handle the other way, and they'll tilt to get air ventilation.

European Windows And Lighting That Pops

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And those, as people have come through our homes, that tends to be the one thing that people kind of... Not the one thing, but one of the things that people kind of ooh and ahh about. W- well, the one for me that, that has t- that products have kind of made the most strides in the last decade have been light fixtures with what they're able to do with, with LED now, where they can integrate the lighting into the fixture rather than having a fixture- Mm where you have to screw a bulb into it. Mm-hmm. They, especially with, with more contemporary light fixtures, they have just some really cool things that you can do with lighting. My designer talks about light fixtures as the, as the jewelry of the home where you can really add some bling and- Right and they make some really great things. And then the way that we can integrate lighting now into shower niches, um- Mm-hmm into cabinets, into shelves, things like that. The cost for that has come down a lot as LED lights have, you know, the, the cost for those have continued to come down. And so a- accent lighting, strangely it, it might sound like, oh, that's a little bit cheesy. But again, going back to the f- the feeling of homes- Right what you can, what you can evoke- Yeah. It adds another layer that type of accent lighting- Yeah can really make a, a big difference. Yeah, make things stand out, not just feel like, any other house that any- anybody's got. Yeah. And then for anyone considering building a custom home or learning more about Composition Homes, where can they connect with you? Yeah. So, uh, we've-- Our website, compositionhomes.com, is probably the, the best place. Our phone number and email addresses are there. I've kind of always been anti-social media, but just recently, finally, that's how we connected, right? Yeah. I finally started an, an Instagram account, and so we've got some more content that's coming out there as well. But yeah, e- email or, or phone call. Uh, we're a small company, so if you, if you call, you're gonna get to me pretty quickly.

Where To Find Composition Homes

25:28

Awesome. Thank you so much, Nate, for joining me on the podcast and sharing your knowledge, passion, and inspiring story with us. I wish you the very best in all that comes your way in the future. Great. Thank you for having me, Jenna.