NEVADAN AT WORK: Builder and lender's heart is in home and hearth

NEVADAN AT WORK: Builder and lender's heart is in home and hearth

By JOHN G. EDWARDS
REVIEW-JOURNAL

Feb. 13, 2006
Copyright © Las Vegas Review-Journal

As the son of a carpenter, Leo Davenport knows how to make homes. But his specialty is making loans to people who want to build their own custom home, with or without the help of a general contractor.

Davenport has been involved in the home industry since childhood, when he began helping his father work on homes. Davenport said his always-tinkering father's projects sometimes made finding the bathroom an adventure.

After serving in the Air Force and being stationed at Nellis Air Force Base during the Vietnam War, Davenport made home loans for Decatur Mortgage, a private lender, then for Fidelity Mortgage, a company he started.

Then Davenport "retired," giving up lending to buy and restore homes. He said he loved the work and the freedom to make his own schedule. But his work in home building moved him back toward mortgage lending.

So now Davenport has his hands in both financing and building homes. He owns and operates GFD Investments, a private lending business, and is a partner in a home building company called LGP.

Davenport also helps shape Las Vegas' future as a planning commissioner.

Question: Tell me about your childhood.

Answer: When I grew up, my dad was a carpenter, and our house was always torn up. He moved the bathroom so many times, I didn't know where it was.

I don't know how many times he and I were working on houses, and he'd fall through the roof or I'd go through the roof.

Question: You were helping him?

Answer: And carrying those 80 pound bundles of shingles up the ladder. When I was growing up, my dad broke his back and there were years that the only reason we ate was the carpenter's union. We basically traveled all over the country until we ended up in ( Bell Gardens), Southern California, when I was 12.

Question: What happened then?

Answer: We stayed there until I graduated from high school, and then I got an invitation to war, to Vietnam. It's the only lottery I ever won. I enlisted in the Air Force. I got stationed at Nellis. Got married. Everything we owned was in one car when we came here. Stayed at Nellis the whole time. When the war ended, I got out early and went to work for Dial Finance.

Question: What did Dial do?

Answer: The finance companies like Dial predated credit cards. I remember doing loans to buy coffee pots for 30 bucks. The credit cards phased out the finance companies.

Question: What next?

Answer: After two years, I went to work for Decatur Mortgage, a private lender. We were mainly doing (second home loan mortgages), and they were for $2,000 or $3,000 to remodel their kitchens, to do home improvements, to do yard improvements. Of course, homes cost 50,000 bucks then.

In the '70s and '80s, most of your mortgage companies were loaning mostly their own products. Then, the idea came that mortgage brokers could originate loans and sell them to these people.

After 10 years at Decatur, I left and started Fidelity Mortgage. I basically retired at 33. I started buying and fixing up houses.

Question: That's not exactly what most people call retiring.

Answer: Well, it is to me. I didn't have to punch a clock. I loved it. I would buy the houses in run-down condition, rehabilitate them and then rent them out. At the top, we had like 35 houses and we had a couple of apartment complexes.

Question: How did you get back in the mortgage lending business?;

Answer: (Former investment clients) would call up and they would say: "They want me to make a loan on a house at (a specified address). It's three-bedroom, two-bath, two-car garage and they tell me it's worth $150,000 and they want me to loan $100,000 on it."

So I'd drive by it. I would run (comparable real estate sales) on it. I would say, "Yeah, they're right. It's a good loan."

I figured I was doing all the work. So finally I just came back (into the business), slowly but surely.

Question: You make loans to people who want to build their own homes?

Answer: Most of them will have the property already bought, and now they've paid it off and they want to do a construction loan.

Question: Where are most custom homes being built?

Answer: Most people are ending up in Pahrump, because of (lower) land prices (there). We're seeing some in Mesquite. The other side of the river is Scenic, Arizona. A lot of people are building there now.

Question: Where do owner-builders get plans if they don't hire an architect?

Answer: Some people order them out of a book. In Scenic, all you do is pay $100 for your building permit. No inspectors, they never come up there, because they've got to come all the way from Kingman up to Scenic. Whereas in Nevada, it's $10,000.

They have an income tax in Arizona, but also property taxes are a third of what our's are. Power is much less expensive, too. You go to Pahrump, you get a bigger house than in Las Vegas, you get bigger lots. It's unusual not to see anything that's not a half-acre lot out there or bigger. A lot of times they're (drawing water from) wells.

Question: You build homes, too. How many homes are you building or starting to build?

Answer: We're probably at 100 homes right now. We're trying to do lower-income (housing for first-time home buyers and the seniors). I want to do a (condo complex for seniors). We were going to have buzzers so that somebody could come (help) if somebody fell down. We are negotiating with another city in Nevada, I won't say where, that is promising to give us the land if we build what we promise to build. Then, we can sell it even cheaper. And there will be a homeowners' association to take care of it all after we're done.

Question: How do you build houses?

Answer: We have a factory in Pahrump, and we make these panels. They're 4 feet wide, and they can be 8, 10 or 12 feet, whatever you need in height. You carry them out to the job site, and they have pins so they lock together. So our construction costs, as far as labor, is probably 20 percent of what it would cost to frame a normal house. It will pop your ears when you close the doors, they are so airtight

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