Estridge: We need cash to survive

Back to TopCommentsE-mailPrintBookmark and Share

The president of the Estridge Group says he has heard from three potential investors that could help keep his troubled homebuilding operation in business.

Without an infusion of cash, Paul Estridge Jr. said Wednesday, he will likely have to close his sales department within a week to 30 days.

The company needs about $2 million in capital and a credit line of $6 million to $8 million to remain in business, he said.

Carmel-based Estridge Group, one of the area's most recognizable local names in homebuilding for more than 40 years, said Tuesday that it is seeking investors or a line of credit to stay afloat.

Estridge has pared the company from 150 employees in 2004 to 15 today. He somberly told IBJ that he laid off 10 of his 25 employees on Tuesday.

Estridge, which traces its roots to 1967, could become just the latest in a string of local home builders that have failed in the recent economic swoon. C.P. Morgan Communities LP and Davis Homes folded in 2009, and Hansen & Horn Group Inc. followed suit in 2010.

But Estridge remains hopeful about his long-term prospects.

“This is a knockdown, not a knockout,” he said from his office at Clay Terrace in Carmel. “We’ll reconstitute ourselves in some way, shape or form.”

One way or another, Estridge said he has no intention of exiting the homebuilding business. “I’ll never retire,” he said.

Estridge said he needs the line of credit to continue, and without that, more of his firm’s employees will lose their jobs in the short term.

Estridge’s latest pursuit of outside investments marks the second time in less than a year the company has sought a cash infusion to keep operating. Last June, about 25 investors agreed to contribute from $25,000 to $500,000 in exchange for profit sharing.

Banks still hesitate to loan homebuilders money, Estridge said, due to the economy and tighter state and federal regulations that make many loans to homebuilders unprofitable for banks.

“Local banks want to loan the money, but I’m told flat out, if they do, it will be punitive,” said Estridge, who joined the his father's firm in 1983 and helped expand it into a major local player in custom and production homebuilding.

Nationally, new home sales have declined from 1.2 million in pre-recession 2005 to 321,000 in 2010. According to the Builders Association of Greater Indianapolis, home permits filed during the same five-year period in central Indiana have dropped from 13,202 to 3,720.

Steve Beck, managing partner in the local office of Geneva Capital Group and a long-time local banker, said Estridge’s plight is common among home builders.

“The biggest issue today is, what’s the value of the property?” Beck said. “No one is sure if we’ve bottomed out or not, and regulators are talking out of both sides of their mouths. On one side, they’re urging banks to make more loans. On the other hand, they’re telling banks to tighten up [constraints] on those loans.”

Another factor hurting homebuilders like Estridge is appraisers, who Beck said are being “overly conservative and downgrading the value of homes.”

“Until this thing gets worked out,” Beck said, “banks are saying they’re not making any loans that could cause them any potential problems.”

Estridge, 53, said demand for his company’s homes is solid.

Estridge said he has 41 homes under construction, with 21 of those sold. Estridge has buyers lined up for another 28 homes, but has no financing to build them, he added.

Beck said local demand is only part of the equation. Since many loans are sold on the national market, 60 percent of a bank’s ability to offer loans has to do with national demand.

Estridge said he met with all his customers Tuesday night. “People want to know, are we going to finish their homes,” he said. “The answer is, ‘absolutely.’”

Estridge said he laid out three primary options for his home-seeking clients; Get a refund for deposits on houses not yet started; have the homeowner provide financing for construction costs up-front; or transfer the contract to one of two companies owned by family members (Estridge Custom Galleries and Coronado Custom Homes).

While Estridge prefers to spend his days looking forward, he admits he made a big mistake that put his business in jeopardy.

“I continued making interest payments on all the land we owned at a level of $400,000 a month for three or four years,” Estridge said. “That depleted all of our capital. I should have just given the land back to the bank. As I look back, there’s the tactical versus the moral and the ethical.”



  • Truth
    Not only has Paul Jr. commited heinous acts against his fellow Hoosiers and disgraced his family, but this self proclaimed "Christian" will soon answer to what he has taken from his loyal employees. Good to know that employee insurance premiums and 401K contributions helped finance vacations and Butler educations. Karma has its way of making things right. Thank God.
  • what do we do
    I have been waiting for Estridge to finish the work but they put me off and now they won't call. Anyone know what homeowners are to do to fix items the builder was responsible for? They won't even send me a list of the subs. I've left messages and emails but no call back.
  • what do we do
    I have been waiting for Estridge to finish the work but they put me off and now they won't call. Anyone know what homeowners are to do to fix items the builder was responsible for? They won't even send me a list of the subs. I've left messages and emails but no call back.
  • what do we do
    I have been waiting for Estridge to finish the work but they put me off and now they won't call. Anyone know what homeowners are to do to fix items the builder was responsible for? They won't even send me a list of the subs. I've left messages and emails but no call back.
  • what do we do
    I have been waiting for Estridge to finish the work but they put me off and now they won't call. Anyone know what homeowners are to do to fix items the builder was responsible for? They won't even send me a list of the subs. I've left messages and emails but no call back.
  • what do we do
    I have been waiting for Estridge to finish the work but they put me off and now they won't call. Anyone know what homeowners are to do to fix items the builder was responsible for? They won't even send me a list of the subs. I've left messages and emails but no call back.
  • shoddy bldg
    I have first hand knowledge of what an upstanding guy Paul Jr. IS NOT. There are issues on a house in Centennial that have come to light due to shoddy/shady workmanship. Young, single, home owner is strapped financially to fix damage caused to the home due to faulty building. Paul's response is "Not our problem. Too bad. You pay for the fix" Too bad the young owner was encouraged to purchase an Estridge home based on his reputation as a "quality builder". If he does come back, any friends of the young 30's age bracket of the home owner will certainly be steered away from buying Estridge.
    • A Real Story
      Estridge has backed out of an enormous amount of obligations to actual homebuyers, this is a fact I know firsthand. I'm not sure how many of these, "he's an honest guy" posts are from actual people, but Mr. Estridge and his employees are known to jump in these forums and post their propaganda.

      Estridge is still trying to get millions of dollars from communities like Westfield for subdivisions that have literally zero demand. How honest is that? Honestly involves being realistic. The only reason Estridge is still in business is people like Westfield Mayor Cook, who is more than willing to throw taxpayer money at builders in exchange for their political support.

      Estridge had trouble with his credit long ago (see story last year in IBJ). He owed his subs money and instead of paying them, borrowed from them. The man cares more about his "family legacy" than his employees, subs and customers.
    • re: HUH
      To: HUH,below, about the "bad credit" comment, you must not be in Indiana!by
      Bravo, Estridge!
    • Good Man
      Paul's other mistake was not letting more employees go sooner in this housing meltdown. So, he pays his creditors when most others were stiffing them and keeps hard working Hoosiers working with the belief the market will recover, and while battered, at least he didn't quit on his people and homeowners like many other homebuilders. He's a stand up guy, someone we should be pulling for, not against. Anybody that knows what's going on knows this is a perfect storm that's hurt a lot of good builders and developers. Blame the regulators. Hope someone helps Paul out and gets rewarded handsomely for it.
    • Bad Credit?
      I am a builder and I have not had any trouble obtaining credit. Does Estridge have bad credit?
      • A SAD ENDING
        Estridge Group Inc. now blames the banks.
        It's Estridge Inc's waste and deliberate
        over-extension that did themselves in!
        NO new investor money for them, and
        NO MORE repeated BAIL-OUTS!!
      • Sad times
        In my opinion,one of the top tract builders in central Indiana.I do not own an Estridge home,but would not think twice on recommending someone to purchase one.
        If I had cash to help,I would.
        Believe Paul should have let the land go,hindsight is always 20/20.Just a man trying to hope for a better future
      • Free Ad
        Another free ad for this company---WHO CARES ! Needs taxpayer funds
      • Industry Icon
        Paul Estridge Jr. and his dad before him are bulwarks of our strong housing base. Estridge-built has meant something since the early 70's and still does. If he fails, the industry, the market and the area suffers. The banks not the builders ruined the housing market. Good luck Paul & company.
      • What about the "Guaranteed Buy" agreements?
        Estridge sold a lot of homes under the "guaranteed buy" promotion, where people signed-up to purchase an Estridge home, but Estridge was on the hook for selling the buyer's current home. In hearing from some folks who are currently in the process of building with Estridge, Estridge has backed-out of that obligation. I think that you may see quite a few empty homes after this since the buyers won't be able to sell their homes and move into the Estridge home that was built for them. It's a sad situation for everyone involved.
      • Good Luck
        Paul is a very cool guy. Hope this all works out for him.
      • Indy Housing
        I very much appreciate Estridge's approach. It seems he is trying to do the right thing by asking for help. I also appreciate that he's being up front with his customers and trying to do right by them. I wish the folks at Hansen and Horn had half as much decency before they left all of their customers in the dark about what was happening with their company. We had to learn by watching the news that our half-finished house would never be completed and we would never see the thousands of dollars we paid them. At least it seems these folks won't be losing all of their savings as a result, as we did.
      • Estridge
        It seems like Mr. Estridge is a much more moral man than Ward Horn of Hansen & Horn. Mr Estrige seems to be willing to finish what he has started and refund those that haven't started. Horn knew he was going bankrupt so he signed up as many new sales as possible, took $6000 deposits from everybody knowing he could never fund the project and has never paid anybody back. That is not to mention all the vendors the owes hundreds of thousands of dollars to. I give Mr. Estridge credit for being a stand up guy and Mr. Horn can wait for his space in the lower depths of Hell.
      • Estridge
        We all need money to survive. Another over zealous greedy home builder.

      Post a comment to this story

      We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
      You are legally responsible for what you post and your anonymity is not guaranteed.
      Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
      No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
      We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

      Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

      Sponsored by

      facebook - twitter on Facebook & Twitter

      Follow on TwitterFollow IBJ on Facebook:
      Follow on TwitterFollow IBJ's Tweets on these topics:
      Subscribe to IBJ
      1. Good Day I am Mr (Victoria Wright) from United state of America, i stayed in NEW YORK, and i have a broke up business, until i found this company email who help me to gain a loan for business,, and now i want to used this short medium to congratulate the below company for the fast and safe money they loan to me without any form of collateral, i loan 500,000USD from the company to save my business and lots more, i saw their mail on the internet, everyone always give testimony for what they did, so i quickly contacted them and they all did everything for me without stress and my money was sent to my account just 3 days later, i was surprise and i feel so glad, now i have a standard business control agent who help me, now i will advice those who need urgent loan to contact him at the bellow email:zenithfirm12@gmail.com

      2. NOTICE:This is to inform the general public that Vampires are real. My name is James Franklyn.,am an agent of vampire,am here to introduce our new world trend to you,a world of vampire where life get easier,we have made so many persons vampires and have turned them rich,you will be assured long life and prosperity,you shall be made to be very sensitive to mental alertness,stronger and also very fast,you will not be restricted to walking at night only even at the very middle of broad day light you will be made to walk.In case you are wildly oppressed by some unscrupulous persons we can still help you fight them.Your protection is assured immediately you join.Just contact the bellow email if you are interested we are here to attend to you anytime you want us. Contact the bellow email for more details. Email:vampirescreed@hotmail.com Sincerely: James Franklyn.

      3. Bravo! Someone else that is willing to speak the truth! Bravo!_____NBCSN is available in almost 2 MILLION more homes than just a few years ago, but Indycar STILL gets less total viewers than it did just a few years ago when NBC took over Versus. Attendance and ratings cratered with the end of season races (just when the title battle got "interesting" HAH!__________And now...new race in Basilia, where Miles celebrated the "rich history" of Indycar racing there. Rich history? What, 7 events in the 100 years of AOW? Yep, some history. Well, at least its an oval. It's not??? Are you kidding me??? Gosh darn road racin furriners.

      4. PURITY RAY LOAN OFFER........ Have you been denied by your banks,or are you in need of of an urgent loan to pay of your bills we are capable of giving loans @ cheaper rate to interested individuals, student, companies and members of the public in need of finance to settle bills, we do offer considerable loans which you can count on. For more information on our various types of loan,then you will have to contact PURITY RAY LOAN FIRM, to help you achieve your desire LOAN APPLICATION FORM TO BE FILLED BORROWERS INFORMATION * Full name:………………………. * SEX * ……………………………. * Country………………………….. * State:……………………………. * Land:…………………………….. * Occupation:…………………….. * phone number:…………………. * Telephone: ………………………….. * Age:………………………………. * Amount needed as loan:……… * Loan Duration:………………….. * Propose of Loan:……………….. * Annual revenue:………………… * Monthly Income:……………….. * Guarantee:………………………. * Payment: monthly or annually Email.....purityrayloanfirm@gmail.com Thank you and God bless Mr Purity Ray PURITY RAY LOAN FIRM we tend to serve you better

      5. Problem: most of the people responding to this article don't know about this service AT ALL! Why? Lack of awareness. This isn't IndyGo. This is CIRTA: might as well be the mattress company because they are asleep at the wheel - something like 3 directors over the last year? Playing with federal grant money is great! This "region" wants commuter rail service, has spent MILLIONS on Transportation studies yet can't even support a commuter bus line? This is largely for suburban riders to get to downtown - not for "service people to work in our hotels and restaurants" ! Get your head out of your backside!! These are professionals, students etc. that don't want to fight traffic, save some money on parking, gas, stress.... if CIRTA would put their federal money into widely promoting the sevive to Greenwood, Fishers & Carmel instead of finding directors and studies - this would be a successful service. Our family uses(d) it daily for the last several years - but the recent uncertainty & now unreliability due to cuts from Carmel has been a problem. Now, costs us an additional $350/month for gas & parking ( $4200/year) plus vehicle wear, service, environmental impact ... YES - this REGION needs this this type of service in order to keep growing and getting the people it needs to fill skilled positions in downtown Indianapolis. Think outside of your own car !!!