Facebook, a piece of paper and a pickup truck: That’s what Ed Merkel and Mark Segler had to work with when they started Elmwood Custom Homes a year and a half ago.
Working for local and national builders for a combined 25 years, Merkel and Segler didn’t have a building whenever they first started their business. Merkel recalled how they sold one of their first customers off of concepts and ideas when they didn’t have any examples to show off. But their buyer trusted Merkel and Segler enough to do what they do.
Several months later, he became the proud owner of his very own Elmwood custom home.
“We met with website people in January, and they’re like ‘We need pictures of what y’all do,’” Segler recalled. “We’re like ‘We don’t have any! But we will!’”
A year and a half later, Merkel, Segler and their partner Andrew Scraver officially opened their new business in a 2,900 square foot model home during their ribbon-cutting ceremony last Friday; the model template for all the homes they build for their customers.
In 1993, Segler founded the Volunteer Christian Builders, a non-profit that picks a location anywhere in the nation and builds a church there over the course of a week. Segler decided to go into construction work shortly after volunteering, but quickly realized the difficulties of the business.
Buyers would often get frustrated due to unexpected charges, lack of communication from their sellers and a change in construction from what they were promised.
That was when Segler and Merkel decided to change their approach to the industry.
“The industry standard is you buy low at a low price upfront; then you pay high dollar for upgrades,” Merkel said. “We included 10 or 12 of the most common things upgraded in a home, and we pulled them into our base price.”
Realizing the home-building process could be more transparent and straightforward than the industry standard, Merkel and Segler decided to include more so buyers could get more value for their home.
“We could get along more the whole time,” Merkel said. “From the time we sign our contract to the time we close the house, all expectations are on the same page.”
After working for hard drivers who were more concerned about the bottom dollar than they were the people, Segler said it was a blessing to move to a different work environment where people were more valuable than the money.
“When we started, we’d be up til’ one or two in the morning sending each other screenshots of floor plans,” Merkel said. “We breathe this thing.”
A DIFFERENT APPROACH
Officially opening the Elmwood Custom Homes model in July, Merkel and Segler brought on Scraver to manage the finances for their new business structure.
Merkel said they wanted the entire home-buying process to be unique to the market and put more power into their worker’s hands when it came to construction.
“I tell the architects, ‘Here’s what I expect with you. I want you to take that idea that no one else will let you do that’s bouncing around in your head, let’s put it down. Let’s try it,” Merkel explained. “I’m willing to try everything.”
Opening a new housing business wasn’t easy for Merkel and his crew. For one thing, land costs were skyrocketing in Midlothian, which is one reason why the trio is actively tapping more into the Waxahachie market.
But earlier this year, another unforeseen problem hit the business: President Donald Trump’s tariffs took effect in June, and it took a large chunk out of their finances.
“That hit us hard,” Merkel said. “We had this rash of sales, the tariffs took place, and all those sales were sold pre-tariff. We had to honor those prices.”
Eventually, prices began regulating again, and the trio got their business back on track. Merkel said three-quarters of their sales are under age 45 and they offer housing options from 2,500 to 4,000 square feet.
They also install smart technology that self-starts in-house devices such as security cameras, Roombas and kitchen appliances. Merkel said if he wanted to, he could let in interested buyers into their model home remotely and guide them through it while monitoring them on the security cameras and talking to them over the house speakers.
Then there’s Alexa, a smart assistant device developed by Amazon.
“Alexa,” Merkel said to the speaker. “End my day.”
Alexa then proceeded to turn off the lights, lock the door and adjust the temperature.
“Okay,” Alexa replied. “I’ll hold down the fort.”
BUILDING A COMMUNITY
One of the conditions that the trio agreed to was taking 10 percent of their profits during each quarterly or biannual, dividing it into three percent between each person and donating their percent to a philanthropy organization of their choice.
“That’s written into the DNA of our company,” Merkel explained. “That was important for the three of us that be non-negotiable. We do this not only for us, not only for our families but for the communities we’re in; for non-profit organizations that are also trying to do good. We want to pour into those things also.”
The trio also holds their workers in high esteem. Like Chik-Fil-A and Hobby Lobby, they don’t allow their employees to work on Sunday, which is typically a high sales day for the housing market.
They also invited their labor workers out to the ribbon-cutting ceremony, right alongside real estate agents and developers.
“They’re part of this,” Merkel emphasized. “Their fingerprints are on this as much as ours. We may have designed it, but we didn’t paint it. We cherish that and put a value on them feeling a part of it.”
Merkel said Elmwood Custom Homes isn’t just in the business of making money — they’re in the business of building lasting relationships.
“We want this to be personal, so we know the names and have some semblance of a relationship with our customers,” he said. “That’s important to us. At closing or after closing, take a picture with these guys and celebrate with them.”
Segler concurred, saying that he wanted to raise his kids in a neighborhood filled with good people that he knew.
“We want to know every person,” Segler remarked. “We want to touch everybody, and we want to be part of the family. That’s what drives us.”
David Dunn, @DavidDunnInTX