Hearthstone Homes Business News

arkan · Post by **arkan** » Tue Dec 27, 2011 1:17 pm

I know some subcontractors (won't say what kind to avoid them getting "burned") that have been informed that as of the 1st of the year Hearthstone homes will be shutting down. They are having the meeting with staff this week. I have heard this rumor from two different sources. They intend to finish houses that they have started, but not move on any that are not framed. The expectation is that they will dissolve completely and NOT be honoring new home warranties. I have a friend who is buying a Hearthstone in the next couple of days. I warned them, but they are going ahead with it anyways.

Hearthstone folding rumor has hit before, but that had to do with a combination of being sued and with a planned contraction of their company due to economic downturn. These current rumors seems much more credible considering the source.

nalek · Post by **nalek** » Wed Dec 28, 2011 4:03 pm

I've heard the same, I would suspect it to be true this time.

bob the builder · Post by **bob the builder** » Fri Dec 30, 2011 7:48 am

As a sub for them, this is not true. Â Call them Tuesday morning and see if they are open. Â my crews will be out there

charlie123 · Post by **charlie123** » Fri Dec 30, 2011 1:35 pm

I have heard from several sources that the rumor is true. Â I was actually waiting for this rumor to be posted. Â My info is from the banking side. Â They have been trying to salvage themselves for quite a while now and finally figured out it's time. Â I feel for those who rely on hearthstone for work.

Linkin5 · Post by **Linkin5** » Fri Dec 30, 2011 1:55 pm

http://www.wowt.com/news/headlines/Hear ... 00483.html

So their VP is stating that they are filing several liens but not declaring bankruptcy.

charlie123 · Post by **charlie123** » Fri Dec 30, 2011 7:25 pm

The article on WOWT is certainly alarming! The statement "He said the construction liens are "common in the business" reminds me of when I built my home with Gateway Homes a few years ago right before they went bankrupt. All of a sudden, liens started popping up on my house and then a week later, it was all over the news that Gateway filed for bankruptcy and owed hundreds of thousands of dollars to several contractors and suppliers. This situation certainly appears to be very familiar.

Construction liens aren't common at all...it is a clear indicator that people are not getting paid and that a builder is on the verge of bankruptcy.

I will say that Celebrity homes is doing very well and I hope that they have an opportunity to finish up some of the subdivisions that Hearthstone will leave behind so the people that live in the remaining subdivisions aren't impacted from a home value perspective.

I feel for those who are losing out on their warranty as well. I also was a victim of this with Gateway Homes and had to pay approximately 4k to have work done later on that would have been covered under the warranty. I also lost a decent amount of money as I had to hire an attorney to get rid of the liens that were placed on my home in order to refinance---which will possibly impact those who recently closed on a home with Hearthstone as the contractors likely weren't paid and will place liens.

hearthstone sub · Post by **hearthstone sub** » Sat Dec 31, 2011 1:28 pm

Hearthstone is paying us as the money comes in. There are many subs owed upwards of 200,000 to 2.6 million that they don't know if they will see the money. I heard this straight from John Smith's mouth. They say an outside company is buying them. They are out of cash and the credit line has been hit. Not looking good for them. Don't be surprised to see boarded up houses soon. The framer already quit.

_S33 · Post by **_S33** » Sat Dec 31, 2011 3:10 pm

These large builders always had too much leverage over the smaller contractors. I don't feel bad for hearthstone in the least, they used and abused their contractors, and had them working on a "trust us, we'll pay ya" basis. A good friend of mine was a framing contractor for another home builder just like hearthstone, and it was almost impossible for him to keep a steady cash-flow because of this very same thing.

See hearthstone and their cardboard homes later.

Post by **Coyote** » Wed Jan 04, 2012 7:36 pm

Builder HearthStone 'has a plan' to survive

Steve Jordon WORLD-HERALD STAFF WRITER wrote:In response to slow home sales, the company has cut staff and extended the cycles of payments to contractors. HearthStone built 300 houses in the Omaha area last year, down from a peak of 962 in 2007. The company cut its workforce in the past four years from about 120 people to 28, Smith said, but expects to build and sell another 275 to 300 homes this year.

Guest · Post by **Guest** » Wed Jan 04, 2012 8:43 pm

Best news I have ever heard.

Guest · Post by **Guest** » Thu Jan 05, 2012 8:06 am

Better news would be celebrity shutting down. Â those are like a cancer of Omaha that just keeps growing bigger and bigger.

HskrFanMike · Post by **HskrFanMike** » Thu Jan 05, 2012 12:52 pm

Anonymous wrote:Better news would be celebrity shutting down. those are like a cancer of Omaha that just keeps growing bigger and bigger.

20 years ago, they had some nice homes. Â But the last 10 years or so, they've been mostly meh at best.

arkan · Post by **arkan** » Thu Jan 05, 2012 3:00 pm

HskrFanMike wrote:
Anonymous wrote:Better news would be celebrity shutting down. those are like a cancer of Omaha that just keeps growing bigger and bigger.
20 years ago, they had some nice homes. But the last 10 years or so, they've been mostly meh at best.

They come in at a certain price point, and they serve a purpose in the market.

S33 · Post by **S33** » Thu Jan 05, 2012 3:35 pm

Minus the fact that they treat their contractors like expendable nuisances, they do offer decent starter homes for the younger crowd. Gotta give them that, even though I still think they are over-priced.

Guest · Post by **Guest** » Thu Jan 05, 2012 4:05 pm

" they do offer decent starter homes for the younger crowd"

We bought, and built, our first house when I was 28 years old. Â At the time we looked at celebrity but I would not consider buying one because they were to cheaply made and there is to many of them. Â I can't stand them. Â Of course at 28 I was able to afford a $160,000 home which was in 1998. Â I do understand they fill a nitch for younger people wanting to buy a home, but I still say they build way to many of them in West Omaha. Â For those on this forum (I am not one) that do not like the suburban parts of town this is just fuel for that fire in my opinion.

jessep28 · Post by **jessep28** » Thu Jan 05, 2012 6:42 pm

Just think that Celebrity Homes provides a valuable service to those looking for a military base housing experience without the commitment of active duty!

Big E · Post by **Big E** » Thu Jan 05, 2012 11:51 pm

Nitch.

cdub · Post by **cdub** » Fri Jan 06, 2012 8:20 am

I really like that Hearthstone has tried to include energy efficiency in their building. Â They have also been working on some townhouse stuff that they havent been able to get going (probably because of the money problems). Â Trust me that Omaha is better with them in business, for a variety of reasons.

thenewguy · Post by **thenewguy** » Fri Jan 06, 2012 8:27 am

Big E wrote:Nitch.

thought i was the only one for a minute there...

Zilla · Post by **Zilla** » Fri Jan 06, 2012 8:48 am

They just put in a new street in our neighborhood and broke ground on a new house yesterday. Â I wonder if this is only effecting certain subdivisions?

arkan · Post by **arkan** » Fri Jan 06, 2012 12:28 pm

jessep28 wrote:Just think that Celebrity Homes provides a valuable service to those looking for a military base housing experience without the commitment of active duty!

Ha.
I have lived in MANY Â base housing units, and am quite familiar with the stuff put in the local military housing and Celebrity stuff is a step above the govt. housing. Not a HUGE step, but it is not the lowest available.

hs-sub · Post by **hs-sub** » Wed Jan 11, 2012 10:06 am

hearthsone isnt going anywhere, if anything they will begin growing...again. the framers are back, aa-american and shamrock concrete are gone...and good ridence (they both suck).
hearthsone has been bought out by a company out of kc. they plan on reviving hearthstone homes, making it profitable again, and expanding it to kc, des moines, and other cities in the midwest.

Guest 123 · Post by **Guest 123** » Wed Jan 11, 2012 10:44 am

How do you know this hs-sub?? From what I gather someone was supposed to buy them out but backed out so they are looking for someone new.

hs-sub · Post by **hs-sub** » Wed Jan 11, 2012 12:52 pm

from my boss Â who has been in meetings (both with hearthstone and the new owners) almost dailey for the last month. also i just did work on a house that framing was just completed yesterday. framing crews are out there, which means there will be work to do. its going to take a while to regain momentum, Â but hearthstone homes aint done yet. as far as them backing out, thats incorrect, the deals all but done. my appologies if this is disappointing to you....(not really)

iliveinone · Post by **iliveinone** » Wed Jan 11, 2012 1:07 pm

ive seen crews working in hearthstone areas for a couple weeks now...

Guest 123 · Post by **Guest 123** » Wed Jan 11, 2012 8:05 pm

That's good news...lol I'm not sure who you think I am but I'm a potential buyer who doesn't want to get a raw deal, that's all.

HA! · Post by **HA!** » Wed Jan 11, 2012 11:14 pm

hs-sub wrote:from my boss who has been in meetings (both with hearthstone and the new owners) almost dailey for the last month. also i just did work on a house that framing was just completed yesterday. framing crews are out there, which means there will be work to do. its going to take a while to regain momentum, but hearthstone homes aint done yet. as far as them backing out, thats incorrect, the deals all but done. my appologies if this is disappointing to you....(not really)

hs-sub obviously was told this by his boss to keep working. The only money being paid out is coming from out side funds other than banks at this point. Did the house you were working in have windows?

hs-sub · Post by **hs-sub** » Thu Jan 12, 2012 7:33 am

"hs-sub obviously was told by his boss to keep working"...like thats a bad thing. lol
"the only money being paid out is coming from side funds other than banks"...and you know this how?
"did the house you were working in have windows?"...yes it did.

it seems kinda strange so many are rooting against hearthstone....if they did go under (which i highly doubt) there would be alot more people in the unemployment line.
go ahead and keep hating if thats how you choose to live your life...

Guest 123 · Post by **Guest 123** » Thu Jan 12, 2012 9:42 am

I'm not rooting against HearthStone or any other company for that matter. I really like them better (because there are more options) than another builder here in Omaha I just don't want to get stung. I know you are contracted to work with them hs-sub but you come off as having more than just a sub contracting interest in the company. I want REAL information not hidden agenda's, that's why I came to this forum. Now I'm uncertain as to whether this site will give me any piece of mind at all. Either way my comments are no strike against you or HearthStone or anyone else at all.

hs-sub · Post by **hs-sub** » Thu Jan 12, 2012 10:42 am

im not referring to you (guest123)...i hope you find the home your looking for. if its a hearthstone..GREAT!
i was referring to HA's post.
i have no hidden agenda...getting to work is my agenda...thats it. all ive tried to do is add what i know to this thread.

Read the paper · Post by **Read the paper** » Thu Jan 12, 2012 11:30 am

Guest 123 wrote:I'm not rooting against HearthStone or any other company for that matter. I really like them better (because there are more options) than another builder here in Omaha I just don't want to get stung. I know you are contracted to work with them hs-sub but you come off as having more than just a sub contracting interest in the company. I want REAL information not hidden agenda's, that's why I came to this forum. Now I'm uncertain as to whether this site will give me any piece of mind at all. Either way my comments are no strike against you or HearthStone or anyone else at all.

The truth is in the liens. There is alot of money HearthStone homes owes its subcontractors. On houses that closed more than 3 months ago.... The builder isn't paying their bills on time. It really is too bad people are living in a house that a sub contractor has to warranty yet hasn't been paid for it. You don't buy a car and not have the wheels paid for yet. You could buy the house but who knows if it will be built. For the sake of the Omaha economy and workforce hopefully they do continue it provides many jobs. I wouldn't buy a company with that much debt. Especially in these hard times. Seems cheaper to start from scratch.

Guest · Post by **Guest** » Fri Jan 13, 2012 1:09 am

If there are any open or unsettled lawsuits a purchase can not take place. Â And let me personally assure you that there are open lawsuits taking place. Â So until that is settled there can be no final sale of Hearthstone Homes. Â Those involved in the case will be the first to know when a sale can be done as their lawsuit will have to be settled by that point.

jessep28 · Post by **jessep28** » Fri Jan 13, 2012 1:32 am

Anonymous wrote:If there are any open or unsettled lawsuits a purchase can not take place. And let me personally assure you that there are open lawsuits taking place. So until that is settled there can be no final sale of Hearthstone Homes. Those involved in the case will be the first to know when a sale can be done as their lawsuit will have to be settled by that point.

Lawsuits or are you talking about liens?

joeglow · Post by **joeglow** » Fri Jan 13, 2012 11:04 am

Anonymous wrote:If there are any open or unsettled lawsuits a purchase can not take place.

-Sure you can. Â That is how a corporation works. Â You purchase the stock of the company and everything passes on to the new owner (including existing liabilities). Â Now, if you can prove that the owners pierced the corporate veil, that is another issue. Â However, you almost never see that.

on8green · Post by **on8green** » Wed Jan 18, 2012 10:15 am

100 liens in two weeks is not common in any industry. Hearthstone Homes has on Public Record more negative issues than praise.
I have witnessed first hand a "Villa" by Hearthstone that was assembled by 5 men in 6 days. Walls, floors all components were delivered
on flatbed truck then put in place with a crane. Totally enclosed including roof and shingles , one exterior wall that was stopped half way up with vinyl
siding now sits and has since December 21st. Â Think about it. Â If there was no merit in the Rumor of financial distress this "home" would not
be abandoned with no subcontractors working on it for over a month. Â After doing some research and, more importantly watching the process and the product, no way would I wager any amount of money on this company. Good luck to those that do!

Guest · Post by **Guest** » Wed Jan 18, 2012 3:14 pm

are u talking about the villas in palisades or iron horse? because the only two villas under construction in the palisades had people working on them today.

Guest · Post by **Guest** » Wed Jan 18, 2012 4:37 pm

I have not visited the Palisades. As a matter of fact, I have not visited many of the developments that Hearthstone has filed building permits. If you saw people working today on the only 2 villas at Palisades, I think it would be safe to say that those particular projects have subs that are still rolling the dice or may be contracted by one of the many different LLC's that have aligned themselves with Hearthstone. Â After visiting Iron Horse web site it clearly defines the development as "Upscale". It depicts and further states homes starting in the $300's and up. It is difficult to connect these two entities. Iron Horse promotes itself as a premier, upscale "one of a kind" elite community.
If you take the time to visit Hearthstone Homes Omaha web site, Â their primary selling feature is the possibility of getting you into a new home with a credit score of 580. These two types of promotion clearly appeal to different life styles and income levels. Â In no way do they fit together.
Hearthstone Homes serves a purpose. So does Wal Mart and Dollar General etc. Â
To answer your specific question - the Villa mentioned still sits with no work done to it since Dec. 21st. If it is a
"spec" Villa or a pre-sold "villa" it just does not make any sense.

Guest 123 · Post by **Guest 123** » Thu Jan 19, 2012 3:26 pm

I decided against going with HearthStone for many of the reasons that you all have listed. Thank you for all your input (good or bad), it's all helped me make a more informed decision on our first home purchase. A friend of mine's sister was contracted with HearthStone and the house was 2/3 built already but work had stopped on it and they said it would be delayed at least 2 months past their original closing date. She decided to cancel with them because of this and went and bought a used home that she's happy with. Just another fyi for any other potential buyers out there.

guest1379 · Post by **guest1379** » Fri Jan 20, 2012 9:33 pm

FWIW. Â I too am having a home built by Hearthstone. I have had contractors at my house everyday for the last week to 10 days. Â a-1 heating and a/c had 3 trucks at the site today plus the roof was finished today. Â Windows and doors have all been installed. Â They have continued to work with me and although they did originally tell me my closing date was going to be delayed it ended up only being delayed by 8 days and it is still within the 3 week closing window they originally gave me. Â So far they have been very open and honest with me about any questions I have had and didn't even blink an eye when I indicated I wanted to withhold my last earnest deposit until they gave me a firm closing date.

Guest · Post by **Guest** » Mon Jan 23, 2012 3:42 pm

appearantly there wasnt enough "elite" people buying homes in iron horse, so hearthstone must have bought some of the lots in iron horse....same goes for the palisades...

Omaha Forums

Hearthstone Homes Business News

Hearthstone Homes Business News

Not true

Rumor

they aint done yet

hs-sub is correct

Gamble on a home purchase?

FYI