By combining the concept of a showhouse with a real estate flip, San Diego designer Susan Spath found a way to spotlight her style and make a splash.
I build a lot of homes for clients, but so often I don’t end up getting to add them to my portfolio. Sometimes the client doesn’t want anyone to take photographs. Other times, they don’t finish the project completely, or they make a change that doesn’t reflect my design aesthetic. That’s always been an issue, so about 25 years ago I had this thought: Why not design and build my own house to really show off my work?
The way I do it is a bit like a real estate flip: I finance the construction of a new home and spend a year or so designing it and building it. I start showing it to potential clients four or five months before it’s completely finished—once the drywall is up, windows and cabinetry are in and some bathrooms are complete, so that people can get a sense of what the house is going to look like. I also take all my clients through it because they may want it, or know someone else who wants it. Then I put it on the open market and sell it, furnishings included. It works so well that I’ve done it five times.
There are so many ways building and selling a showhouse helps the business. For one, it’s so much better to show your clients an immaculate, brand-new house than to get permission from a past client to do a tour of their home. Even if it’s gorgeous, there are usually dogs and kids running around, or maybe it’s messy, or it’s not the right vibe. Just like a regular designer showhouse, the experience is inspirational—I’m using high-end fixtures, exquisite flooring and built-ins—but it’s cohesive because all of the rooms are done by one person. I have regular clients who aren’t even working on a project who want to visit these houses four or five times. They see new ideas in action and then they end up wanting to make changes to their own home.
The house is also a great way to get my name out there to the right people. Because I’m putting these properties up for sale, I’m connecting with estate agents, and then everyone they bring to look at the property [sees my work]. Obviously most of them don’t end up buying the house, but if they like what they see, I make a connection. If you think about it, people who are looking at potentially buying a home are the perfect clients because they are in the market for a high-end home and about to need a designer. By doing this, I’m reaching the right people at exactly the right time. Even though I’m trying to make a profit on these homes, it’s really about marketing.
There are plenty of challenges. One is that you are taking a big financial risk. You’re hoping the real estate market won’t turn on you, which can be nerve-wracking. You also have to furnish it. I own a high-end showroom, so I have good relationships with vendors and I can get wholesale pricing, but it’s still a real expense. The local trades are happy to work on these projects because it’s good exposure, but it’s not any different than hiring them to work on one of my client’s homes.
It’s also a tremendous amount of work for which you’re not getting paid hourly. When you’re doing something this custom, you have to be on-site frequently. There are weeks when I’m there every day and I’m also at my showroom business and I have all my clients. So you get stretched pretty thin. It’s not something you should do if it’s just a business move—you have to really enjoy the process and treat it like a labor of love.
The upfront investment on the first four showcase houses was a couple million dollars, which I financed with traditional loans or in partnership with a spec builder; in the end, they all sold in the $6 or $7 million range. Last year, I decided to go really big and built a showcase home that was more than twice that size—about 12,000 square feet, plus garages and a covered patio. I also made a point of hiring someone to make videos and really push it on social media. It was a gamble, and with all of the COVID supply chain issues, there were so many setbacks. But it paid off—the house sold for $15 million in November—and I got great new clients from the exposure who want to build just as big. I’m already planning on doing another one!
Homage image: Spath uses her custom showhouses to demonstrate concepts—like high-end indoor-outdoor living—to existing clients and potential leads | Courtesy of Kern & Co