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Founded in 2016, this award-winning residential design-build firm serves Colorado’s Front Range, specializing in ADUs, additions, and mid- to high-end residential remodeling. The business has built a strong reputation for quality, transparency, and sustainability-focused construction and has won several recent regional awards. The Company operates a vertically integrated model with in-house architecture, design, and permitting, supported by a consistent network of trusted subcontractors. Its structured “Concept-to-Build” process requires clients to engage in a paid design phase prior to construction, resulting in improved project definition, reduced execution risk, and a more predictable and financeable revenue stream. The business generates strong and consistent cash flow, producing approximately $758K in Seller’s Discretionary Earnings and $638K in adjusted EBITDA in 2025. Residential gross margins are approximately 25%, supported by disciplined project selection, pricing control, and improved cost management. The Company has experienced significant growth following its transition to a residential-focused model, with revenue increasing from approximately $2.5M to $5.4M over the past three years. It enters 2026 with approximately $4.2M in contracted backlog under signed design-build agreements, providing strong visibility into near-term revenue. Additional contributions from in-progress projects and historically consistent change order activity are expected to support total 2026 performance in line with or modestly exceeding 2025, with continued margin stability. Supported by an experienced team and documented systems, this opportunity is well suited for an owner-operator with construction experience or a strategic acquirer seeking a scalable platform in a high-demand residential segment.
Why we like it
- Earnings Quality: The business generates $758K in SDE on $5.7M revenue with 25% gross margins, supported by a paid design phase model that reduces project risk and improves cash flow predictability. The structured Concept-to-Build process creates better project definition and execution compared to traditional construction bidding models.
- Durability & Moat: Vertically integrated model with in-house architecture, design, and permitting creates significant barriers to competition and customer switching costs. The award-winning reputation and focus on sustainability aligns with long-term market trends in high-end residential construction.
- Market Tailwinds: ADU market is experiencing explosive growth driven by housing affordability crisis and regulatory changes allowing accessory dwelling units in most municipalities. Colorado's Front Range represents one of the fastest-growing residential markets in the country with strong demographics and income levels.
- Operator Advantage: $4.2M contracted backlog provides strong revenue visibility into 2026, while documented systems and experienced team reduce key-person risk. The residential focus and premium positioning should provide pricing power in inflationary construction environment.
How to improve it
- Sales Process Optimization: Implement CRM system to track leads through the paid design phase and measure conversion rates from design to construction contracts. Systematize the sales process to reduce dependence on founder relationships and improve predictable lead generation.
- Capacity Expansion: Leverage the documented systems and strong backlog to add project managers and expand the trusted subcontractor network. The $4.2M backlog suggests demand exceeds current capacity, creating immediate scaling opportunity.
- Digital Marketing Investment: Build content marketing around ADU expertise and sustainability focus to capture organic search traffic and establish thought leadership. The award-winning reputation provides credibility for digital marketing initiatives in a fragmented local market.
- Pricing Power Enhancement: Implement value-based pricing for design services and develop standardized ADU packages to improve margins on smaller projects. The paid design phase model already demonstrates pricing power that can be further leveraged.
- Technology Integration: Deploy project management software and client portals to improve communication and reduce administrative overhead. Better project tracking and client communication can support higher project volumes without proportional staff increases.
- Strategic Partnerships: Develop relationships with real estate agents, architects, and financial advisors who work with high-net-worth homeowners seeking ADUs for rental income. These partnerships can provide consistent lead flow in the target market segment.
- Team Development: Cross-train key employees in multiple disciplines to reduce single-point-of-failure risks and improve operational flexibility. Document all processes to support future scaling and reduce training time for new hires.
- Financial Controls: Implement job costing software and weekly project profitability reporting to identify margin improvement opportunities in real-time. Better financial visibility can support more aggressive growth while maintaining the 25% gross margin target.
Diligence notes
- Subcontractor Dependency: Verify the stability and capacity of the trusted subcontractor network, including backup options for critical trades. Construction businesses are often vulnerable to key subcontractor relationships and labor availability constraints.
- Backlog Quality: Analyze the $4.2M contracted backlog for project mix, timeline, and margin profile to confirm revenue predictability claims. Verify that design phase payments are secured and examine historical change order patterns and collection rates.
- Regulatory Risk: Assess exposure to ADU regulation changes and permitting process modifications that could impact the business model. Review current permit approval times and relationships with local building departments across service territories.
- Key Person Analysis: Evaluate the founder's role in client relationships, design work, and business development to understand transition requirements. Construction businesses often have significant key person risk that may not be fully captured in documented systems claims.