Price, quality, and scheduling”have propelled the rapid expansion of DSLD Homes.

 When Saun Sullivan sold his home building company, PCC Homes in Baton Rouge, La., to D.R. Horton in early 2006, he had no intention of getting back into residential construction.

 Sullivan, now 37, had been building homes since he got out of college in 2000. He had taken PCC’s yearly production to around 450 units when Horton paid an estimated $65 million to acquire its assets.

As part of the deal, Sullivan and his partner, land developer H. Allen Thomason, who still develops lots for Horton, signed a two-year noncompete clause. But Sullivan discovered that he still had a building itch. His portion of the Horton sale—plus lines of credit from three banks totaling more than $14 million—provided the capital he needed to launch DSLD Homes in 2008. In its first year, the company, which didn’t start building until the summer, sold 51 homes. In 2009, it ramped up to 238 sales. And this year DSLD expects to sell 350 homes in six Louisiana parishes and one county in Mississippi.

Under that regimen, DSLD builds on a 45-day cycle from when the framing package is dropped to completion. DSLD starts eight homes per week, on average; most have three bedrooms and average 1,648 square feet of living space. The homes target entry-level buyers with prices that range from $125,000 to $210,000.

This evenflow approach extends to DSLD’s subs and suppliers. Sullivan says that the pro dealer 84 Lumber supplies much of his company’s building materials and receives payment via a direct-deposit account three days after products are delivered. Subs are paid the same way, too, as they complete their phases. Using this process, the company saves time and money by minimizing paperwork and billing disputes.

Sullivan says “price, quality, and scheduling” are what separate his homes from the competition. About one-third of what DSLD builds are spec homes, to accommodate buyers who need to move in quickly. And the builder’s quality control includes a points-system program in which subs grade the company and the trades that precede them in construction. “We haven’t had a dry run [where a sub shows up on a jobsite but can’t work] in forever,” says Sullivan.

“Saun recognized early on that the scores relate to the construction process,” says Ed Caldeira, the quality-control consultant who has helped DSLD set up its grading system. He observes that this system is particularly helpful in elevating the productivity of “in-between” subs, “who are neither mediocre nor great.” “They are coached for improvement, and they either get there or they don’t get work in the future,” say Caldeira.

Sullivan can’t say how big he wants his company to get. “We don’t know yet what our Peter Principle is.” He admires how larger builders such as NVR and Fulton Homes operate, but for now he’s content to expand within his company’s existing markets. “They’ve figured out some things, and the beauty is how simple their operation is,” says Caldeira.