Those who’ve read the biography of Alexander Hamilton, or who have seen the play, know the subject is portrayed as a man in a hurry. Alan Archuleta, GMB, CGR, the 2021 NAHB Remodeler of the Year, would not agree with any comparison to Hamilton, but in the five years he’s been involved with NAHB locally and nationally, contractor-in-a-hurry fits.
At 45, Archuleta is in the prime of his remodeling career. He founded Archuleta Builders 12 years ago and today is enjoying the fruits of a hard-won reputation for excellence in New Jersey’s finest suburban areas. The typical Archuleta Builders’ client works in New York City in business, law, finance or technology.
The company specializes major remodeling projects in the $300,000 to $600,000 price range. They fill in with smaller projects like kitchens, baths and basements. In 2020 the four-person firm completed nine jobs billing $2.5 million. For 2021 they’ve signed contracts for $1.8 million. Some of it is new business, and some of it is old business deferred due to the COVID-19 pandemic.
Wearing a baseball cap and a COVID beard, Archuleta conveys a relaxed demeanor despite his potentially overwhelming number of professional and personal commitments. Beginning with the personal side, he and his wife Melissa are parents of three active kids. In winter months he’s frequently away coaching his kids’ ski team.
On the professional side, he’s an active member of the Metropolitan Builders Association of New Jersey, the New Jersey Builders Association and NAHB Remodelers at a national level, where he is currently a trustee. In 2023, he will serve as the organization’s national chairman. Archuleta is also active in the Executive Association of New Jersey.
Keeping these commitments while running a successful remodeling company is a juggling act. This is particularly true in an industry where remodelers tend to work long hours in their businesses rather than long hours working on their businesses. Colleagues from the industry say he manages to strike the right balance.
“‘Professional’ is the best word to describe him,” says architect Ken Fox, of Fox Architectural Designs, who has worked with Archuleta on several major remodeling projects. “He’s organized. He communicates well with clients. He’s very good working off plans. It all comes down to working with the right attitude. And the other significant factor is his education. Not every builder is great on green or sustainable design and not every builder is great on framing. He knows it. He’s put in the time.”
Since 2016 Archuleta has found time to earn six professional designations from NAHB: Certified Aging in Place Specialist (CAPS), Certified Graduate Associate (CGA), Certified Graduate Builder (CGB), Certified Green Professional (CGP), Certified Graduate Remodeler (CGR) and Graduate Master Builder (GMB). To Archuleta, he was like a horse coming to water.
On Association Membership: Archuleta explains why he’s been a member of the association so long, and the long term benefits he’s seen from that commitment.
“It was apparent to me from day one as a member of the association that I had real thirst for knowledge. The classes I took were that good. I eventually learned that even more important is the knowledge I gained from interacting with my NAHB colleagues,” Archuleta says. “I’ve been learning in leaps and bounds from them.”
Early Training and Education
His certifications with NAHB were not Archuleta’s only formal training in construction—far from it. A Colorado native, Archuleta studied construction management at Colorado State University, a knowledge he gained while working for an employer who had hired him at the age of 15 as a jobsite helper.
The company he worked for back then held a patent for acoustical panel systems. The company was master distributor of the product. They also provided installation services to national clients. After leaving Colorado State, Archuleta went back to work for his original employer, managing jobsites all over the country. Throughout the 1990s, he traveled extensively for clients such as Lucasfilm at Skywalker Ranch and many other important clients throughout the country.
Eventually he tired of the travel and requested a job that would keep him at home. Soon after, he met Melissa, a native of Morristown, New Jersey, who was working and living in Colorado. They married and moved east in the early 2000s. There, Archuleta was hired as an outside lumber sales representative for 84 Lumber and then Warren Lumber in Phillipsburg, New Jersey.
“I killed my sales quota each month just out of pure hustle,” Archuleta notes. “And I quickly found a series of guys that found value in a guy like me. That’s when I made my transition to remodeling. I took a job working for a builder/remodeler. When his business slowed in 2007, I took a job with another remodeler for 14 months before I realized that it was time for me to go out on my own.”
Starting out in the remodeling business in 2008 at the very beginning of the Great Recession could be seen as the definition of bad timing.
“It turns out to have been a genius play,” Archuleta says, citing some good advice from a local architect. “He told me to ‘go for it’ but to stay lean and to make my mistakes while I was small. He told me to build the business correctly and to put good systems in place. That way, the next time the market recovered, I would be able to ride the wave with it.”
Archuleta attributes his early success to his lumber sales experience and his innate social skills. He knows how to work well with all types of people. He also believes his more laid-back Colorado style is a positive factor. He is less edgy than his many New Jersey competitors. “I wasn’t just another harsh New Jersey or New York City contractor. There’s a real edge to many of my colleagues in the industry. I put people at ease. It helps me convey a sense of trust that I will do a good job.”
Archuleta says luck also played a role in his early success. He was able to immediately secure a $50,000 basement project as well as a smaller mudroom renovation. But his third job ever was a $600,000 room addition for a family in Madison, New Jersey.
“That job really put my name on the map. To this day I take pride in it. I constantly reach out to this family who I now know on personal basis, and I make sure everything is okay,” Archuleta explains. “They are a young family, and they’re going to be in Madison a long time. It’s proof that our company did the right thing. We built quality. It was something that architects could look at and see what I could do as the new kid on the block.”
Open-Book Construction Management
To Archuleta, his construction management approach as well as his open-book method are keys to his success attracting and excelling on large-scale remodeling projects. For those big jobs, he prefers these business models to the lump-sum pricing favored by many remodelers.
Whereas a lump-sum approach might yield a bigger gross margin of between 35 and 40 percent, Archuleta is okay with a 13 to 17 percent management fee. From a sheer dollars-earned perspective, these smaller margins are sufficient for big-ticket projects. The open-book approach offers the kind transparency his ‘Type A’ clientele gravitates to. And with construction management methods, his clients agree to share risk for the overall success of the project.
On Construction Management: “It allows the contractor to essentially lower his risk, in return lowering his fee,” Archuleta says, explaining the benefits of strong construction management and how it benefits both homeowner and contractor.
“It puts more risk on the homeowner. They need to follow the project and to make sure we’re on track to hit budget. It’s a team effort. At the same time, I am getting paid every month for my services no matter how much money he or she spends that month,” Archuleta explains.
A key function for Archuleta is to get three bids for all trades while retaining strict control of the scope-of-work for each trade contractor. The client selects the trade contractor, but Archuleta’s view of which contractor of the three will best fully complete the scope is made known. “I make it clear to my clients that they’re not allowed to just use the cheapest subcontractor. I tell them that it’s hard to manage to a quality result with low bidders.”
Archuleta cited two recent projects as examples of the benefits of his approach. One was a remodel and expansion of a 6,000 square-foot, 200-year-old carriage house. The project took two years to complete. The other project was a new custom home loaded with the latest bells and whistles.
On the custom-home project, Archuleta and his client took a calculated risk by selecting the low bidder for drywall in order to achieve a net a savings of $30,000. The goal was to use the money elsewhere on the project. Archuleta overcame his inherent mistrust of low bidders by calling references. Other contractors vouched for the drywall firm. In addition, he felt that if they underperformed on the job, he could add back funds to enlarge the scope for the painting contractor, who could fix any drywall errors.
The $30,000 savings encouraged the client to upgrade to a Tesla roof, add two Tesla Powerwalls and two Tesla charging stations. According to Archuleta, these types of upgrades would be more difficult to fund if the project is contracted under a traditional set-price model.
“With set-price contracts, the average margin in New Jersey is anywhere between 35 percent and 40 percent. It could be even higher when you add higher-end products like the Tesla roof and spray-foam insulation,” Archuleta explains. “When specifying new, high-end products, the fear is greater of missing something in the bid, a fear of not bidding it in properly. You’re always rounding up quantities to manage the risk. A builder is taking a larger risk with those more expensive products, so the price just keeps laddering up.”
The 200-year-old carriage house project offers a different example of how an open-book construction-management approach works well for Archuleta. The original structure was supported by four different foundations. Additionally, the building had undergone dozens of overlapping improvements over the decades. Because of these complications, the project took two years to complete and ended up at 11,600 square feet, almost double the original size.
“Because that job was construction management, I knew that I had a certain amount of dollars coming in each month just from that project, which can cover a lot of costs,” Archuleta explains. “If I’m over there framing for four months, my guys have nothing to do. So that’s when you pick up a $30,000 to $50,000 basement project. Or you’re doing a kitchen, and you’re pulling guys and sending them to get it done. It helps keep cash flow consistent and with planning the job, which is done from the office with myself and my office manager.”
Attracting a Younger Cohort
NAHB and other building trades associations are working diligently creating programs they hope will attract the next generation of remodelers, builders and specialty contractors. The relatively youthful Archuleta is a finalist for the NAHB Young Associate award this year. Age 45 is the outer limit for that award.
To Archuleta, the challenge of how to attract younger professionals is a focus of his work on behalf of the industry. It starts by finding new ways to attract kids to chart a career path into the trades. Then it’s about getting them to start as members and to meet others they can learn from and network with, Archuleta says.
On Attracting Younger Members: Possibly one of the most important areas for the association is keeping the membership alive and active. Archuleta explains how he is working to attract new, younger members.
When it was suggested to Archuleta that young professionals in the tech industry really enjoy meeting at industry events like South by Southwest in Austin, Texas, Archuleta agreed that attracting younger builder and remodeler members is do-able and is about finding the right formula to bring them together. He pointed out that after one more year in Orlando, the International Builders’ Show moves permanently to Las Vegas.
“It’s a strong move for IBS to commit to Vegas indefinitely, right? One last year in Orlando and then we’re out there forever. I think Las Vegas draws younger professionals. It’s a little more appealing. There’s more to do,” Archuleta says. “Now it’s about reaching out to the manufacturers and the suppliers that you know showcase there to really to reach that younger audience with newer products and really sell the sizzle of this business.”
The sizzle in this business is new products, he says, new building-envelope products, products that are sustainable and energy-efficient and solar products, like the Tesla roof, Powerwalls and charging stations. These advancements have the power to draw in the next generation of remodelers.
One of Archuleta’s mentors in the remodeling business is NAHB Remodelers past chairman Bob Peterson, CGR, who was Remodeler of the Year in 2007. Peterson is a remodeler and custom builder in Fort Collins, where Archuleta went to college. Archuleta says that if he knew Peterson back then, he probably never would have left Colorado. From Peterson’s perspective, Archuleta is a very worthy Remodeler of the Year and is someone who represents the future for the association.
“Alan embraced what makes NAHBR powerful: education,” Peterson says. “He is ultra-relationship driven. He jumped in full speed, soaking up everything he could, as quickly he could and just as quick showed NAHB leadership and the leadership development committee his talent. He quickly volunteered for positions that it takes many less-assertive people years to get involved in. At that point, his talent, passion for the industry and the NAHB federation skyrocketed.” QR