HouseRaising, Inc. (HRAI-OTC:BB)
Interview with:
Charles M. Skibo, Director, Chairman and CEO
Business News, Financial News, Stocks, Money & Investment Ideas, CEO Interview
and Information on their
HouseRaisingUSA (HR-USA); HR HomeBuyerDirect (HBD); and HouseRaisingAcademy (HRA) subsidiaries.


Cover Story

CEOCFO Current Issue

Cover Story Archives

Private Equity Review

CEOCFO Interview Index

Future Features

Analyst Interviews

Corporate Financials

Contact & Ordering

This is a printer friendly page!

HouseRaising, utilizing its proprietary/patented software and one-stop shopping system that saves homebuyers 15% or more, is poised for substantial growth in the large design/build custom home market

wpe1.gif (12318 bytes)


HouseRaising, Inc.

4801 E. Independence Blvd.-Suite 201
Charlotte, NC 28212
Phone: 704-532-2121

wpe3.gif (38571 bytes)

Charles M. Skibo
Director, Chairman and CEO

Interview conducted by:
Lynn Fosse, Senior Editor
March 10, 2005

Charles M. Skibo
Director, Chairman and Chief Executive Officer
Mr. Skibo, a venture capitalist and telecommunications/internet industry veteran serves as Chairman and CEO and is responsible for directing the company. He also manages acquisitions and is responsible for all financial related matters. Mr. Skibo was previously CEO of SE&C, a consulting company focused on providing financial assistance and funding of acquisitions for companies in the IP & Telecom related market segments. Prior to SE&C, he was Chairman and CEO of from 1999 to 2001. During his tenure, raised $535 million, built and operated 27 colocation data centers with staffing increasing from 9- to 350 employees. Prior to, Mr. Skibo was President and CEO of US Sprint where he merged U.S. Telecom, GTE Sprint & GTE Telenet to form US Sprint.

Company Profile:
HouseRaising currently owns and manages three (3) wholly-owned subsidiaries: HouseRaisingUSA (HR-USA); HR HomeBuyerDirect (HBD); and HouseRaisingAcademy (HRA). HR-USA operates regional companies that design and build homes for discriminating homebuyers. HR-HBD is an Internet-based company working for homebuyers desiring to act as the builder of their own home. HRA is an Internet-based technology company providing management software and support structure for all HouseRaising activities. Each entity functions as a profit center for HouseRaising, Inc.

CEOCFOinterviews: Mr. Skibo, what attracted you to HouseRaising?
Mr. Skibo: “I am attracted to companies that have big ideas. That is what I have been doing for the last twenty years starting with US Sprint. I was the guy who came into US Sprint and built it up into a large company and frankly, there are some similarities here between the strategy that US Sprint employed and what we are doing at HouseRaising. US Sprint had an underlying strategy to utilize a new technology, fiber optics, to build a big business. Our fiber optics in this company is a proprietary/patented software program that was developed by the founder that takes the 3,400 steps required to build a custom home and put it into six platforms. That meets a serious need for homebuyers that want to build their dream home. That idea and the ability to build a big company is what attracted me to HouseRaising.”

CEOCFOinterviews: How are you taking the founder’s idea and making it work?
Mr. Skibo: “The software is practically complete; we should have that done in February. That would be the period in which we would launch the rollout of our regions. The plan is to rollout twenty-six regions over the next five years. Think of a region like the greater Charlotte area or Columbia, South Carolina. There are thirteen regions in North and South Carolina and those are the first markets that we are going after and then we are going to move to the Mid-Atlantic States, the southeast and southwest. It is important to understand the economic model behind the company; when we build out fifty new homes and fifty renovations in a single region, we produce $27 million of annual revenue and an EBITDA (earnings before interest, taxes, depreciation and amortization) of about four million. Recognizing that we are going to roll out 26 regions over five years, you can see that we can build a sizeable company over that time frame; something in the range of about 300 million dollars by the fifth year of operation in terms of revenue.”

CEOCFOinterviews: How does your software operate and what exactly are you providing to your customers?
Mr. Skibo: “Let’s say that you are a homebuyer; you have bought your lot already and now it is time to build the house. You then come to HouseRaising and what we provide you is a one-stop shopping capability. You can come in and if you don’t have a house plan, you can select from 2000 plans that we have. We provide the engineering drawings behind the architectural plan. While you are there that day, we get you to fill a questionnaire and from that questionnaire, we can give you the price of that house within about one percent. We have a design center that you can access so that you literally within that same day can go into the design center, pick out all the features and products that you want in your house like your cabinets in the kitchen, your windows and flooring and on and on. In addition, we have a construction arm in our company, that if you would like HouseRaising to build your house, we can be your general contractor.  However, if you want to be your own general contractor, then you can be that as well and you can pay a fee to access our software over the internet.  It takes you through the same process of the 3,400 steps or tasks that you have to do to complete a custom house.  Either way, whether HouseRaising is the general contractor to build your house or the homebuyer chooses to be the general contractor, the house is built with the HouseRaising patented software that covers the 3,400 tasks.”

CEOCFOinterviews: How does that compare to the way a consumer might do it now?
Mr. Skibo: “Today, given the market that we compete in, you could contact one or more of the small builders in the marketplace that typically build three to five houses a year and usually don’t have the system that covers the 3,400 tasks. Frequently, these are people that started in a trade, developed some capability over the years but are generally lacking in the financial skills and controls that are really important to a homebuilder. Frequently what happens is the homebuyer contracts with one of these small builders who get in trouble along the way and houses end up costing a whole lot more, or said a different way, they are not able to save money. We typically save a homebuyer about 15% of what he would ordinarily pay if he were dealing with one of these small homebuilders. If he decides to be the general contractor himself, and takes on all those headaches, then he could save 25 or 26%.

There is quite a difference between what we do and what a track builder does. We do not compete with the track builders. The track builders typically buy a track of land or a developer has a track of land and they commit to taking so many lots from the developer. When they get under construction, they will be building 25 or 30 or maybe even 50 houses at a time so they take the risk all along the way in terms of financial risk. At the end of completing those houses, they may or may not have sold them. They will have some financial risk in those houses that they have to hold. We do not take any of those risks. The homebuyer comes to us with the lot and we help him get his financing immediately; both his construction loan and the long-term loan. We have no risk during the period of construction, nor at the end, because at the end he has a permanent loan.  In summary, we have very low costs of operation due to our System C (proprietary/patented software) process and we have a low risk operation due to the way we administer the build out of any single home.  Our low costs and risks translate to good margins for HouseRaising while saving our customers 15 to 26%.”

CEOCFOinterviews: What kind of fees would you typically charge for someone using your plan?
Mr. Skibo: “Our fees are structured based on the amount of the design/build process that we take on, i.e., we charge less if the homebuyer is acting as general contractor and only accessing the use of our proprietary/patented software and we charge more if we are building out the house for the homebuyer.  We typically have a larger overall margin when we are building the project out and taking on more of a responsibility and frankly more headaches than just licensing our software.”

CEOCFOinterviews: It seems to me that if you can give someone a price within one percent, it is a no-brainer that they would want you to build it!
Mr. Skibo: “I think the value package of the one-stop shopping coupled with the 15% savings is the big appeal. We can do everything for the homebuyer starting with the house plan, giving him a price, helping him to get financing and building the house out, in a way that ends up saving you 15% or more. If you are building a $400 thousand house, that is a savings of about sixty thousand dollars and that is meaningful to most people.”

CEOCFOinterviews: Why did you start in the Charlotte area?Mr. Skibo: “It happens to be where our corporate office is, so that is where we are starting. We can build a house anywhere in the country. If you are a homebuyer and you have a lot in Dallas, what we would do is go to Dallas, interview local builders there, and when we find the one that we like and is interested, we bring them to Charlotte, train them on the software program and the HouseRaising way of building a house. We would then enter into a contract with the homebuyer to build that house in Dallas.”

CEOCFOinterviews: Your costs are minimal; is that correct?Mr. Skibo: “We have a very efficient operation but the other way we are able to save homebuyers money is with our vendor relationships. We have vendor relationships where we get goods that go in the house at substantial discounts. We pass along those discounts to the homebuyer. A small builder is not able to do that because he is not doing the quantity of builds that we are doing on a nationwide basis.”

CEOCFOinterviews: You just announced today, some proprietary project management software; will you tell us about that and why it is so important?
Mr. Skibo: “Our recent news event was that we filed for patents around the System C software. That is the software that covers the 3,400 tasks. It is laying out the whole process of building a custom home and all of the financial controls that go with that along the way. Where a lot of small builders get into trouble is they enter into a fixed price contract of let’s say $400 thousand. It is typical that a homebuyer wants to make changes after the initial contract is signed. The small builders do not have a way of capturing all that data into a common database. They also need to have the controls in-place to get the homebuyer to sign off on all these changes and have a loop back with the bank or whoever made the loan to get coverage for the changes so when the construction is complete, the builders capture all the costs and the homebuyer is properly financed. Often times this is where the builders get into trouble; they have not captured all the costs. They haven’t documented it, so they come out at the end of the project where they contracted to build the house for $400 thousand and all of a sudden, it is $405 or $410 thousand.”

CEOCFOinterviews: Do builders need to be educated into the use of technology or do they welcome it?
Mr. Skibo: “They welcome it. Last year, the founder of this company wanted to make a check on desirability of the product to homebuilders, so we invited builders from North and South Carolina to Charlotte. About 150 builders came in to our headquarters after learning about what we had in terms of the software. Many of those builders said that they would like to join HouseRaising and be a builder within HouseRaising. Many of the others said that they would just like to license the software.”

CEOCFOinterviews: Why should potential shareholders be looking at HouseRaising now?
Mr. Skibo: “I think the first thing to consider is that we don’t need a lot of money to build a big business. It is very low-risk. With the initial capital, we build the company through to cash flow, break-even. We take the cash flow generated as we build out these regions and continue to reinvest in subsequent regions. That is why we will be able to build out the 26 regions in five years generating about $300 million in revenue in our 5th year. Our existing business plan only includes going to 26 regions but we have ways of expanding beyond our base plan that is three-fold.  One is by franchising our operation. The second is by acquisition and we have a couple of acquisition candidates we are working on at this time.  The third is to bring in more capital and expand the initial 26 regions in five years to perhaps double that number.  We have an opportunity to make this company into a far bigger company over the ensuing five years.”

CEOCFOinterviews: What affect might the housing boom have on HouseRaising?
Mr. Skibo: “It is interesting hat you should raise that question. U.S.A. Today had an article out several weeks ago about a study done by Brookings Institute that forecast the industry from 2000 to 2030 and Brookings Institute was projecting a significant growth in that time span. There will be a number of houses that were existing that will go out of the market so they have to be replaced and then there is the natural growth associated with population growth. They were projecting substantial growth for the home building industry over the next 30 years. I suspect that if you looked within those years there might be cycles up and down, but for the long-term they are projecting sizeable growth.”

CEOCFOinterviews: As CEO, what is your focus?
Mr. Skibo: “Right now, I am spending a lot of time preparing for the roll out of our regions, putting the proper infrastructure in place, recruiting additional members of our management, and reviewing our business plan with investors and potential investors. I pay a lot of attention to the financial aspect of the business. I also have board business to tend to, so those are some of the activities, which I deal with.”

CEOCFOinterviews: Are there any final thoughts that you might have for our readers?
Mr. Skibo: “In summary, at HouseRaising, we have a company that is likely to be a large company in a few years. We are in an industry that is large and growing nicely. We have a terrific value proposition that is appealing to our customer. Our margins are good; we have an efficient operation and have little risk. There is a high probability that our stockholders will enjoy nice returns for investing in HRAI. I think it is going to be a great place for our employees to work; we are going to make it an enjoyable place to work with plenty of challenges yet a fun environment. We are going to build something significant here.”


Any reproduction or further distribution of this article without the express written consent of is prohibited.

“I think the value package of the one-stop shopping coupled with the 15% savings is the big appeal. We can do everything for the homebuyer starting with the house plan, giving him a price, helping him to get financing and building the house out, in a way that ends up saving you 15% or more. If you are building a $400 thousand house, that is a savings of about sixty thousand dollars and that is meaningful to most people.” - Charles M. Skibo


To view Releases highlight & left click on the company name! does not purchase or make
recommendation on stocks based on the interviews published.