Eastside Custom Home Builder, King County WA Luxury Residential

$4.9M

Revenue

$850K

SDE

1.6x

Multiple

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Full Editorial Writeup

This is a King County, Washington custom home builder that has spent more than a decade constructing bespoke, high-end residences on the Eastside, one of the wealthiest and most supply-constrained markets in the Pacific Northwest. The company serves a discreet clientele of high-net-worth homeowners, taking on new builds, remodels, additions, guest houses, family wings, and luxury kitchen and bath renovations. Projects typically start at $800 per square foot plus a 20% cost markup, and it is common for jobs beginning in the $300,000 to $400,000 range to grow 20% to 30% as clients expand their vision mid-build.

The operating model is deliberately lean and equipment-light. The core team is just three people: two full-time finish carpenters and a dedicated bookkeeper, supported by a reliable subcontractor network covering electrical, plumbing, drywall, siding, roofing, and painting, with those subs allocating 30% to 40% of their time exclusively to this builder. The business runs out of a home office with no website and no public-facing advertising, relying entirely on reputation and referral in a market where trust and discretion are the currency.

At roughly $4.9 million in revenue and $850,000 of cash flow, the business is priced at $1.4 million, a 1.65x cash flow multiple with seller financing on the table. Revenue has normalized down from a 2024 peak as homeowners shift toward remodels over full custom builds, which the seller frames as a sustainable run rate rather than a decline. The combination of a cheap headline multiple, a durable luxury geography, and an owner committed to a six-month transition makes this a classic operator-dependent services buy worth close scrutiny.

Why we like it

The headline math is attractive: $850,000 of cash flow on a $1.4 million ask is 1.65x, well below typical construction multiples, and the seller will finance part of the price. At a roughly 17% markup structure ($800/sqft plus 20% cost) the model throws off real cash without heavy capital tied up in equipment or real estate.
The moat is geography plus reputation. The Eastside (Bellevue, Medina, Mercer Island area) is one of the most affluent and land-constrained luxury markets in the country, and a decade-plus of referral-driven work with discretion-minded, high-net-worth homeowners is hard for a newcomer to replicate quickly.
There is a clear pipeline dynamic that favors margin: jobs routinely balloon 20% to 30% as clients expand scope mid-build, which lifts revenue per project on work already sold. Subs allocate 30% to 40% of their time exclusively to the company, giving the buyer coordination and quality control most small builders lack.
The operator upside is unusually obvious. This business has no website and does no public-facing marketing, so a buyer who adds even basic digital presence, a portfolio site, and referral systematization has a credible path to rebuild toward the 2024 peak rather than settling at the current normalized run rate.

How to improve it

Build a professional website and portfolio in the first 90 days. The current owner does zero public marketing, so photographing completed luxury builds and publishing a credible online presence is the single fastest lever to reopen the top of the funnel in a market full of buyers searching for high-end builders.
Systematize the referral engine and formalize the client pipeline into a CRM. Reputation-driven lead flow is fragile when it lives in one person's head, so capturing past clients, architects, designers, and realtors into a tracked referral program protects revenue through the ownership transition.
Lock in the subcontractor network with written agreements or preferred-vendor terms. The subs give this business 30% to 40% exclusivity informally, and converting that into documented commitments (or bringing a second core crew in-house) reduces execution risk on the concurrent projects that drive volume.
Push the mix back toward full custom builds, not just remodels. Revenue normalized down because homeowners shifted to remodels, but new builds carry larger tickets and the same markup, so a targeted sales effort toward high-value land-holders and teardown buyers can lift average project size.
Institutionalize project management and job costing before scaling. Cost-plus at 20% only works if actual costs are tracked precisely, so implementing rigorous job-cost software and change-order discipline protects the margin on jobs that expand 20% to 30% mid-build.
Retain and cross-train the two finish carpenters early with retention incentives. In a three-person shop those two employees hold significant execution knowledge and client trust, so bonuses or profit-sharing tied to a multi-year stay de-risk the transition materially.
Consider a modest transition to commercial space with storage as volume grows. The home-office setup caps how many concurrent large projects can be coordinated, and a proper base allows the buyer to add crew, inventory, and a second project manager to grow beyond the current run rate.

Diligence notes

Scrutinize the revenue normalization story closely. Management calls the drop from the 2024 peak a shift to a sustainable run rate, but you need three to five years of monthly revenue, backlog, and signed contracts to confirm whether this is a stable base or the front end of a real decline tied to a cooling luxury market.
Verify the $850,000 cash flow with tax returns and a full add-back schedule. Custom builders often report cash flow before accounting for owner's own labor, warranty reserves, and project overruns, so confirm that the SDE is clean and that no unfinished-job liabilities are being netted out.
Examine the signed backlog and deposit position. In cost-plus custom building, revenue is only as good as the contracts in hand, so quantify how many jobs are under contract, their stage of completion, collected deposits, and any exposure to change orders or client disputes.
Assess how much of the business walks out with the owner. With no website, no advertising, and referral flow anchored to one person's relationships with clients and subs, the six-month transition may be insufficient, so map exactly which relationships and lead sources are owner-dependent.
Confirm licensing, bonding, insurance, and warranty exposure. Washington residential builders carry ongoing liability for construction defects, so review the L&I contractor registration, bond, general liability and workers comp coverage, and any open or historical warranty or litigation claims on completed high-end homes.
Test subcontractor dependence and pricing. The 30% to 40% exclusivity is informal and could erode after a sale, so interview key subs on their willingness to continue, their capacity, and whether their pricing to this builder is below market in a way that flatters current margins.

Source

Originally listed on BizBuySell. View original listing →