The FORT Podcast: Phillip Huffines – Co-Founder @ Huffines Communities – The Art Of Building Award-Winning Master Planned Communities
Continuing a practice of three generations of business and community work in the Dallas area, Phillip and his twin brother, Co-Owner Donald, have developed their Land Development and Land Investing legacy by creating superior master-planned communities and multifamily community living styles. The firm has developed over 15,000 single-family homesites, and 2,800 multifamily units in the DFW metroplex, and invested in thousands of acres of land. The Huffines name has become widely esteemed within the industry and the State of Texas. Huffines Communities has assembled over 100 limited partnerships, created hundreds of jobs in North Texas, and generated billions in asset values. In 2021 alone, Huffines Communities invested over $120 MM in land.
On this episode, Chris and Phillip discuss:
– How Huffines creates incredible Master Plan communities
– City/state incentives
– Design, architecture, and amenity strategies after 30 years of building communities
Listen on:
Spotify
Apple Podcasts
YouTube
Topics
(00:00:00) – Intro
(00:04:10) – Getting kicked out of military school
(00:08:47) – Master Plan communities
(00:16:00) – Phillip’s secret sauce
(00:20:11) – Finding a site for a community
(00:24:24) – State and city incentives
(00:29:47) – Establishing school districts
(00:34:03) – Experiences during the GFC
(00:36:28) – Entitlements
(00:39:50) – Entrance design & amenities
(00:43:13) – Community events
(00:45:51) – Planning
(00:53:52) – Thoughts on the market
(00:57:20) – Home builders and the DFW market
(01:02:19) – Nearly going bankrupt in the 80’s
(01:07:53) – Does anything concern you in the macro right now?
(01:11:10) – The importance of profit
Episode Summary
Huffines detailed his early life, where he and his brother started a fireworks business at 17, learning valuable lessons about regulations and land use. The profits from this venture enabled them to purchase their first rental property in Austin, marking their entry into real estate.
Phillip explained the distinction between subdivisions and master-planned communities. While subdivisions involve basic horizontal infrastructure, master-planned communities offer a broader range of amenities such as swimming pools, golf courses, and active homeowners’ associations (HOAs). These communities are designed to foster a strong social fabric, with numerous activities and events to engage residents. The Huffines’ approach to HOAs emphasizes creating value through social activities and well-maintained properties.
The conversation also touched on the significance of public-private partnerships in their projects. Huffines highlighted the use of various incentives, including municipal utility districts (MUDs), which allow developers to finance infrastructure through the sale of bonds. These partnerships have been crucial in overcoming financial challenges and ensuring the success of their developments.
Phillip elaborated on the process of acquiring land, which often involves off-market deals and long-term negotiations with landowners. The importance of due diligence in assessing the potential of a property was emphasized, including factors such as floodplain status, infrastructure, and school district quality. Huffines noted that while the process can take years, their strategic approach has enabled them to secure prime locations for their communities.
The discussion then shifted to the evolving real estate market. Huffines observed that rising costs and changing dynamics have impacted the demand for different types of housing. This has led to a greater focus on single-family homes, particularly those catering to first-time and second-time buyers.
Reflecting on past economic downturns, Huffines shared lessons learned from the 1980s banking crisis and the 2008 financial collapse. He emphasized the importance of avoiding personal guarantees and maintaining some assets free and clear to mitigate risks. This cautious approach has helped them navigate challenging economic periods and sustain their business.
In terms of current market conditions, Huffines described the DFW area as one of the best markets in the United States for real estate. Despite high-interest rates, there is a strong demand for housing, driven by a shortage of existing homes and a growing population. He highlighted the strategic advantage of selling lots to builders who can finance development upfront, reducing the capital burden on developers.
Throughout the podcast, Huffines stressed the importance of creativity, strategic planning, and maintaining high standards in their developments. By focusing on creating value and fostering strong community ties, the Huffines brothers have established themselves as leaders in the real estate industry, particularly in the development of master-planned communities. Their commitment to quality and innovative approaches has set a benchmark for others in the field.
The FORT is produced by Johnny Podcasts