My magic formula

My magic formula

Dean Chudasama has built his impressive housing business on the back of honouring commitments, helping partners and investing against the flow of the market. Ros Dodd reports

During the recession, as construction sites stood abandoned and businesses were brought to their knees by banks’ reluctance to lend, one West Midlands property company couldn’t build homes fast enough to satisfy customer demand and banks were falling over themselves to offer funding.

That company was Acocks Green-based Damson Homes, and its year-on-year success, even in the midst of deep economic gloom, is down to a “magic formula” honed over more than 25 years by its charismatic owner, Dean Chudasama.

It’s a formula that is deceptively simple: an uncompromising hands-on approach by Damson’s core team – Chudasama, building supremo Ray Sketchley and architect Parimal Tanna – a fast turnaround (the average build time is 17 weeks), great customer service and creative marketing.

The company has also eschewed expanding geographically in order to focus on the relatively small area of south Birmingham, north Worcestershire and north Warwickshire that it knows like the back of its hand.

Since its launch in 2003, Damson has built more than 120 homes – selling most off-plan – and prides itself in finishing even the least expensive to a very high specification (granite worktops, Neff appliances and American oak staircases are standard), with £200,000 properties fitted out to the same standard as those in the £700,000 price bracket.

Not only does it have buyers lining up to buy its properties, the company has won the Chartered Institute of Building’s “design and quality” award (nominated by Local Authority Building Control) four consecutive times – a feat no other developer has achieved. And one of its developments, The Friars in Hall Green, was the only residential build to be shortlisted in the 2012 RICS Awards for Design & Innovation.

“We have managed to buck the trend in the property market by doing things differently,” explains Chudasama.

The moment you meet the 48-year-old father-of-two, you are immediately reminded of the saying that “people buy from people they like”. Chudasama is chatty – very chatty in fact – and hugely likeable. It is evident, too, that he believes in always conducting himself honourably, whatever the financial climate.

“My reputation and the reputation of Damson Homes are extremely important to me,” he says. “I describe myself as being firm but fair.”

Chudasama is a good example of the entrepreneur who sees an opportunity, grabs
it with both hands and takes care to learn from it all there is to know so that he can take the experience and plough it into the next, bigger project.

He is also a good example of how hard work – in his case, juggling a full-time job and part-time studying with buying and refurbishing properties – is the best way to succeed in business.

The foundations of Damson Homes were laid many years ago. Born in Nairobi, Kenya, Chudasama moved to the UK when he was two and settled in Birmingham with his
Indian-born parents.

“My parents didn’t speak English and worked in factories all their lives, but they drove the message into me and my two sisters that we would have an education and a life with more opportunities than they had had,” he recalls.

His parents’ ambitions for their children were realised when their son became the first person in the family to get into university. “They were very proud,” he remembers.
It was, however, a somewhat circuitous route to the University of East London, where he studied land management and estate administration.

“I went through three years at Solihull College and came out with nothing. A friend of mine was working for Ind Coope at the time and his job sounded really interesting: things like negotiating the sale of part of a pub car park to a developer. I asked him how he’d got into it and he said he’d studied for a degree in land management and estate administration.

“I decided that’s what I wanted to do, too, so I found a job in photocopier sales and did a BTEC diploma part-time, gaining a distinction.”

To fund his university education, Chudasama knew he needed to accumulate some money.

But this was the early 1990s and the only jobs around were in estate agencies (London’s property market was, as in the recent recession, largely unaffected by the
economic downturn).

“It wasn’t the kind of job I’d had in mind, but it was property-related and I was chatty.”

Not only did he take to the job like a duck to water, he also managed to study for his degree at the same time. Then something else caught his eye.

“I noticed there were these guys called property developers who were approaching the likes of me to buy bargains that were more readily available because of the recession. They were refurbishing the properties and selling them. I didn’t know how much profit they were making, but they had great lifestyles.”

So, having saved enough to put down a deposit on a property, Chudasama decided
to have a “dabble” himself.

“It took me a year or two, but I found a bargain – a Victorian terraced house in Walthamstow: I paid about £45,000 for it but knew it had a resale value of  £65,000-£70,000. It needed a fair bit of work, though.”

He did most of it himself, getting up at 5am, doing his day job and his studying before returning to the house at 10pm and grafting until the early hours. His hard work paid off: after eight weeks, the house was finished. With the money he made, he bought another property – and then another. Some he sold; others he rented out.

As the 90s came to a close and his second child was born, Chudasama decided to
move back to Birmingham with his family. “My parents were here to give support with the kids.”

He immediately took up where he’d left off in London – getting a job with another estate agency and building up contacts so he could continue his property development sideline.
“Because I had quite a bit of experience behind me by then, things took off quickly
and within a year, I was so busy I wasn’t able to hold down my day job.”

So he started up on his own full-time, setting up a limited company in 2000 and employing two building refurbishment teams.

“I’d already managed to secure bank funding, but then another bank gave me a bigger and better facility and I was able to take on four building teams and have about 15 properties on the go at any one time.”

Chudasama was then contacted by architect Parimal Tanna, the husband of his sister’s school friend, who was an architect. “He said: ‘You’ve got a great name in property; have you considered buying land’? I said I hadn’t, so he took me to a plot in Moseley where he was talking to the sellers. I became involved and between us we secured a deal to buy the land with planning permission, which we sold for a huge profit.”

They joined forces and started winding down the refurbishments in order to concentrate on acquiring land for development.

“One of the people who bought land off us was builder Ray Sketchley, from the Sketchley dry cleaners family. He invited us to come and watch the build and what we saw was he built a very high quality house in record time – 11 weeks – and he also made money from it. So we joined forces with Ray, too, and Damson Homes was born.”

Over the past ten years, the company has gone from strength to strength. “All the things that have helped us to survive and grow, even when other similar companies were collapsing, centre on the fact that we are a hands-on team – each of us has our own, clear roles – we cherry-pick our sites to ensure we get them at the right prices, cut out the middle man wherever possible, and put a lot of effort into networking and marketing.”

The company regularly holds open days, has given away a brand new house – a three-bedroom property worth more than £250,000 to a “deserving” family, which drew 6,000 entries when it was promoted on a local radio station last autumn.

As well as clever marketing, Damson also takes care of its customers. “We do things differently: for example, we were the first developer to start running blogs of our sites being built, so that purchasers could watch their homes being built without leaving their front room. We run a client portal where the buyer, mortgage adviser, solicitor and everyone involved in the sale can log in and submit notes, which everyone sees. So it speeds up the process and makes everything traceable.”

The strategy has paid dividends: 90% of Damson developments are sold off-plan, with 65% of buyers exchanging contracts before the site is finished.

“This was the case even through the recession,” says Chudasama. “People are prepared to do that because they have faith in the product, the person they’re dealing with and they’ve seen previous developments we’ve done, so they know what they’re going to get.”

So how does he see Damson Homes developing over the next ten years?

“The one thing we don’t want to lose is the personal touch and the quality, and both would be severely compromised if we had multiple sites all over the West Midlands.

So I see us continuing to grow within our current catchment area, developing single
or double sites as we do now, but with a higher number of homes on each site. At
the moment, we build 15 homes at the most on one development; maybe in future it might go up to 50.”

He may enjoy the lifestyle that comes with success, but money is no longer a driver.
“It’s about loving what we do,” says Chudasama. “We could easily have Damson Homes sites all over the West Midlands, or we could sell up and buy a yacht somewhere, but we don’t want to. We do enjoy the lifestyle, but we’re passionate about what we do.”

Three golden rules that keep Dean focused

Dean Chudasama’s success in business is down to hard work, determination and a passion for what he does. But he also believes the set of rules he lives by has played a part.

Ronseal it: “Like the famous wood sealant, I always do what it says on the tin. That means that if I have committed to something, then I honour that commitment. When 9/11 happened, the property market went dead almost overnight. I’d committed to buying four or five properties and I honoured the deals I’d struck, even though I knew it could cost me money. My reputation was more important to me than anything.”

What goes around comes around: “If you help people to get what they want out of life, you will get want you want, too. It’s an approach that really works. For example, in the earlier days of my property career, I made a point of passing on lots of referrals to lawyers I knew. At some later date, if I needed a free conveyance when my margins were tight, one of those lawyers would usually give me one. That sort of thing has happened in lots of other areas of my work, too. Out of every three people I’ve helped over the years, even if two of them took advantage, one person would – at some point – help me back. And that means you’re always slightly ahead.”

Pick your time: “One of the rules I have lived by throughout my business life is ‘when the market gets greedy, get cautious. And when the market gets cautious, get greedy’. That means not going with the flow – being strong enough to do the opposite of what everyone else is doing. But it’s worked well for me.”