Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 10, 2021 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Transition Report | false | |
Entity File Number | 001-39916 | |
Entity Registrant Name | DREAM FINDERS HOMES, INC. | |
Entity Central Index Key | 0001825088 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-2983036 | |
Entity Address, Address Line One | 14701 Philips Highway | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Jacksonville | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 32256 | |
City Area Code | 904 | |
Local Phone Number | 644-7670 | |
Title of 12(b) Security | Class A Common Stock, par value $0.01 per share | |
Trading Symbol | DFH | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Common Class A [Member] | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 32,295,329 | |
Common Class B [Member] | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 60,226,153 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 85,539,220 | $ 35,495,595 |
Restricted cash (VIE amounts of $2,854,685 and $8,793,201) | 181,851,145 | 49,715,553 |
Accounts receivable (VIE amounts of $1,872,199 and $1,288,359) | 31,845,905 | 24,927,903 |
Inventories: | ||
Construction in process and finished homes | 595,643,030 | 396,630,945 |
VIE owned land and lots | 20,708,390 | 40,900,552 |
Company owned land and lots | 50,140,666 | 46,839,616 |
Lot deposits | 156,605,165 | 66,272,347 |
Equity method investments | 7,343,797 | 4,545,349 |
Property and equipment, net | 3,825,299 | 4,309,071 |
Operating lease right-of-use assets | 12,665,167 | 14,219,248 |
Finance lease right-of-use assets | 232,917 | 335,791 |
Intangible assets, net of amortization | 1,995,000 | 2,660,003 |
Goodwill | 30,360,997 | 28,566,232 |
Deferred tax asset | 3,941,011 | 0 |
Other assets (VIE amounts of $2,460,576 and $0) | 49,884,074 | 18,262,036 |
Total assets | 1,232,581,783 | 733,680,241 |
Liabilities | ||
Accounts payable (VIE amounts of $655,511 and $1,315,582) | 72,306,819 | 37,418,693 |
Accrued expenses (VIE amounts of $7,284,286 and $9,977,268) | 65,740,570 | 67,401,055 |
Customer deposits | 109,780,976 | 59,392,135 |
Construction lines of credit | 440,000,000 | 289,878,716 |
Notes payable (VIE amounts of $2,697,031 and $8,821,282) | 3,913,031 | 29,653,282 |
Operating lease liabilities | 12,981,615 | 14,410,560 |
Finance lease liabilities | 242,623 | 345,062 |
Contingent consideration | 27,712,570 | 23,157,524 |
Total liabilities | 732,678,204 | 521,657,027 |
Commitments and contingencies (Note 6) | ||
Mezzanine Equity | ||
Total mezzanine equity | 154,892,565 | 76,231,451 |
Members' Equity | ||
Common members' equity | 103,852,646 | |
Total members' equity | 103,852,646 | |
Stockholders' Equity - Dream Finders Homes, Inc. | ||
Additional paid-in capital | 256,761,849 | |
Retained earnings | 64,552,332 | |
Non-controlling interests | 22,771,618 | 31,939,117 |
Total stockholders' and members' equity | 499,903,579 | 212,023,214 |
Total liabilities, mezzanine equity, members' equity and stockholders' equity | 1,232,581,783 | 733,680,241 |
Preferred Mezzanine Equity [Member] | ||
Mezzanine Equity | ||
Total mezzanine equity | 154,892,565 | 55,638,450 |
Common Mezzanine Equity [Member] | ||
Mezzanine Equity | ||
Total mezzanine equity | 0 | $ 20,593,001 |
Common Class A [Member] | ||
Stockholders' Equity - Dream Finders Homes, Inc. | ||
Common stock, value | 322,953 | |
Common Class B [Member] | ||
Stockholders' Equity - Dream Finders Homes, Inc. | ||
Common stock, value | $ 602,262 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Assets | ||
Restricted cash, VIE amounts | $ 181,851,145 | $ 49,715,553 |
Accounts receivable, VIE amounts | 31,845,905 | 24,927,903 |
Other assets, VIE amounts | 49,884,074 | 18,262,036 |
Liabilities | ||
Accounts payable, VIE amounts | 72,306,819 | 37,418,693 |
Accrued expenses, VIE amounts | 65,740,570 | 67,401,055 |
Notes payable | $ 3,913,031 | 29,653,282 |
Common Class A [Member] | ||
Stockholders' Equity - Dream Finders Homes, Inc. | ||
Common stock par value (in dollars per share) | $ 0.01 | |
Common stock shares authorized (in shares) | 289,000,000 | |
Common stock shares outstanding (in shares) | 32,295,329 | |
Common Class B [Member] | ||
Stockholders' Equity - Dream Finders Homes, Inc. | ||
Common stock par value (in dollars per share) | $ 0.01 | |
Common stock shares authorized (in shares) | 61,000,000 | |
Common stock shares outstanding (in shares) | 60,226,153 | |
Variable Interest Entity [Member] | ||
Assets | ||
Restricted cash, VIE amounts | $ 2,854,685 | 8,793,201 |
Accounts receivable, VIE amounts | 1,872,199 | 1,288,359 |
Other assets, VIE amounts | 2,460,576 | 0 |
Liabilities | ||
Accounts payable, VIE amounts | 655,511 | 1,315,582 |
Accrued expenses, VIE amounts | 7,284,286 | 9,977,268 |
Notes payable | $ 2,697,031 | $ 8,821,282 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | ||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | |||||
Revenues | $ 362,983,638 | $ 284,166,827 | $ 1,071,820,104 | $ 672,706,388 | |
Cost of sales | 303,386,434 | 240,701,064 | 898,012,615 | 575,683,384 | |
Selling, general and administrative expense | 32,434,505 | 19,856,843 | 88,086,880 | 55,071,469 | |
Income from equity in earnings of unconsolidated entities | (1,372,690) | (1,557,559) | (4,230,084) | (4,843,649) | |
Loss/(Gain) on sale of assets | (55,347) | (18,711) | (72,830) | (53,006) | |
Loss on extinguishment of debt | 0 | 0 | 697,423 | 0 | |
Other Income | |||||
Other | (4,849,766) | (252,461) | (7,000,248) | (1,171,675) | |
Paycheck Protection Program forgiveness | 0 | 0 | (7,219,794) | 0 | |
Other Expense | |||||
Other | 5,145,106 | 1,113,211 | 10,482,934 | 3,669,048 | |
Contingent consideration revaluation | 602,090 | 204,251 | 5,761,815 | (112,521) | |
Interest expense | 14,496 | 42,373 | 672,153 | 124,026 | |
Income before taxes | 27,678,810 | 24,077,816 | 86,629,240 | 44,339,312 | |
Income tax expense | (4,110,795) | 0 | (13,405,594) | 0 | |
Net income | 23,568,015 | 24,077,816 | 73,223,646 | 44,339,312 | |
Net income attributable to non-controlling interests | (4,432,516) | (1,516,755) | (9,393,623) | (3,474,116) | |
Net income attributable to Dream Finders Homes, Inc. | 19,135,499 | 22,561,061 | 63,830,023 | 40,865,196 | |
Comprehensive income | 23,568,015 | 24,077,816 | 73,223,646 | 44,339,312 | |
Comprehensive income attributable to non-controlling interests | (4,432,516) | (1,516,755) | (9,393,623) | (3,474,116) | |
Comprehensive income attributable to Dream Finders Homes, Inc. | $ 19,135,499 | $ 22,561,061 | $ 63,830,023 | $ 40,865,196 | |
Earnings per share | |||||
Basic (in dollars per share) | [1] | $ 0.20 | $ 0 | $ 0.69 | $ 0 |
Diluted (in dollars per share) | [1] | $ 0.20 | $ 0 | $ 0.69 | $ 0 |
Weighted-average number of share | |||||
Basic (in shares) | 92,521,482 | 0 | 92,521,482 | 0 | |
Diluted (in shares) | 92,695,197 | 0 | 92,658,878 | 0 | |
[1] | The Company calculated earnings per share (“EPS”) based on net income attributable to common stockholders for the period January 21, 2021 through September 30, 2021 over the weighted average diluted shares outstanding for the same period. EPS was calculated prospectively for the period subsequent to the Company’s initial public offering and corporate reorganization as described in Note 1 – Nature of Business and Significant Accounting Policies, resulting in 92,521,482 shares of common stock outstanding as of the closing of the initial public offering. The total outstanding shares of common stock are made up of Class A common stock and Class B common stock, which participate equally in their ratable ownership share of the Company. For the three and the nine months ended September 30, 2021, the diluted shares of common stock outstanding were 92,695,197. and 92,658,878, respectively. Diluted shares were calculated by using the treasury stock method for stock grants and the if-converted method for the conversion option to common stock related to preferred stock that is available in the event the company has redeemed the stock in October of 2026. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY - USD ($) | Redeemable Preferred Units Mezzanine [Member] | Redeemable Common Units Mezzanine [Member] | Common Units Members' [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total | Common Stock - Class A [Member] | Common Stock - Class B [Member] |
Beginning balance at Dec. 31, 2019 | $ 58,269,166 | $ 16,248,246 | |||||||
Beginning balance (in shares) at Dec. 31, 2019 | 49,555 | 5,774 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Contributions | $ 0 | $ 0 | |||||||
Contributions (in shares) | 0 | 1,236 | |||||||
Redemptions | $ (13,000,000) | $ 0 | |||||||
Redemptions (in shares) | (1,012) | 0 | |||||||
Distributions | $ (1,705,420) | $ 0 | |||||||
Net income (loss) | 6,794,352 | 2,854,600 | |||||||
Ending balance at Sep. 30, 2020 | $ 50,358,098 | $ 19,102,846 | |||||||
Ending balance (in shares) at Sep. 30, 2020 | 48,543 | 7,010 | |||||||
Balance at Dec. 31, 2019 | $ 56,502,464 | $ 30,471,371 | $ 161,491,247 | ||||||
Balance (in shares) at Dec. 31, 2019 | 76,655 | ||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||
Unit compensation | $ 697,054 | 0 | 697,054 | ||||||
Contributions from non-controlling interests | 0 | 3,692,625 | 3,692,625 | ||||||
Conversion of units | 0 | 0 | 0 | ||||||
Redemptions | $ 0 | 0 | (13,000,000) | ||||||
Redemptions (in shares) | 0 | ||||||||
Distributions | $ (12,908,913) | (5,277,210) | (19,891,543) | ||||||
Net income (loss) | 31,216,244 | 3,474,116 | 44,339,312 | ||||||
Balance at Sep. 30, 2020 | $ 75,506,849 | 32,360,902 | 177,328,695 | ||||||
Balance (in shares) at Sep. 30, 2020 | 76,655 | ||||||||
Beginning balance at Jun. 30, 2020 | $ 54,034,479 | $ 17,519,137 | |||||||
Beginning balance (in shares) at Jun. 30, 2020 | 48,549 | 7,010 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Contributions | $ 0 | $ 0 | |||||||
Contributions (in shares) | 0 | 0 | |||||||
Redemptions | $ (6,000,000) | $ 0 | |||||||
Redemptions (in shares) | (6) | 0 | |||||||
Distributions | $ (1,360,829) | $ 0 | |||||||
Net income (loss) | 3,684,448 | 1,583,709 | |||||||
Ending balance at Sep. 30, 2020 | $ 50,358,098 | $ 19,102,846 | |||||||
Ending balance (in shares) at Sep. 30, 2020 | 48,543 | 7,010 | |||||||
Balance at Jun. 30, 2020 | $ 68,854,097 | 31,409,923 | 171,817,636 | ||||||
Balance (in shares) at Jun. 30, 2020 | 76,655 | ||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||
Unit compensation | $ 249,554 | 0 | 249,554 | ||||||
Contributions | $ 0 | 134,297 | 134,297 | ||||||
Contributions (in shares) | 0 | ||||||||
Contributions from non-controlling interests | $ 0 | 0 | 0 | ||||||
Conversion of units | 0 | 0 | 0 | ||||||
Redemptions | $ 0 | 0 | (6,000,000) | ||||||
Redemptions (in shares) | 0 | ||||||||
Distributions | $ (10,889,706) | (700,073) | (12,950,608) | ||||||
Net income (loss) | 17,292,904 | 1,516,755 | 24,077,816 | ||||||
Balance at Sep. 30, 2020 | $ 75,506,849 | 32,360,902 | 177,328,695 | ||||||
Balance (in shares) at Sep. 30, 2020 | 76,655 | ||||||||
Beginning balance at Dec. 31, 2020 | $ 55,638,450 | $ 20,593,001 | 76,231,451 | ||||||
Beginning balance (in shares) at Dec. 31, 2020 | 48,543 | 7,010 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Contributions | $ 0 | $ 0 | |||||||
Contributions (in shares) | 0 | 0 | |||||||
Redemptions | $ 0 | $ 0 | |||||||
Redemptions (in shares) | 0 | 0 | |||||||
Distributions | $ (3,617,390) | $ (1,274,690) | |||||||
Net income (loss) | (157,451) | (91,043) | |||||||
Ending balance at Jan. 20, 2021 | $ 51,863,609 | $ 19,227,268 | |||||||
Ending balance (in shares) at Jan. 20, 2021 | 48,543 | 7,010 | |||||||
Balance at Dec. 31, 2020 | $ 103,852,646 | $ 0 | $ 0 | 31,939,117 | 212,023,214 | $ 0 | $ 0 | ||
Balance (in shares) at Dec. 31, 2020 | 76,655 | 0 | 0 | ||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||
Unit compensation | $ 0 | 0 | 0 | 0 | 0 | $ 0 | $ 0 | ||
Contributions | $ 0 | 0 | 0 | 0 | 0 | $ 0 | $ 0 | ||
Contributions (in shares) | 0 | 0 | 0 | ||||||
Contributions from non-controlling interests | $ 0 | 0 | 0 | 0 | 0 | $ 0 | $ 0 | ||
Conversion of units | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
Redemptions | $ 0 | 0 | 0 | 0 | 0 | $ 0 | $ 0 | ||
Redemptions (in shares) | 0 | 0 | 0 | ||||||
Distributions | $ (18,384,243) | 0 | 0 | (3,476,258) | (26,752,581) | $ 0 | $ 0 | ||
Net income (loss) | (995,588) | 0 | 0 | 210,340 | (1,033,742) | 0 | 0 | ||
Balance at Jan. 20, 2021 | $ 84,472,815 | 0 | 0 | 28,673,199 | 184,236,891 | $ 0 | $ 0 | ||
Balance (in shares) at Jan. 20, 2021 | 76,655 | 0 | 0 | ||||||
Beginning balance at Dec. 31, 2020 | $ 55,638,450 | $ 20,593,001 | 76,231,451 | ||||||
Beginning balance (in shares) at Dec. 31, 2020 | 48,543 | 7,010 | |||||||
Ending balance at Sep. 30, 2021 | $ 154,892,565 | $ 0 | 154,892,565 | ||||||
Ending balance (in shares) at Sep. 30, 2021 | 157,143 | 0 | |||||||
Balance at Dec. 31, 2020 | $ 103,852,646 | 0 | 0 | 31,939,117 | 212,023,214 | $ 0 | $ 0 | ||
Balance (in shares) at Dec. 31, 2020 | 76,655 | 0 | 0 | ||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||
Net income (loss) | 73,223,646 | ||||||||
Balance at Sep. 30, 2021 | $ 0 | 256,761,849 | 64,552,332 | 22,771,618 | 499,903,579 | $ 322,953 | $ 602,262 | ||
Balance (in shares) at Sep. 30, 2021 | 0 | 32,295,329 | 60,226,153 | ||||||
Beginning balance at Jan. 20, 2021 | $ 51,863,609 | $ 19,227,268 | |||||||
Beginning balance (in shares) at Jan. 20, 2021 | 48,543 | 7,010 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Reorganization transactions | $ (19,957,513) | $ (19,227,268) | |||||||
Reorganization transactions (in shares) | (15,400) | (7,010) | |||||||
Issuance of convertible preferred stock, net | $ 147,995,200 | ||||||||
Issuance of convertible preferred stock, net (in shares) | 150,000 | ||||||||
Contributions | $ 0 | $ 0 | |||||||
Contributions (in shares) | 0 | 0 | |||||||
Redemptions | $ (25,530,504) | $ 0 | |||||||
Redemptions (in shares) | (26,000) | 0 | |||||||
Distributions | $ 0 | $ 0 | |||||||
Net income (loss) | 521,773 | 0 | |||||||
Ending balance at Sep. 30, 2021 | $ 154,892,565 | $ 0 | 154,892,565 | ||||||
Ending balance (in shares) at Sep. 30, 2021 | 157,143 | 0 | |||||||
Balance at Jan. 20, 2021 | $ 84,472,815 | 0 | 0 | 28,673,199 | 184,236,891 | $ 0 | $ 0 | ||
Balance (in shares) at Jan. 20, 2021 | 76,655 | 0 | 0 | ||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||
Reorganization transactions | $ (84,472,815) | 122,842,781 | 0 | 0 | 0 | $ 212,553 | $ 602,262 | ||
Reorganization transactions (in shares) | (76,655) | 21,255,329 | 60,226,153 | ||||||
Issuance of common stock in IPO, net | $ 0 | 129,886,962 | 0 | 0 | 129,997,362 | $ 110,400 | $ 0 | ||
Issuance of common stock in IPO, net (in shares) | 0 | 11,040,000 | 0 | ||||||
Issuance of convertible preferred stock, net | 0 | 0 | 0 | 147,995,200 | $ 0 | $ 0 | |||
Issuance of convertible preferred stock, net (in shares) | 0 | 0 | |||||||
Unit compensation | $ 0 | 4,032,106 | 0 | 0 | 4,032,106 | $ 0 | $ 0 | ||
Contributions | $ 0 | 0 | 0 | 2,000,000 | 2,000,000 | $ 0 | |||
Contributions (in shares) | 0 | 0 | 0 | ||||||
Contributions from non-controlling interests | $ 0 | 0 | 0 | 0 | 0 | $ 0 | $ 0 | ||
Conversion of units | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
Redemptions | $ 0 | 0 | 0 | 0 | (25,530,504) | $ 0 | $ 0 | ||
Redemptions (in shares) | 0 | 0 | 0 | ||||||
Distributions | $ 0 | 0 | 0 | (17,084,864) | (17,084,864) | $ 0 | $ 0 | ||
Net income (loss) | 0 | 0 | 64,552,332 | 9,183,283 | 74,257,388 | 0 | 0 | ||
Balance at Sep. 30, 2021 | $ 0 | 256,761,849 | 64,552,332 | 22,771,618 | 499,903,579 | $ 322,953 | $ 602,262 | ||
Balance (in shares) at Sep. 30, 2021 | 0 | 32,295,329 | 60,226,153 | ||||||
Beginning balance at Jun. 30, 2021 | $ 6,703,460 | $ 0 | |||||||
Beginning balance (in shares) at Jun. 30, 2021 | 7,143 | 0 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||
Issuance of convertible preferred stock, net | $ 147,995,200 | ||||||||
Issuance of convertible preferred stock, net (in shares) | 150,000 | ||||||||
Contributions | $ 0 | $ 0 | |||||||
Contributions (in shares) | 0 | 0 | |||||||
Distributions | $ 0 | $ 0 | |||||||
Net income (loss) | 193,905 | 0 | |||||||
Ending balance at Sep. 30, 2021 | $ 154,892,565 | $ 0 | 154,892,565 | ||||||
Ending balance (in shares) at Sep. 30, 2021 | 157,143 | 0 | |||||||
Balance at Jun. 30, 2021 | $ 0 | 255,289,812 | 45,610,738 | 20,873,515 | 329,402,740 | $ 322,953 | $ 602,262 | ||
Balance (in shares) at Jun. 30, 2021 | 0 | 32,295,329 | 60,226,153 | ||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||||||
Issuance of convertible preferred stock, net | 0 | 0 | 0 | 147,995,200 | $ 0 | $ 0 | |||
Issuance of convertible preferred stock, net (in shares) | 0 | 0 | |||||||
Unit compensation | $ 0 | 1,472,037 | 0 | 0 | 1,472,037 | $ 0 | $ 0 | ||
Contributions | $ 0 | 0 | 0 | 2,000,000 | 2,000,000 | $ 0 | $ 0 | ||
Contributions (in shares) | 0 | 0 | 0 | ||||||
Contributions from non-controlling interests | $ 0 | 0 | 0 | 0 | 0 | $ 0 | $ 0 | ||
Conversion of units | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
Distributions | 0 | 0 | 0 | (4,534,413) | (4,534,413) | 0 | 0 | ||
Net income (loss) | 0 | 0 | 18,941,594 | 4,432,516 | 23,568,015 | 0 | 0 | ||
Balance at Sep. 30, 2021 | $ 0 | $ 256,761,849 | $ 64,552,332 | $ 22,771,618 | $ 499,903,579 | $ 322,953 | $ 602,262 | ||
Balance (in shares) at Sep. 30, 2021 | 0 | 32,295,329 | 60,226,153 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows from Operating Activities | ||
Net income | $ 73,223,646 | $ 44,339,312 |
Adjustments to Reconcile Net Income to Net Cash Used in Operating Activities | ||
Depreciation and Amortization | 3,024,576 | 2,433,385 |
Loss on sale of property and equipment | (72,830) | (53,006) |
Amortization of debt issuance costs | 1,266,784 | 1,560,795 |
Extinguishment of unamortized debt issuance costs | 506,466 | 0 |
Amortization of right-of-use operating lease | 2,494,013 | 2,416,233 |
Amortization of right-of-use financing lease | 102,874 | 118,769 |
Stock compensation expense | 4,032,108 | 697,054 |
Forgiveness of Paycheck Protection Program | 7,219,794 | 0 |
Deferred Tax Expense (Benefit) | (1,072,457) | 0 |
Income from equity method investments, net of distributions received | (2,234,084) | 468,221 |
Remeasurement of contingent consideration | 5,761,815 | 451,573 |
Changes in Operating Assets and Liabilities | ||
Inventories | (153,372,432) | (44,404,006) |
Lot deposits | (89,889,494) | (8,240,408) |
Other assets | (31,546,732) | (7,696,268) |
Accounts payable and accrued expenses | 14,333,342 | 3,472,247 |
Customer deposits | 45,447,126 | 9,860,987 |
Operating Lease ROU Assets | (939,932) | 0 |
Operating lease liabilities | (1,428,945) | (2,253,703) |
Net cash used in operating activities | (123,144,362) | 3,171,185 |
Cash Flows from Investing Activities | ||
Purchase of property and equipment | (1,695,476) | (2,264,476) |
Proceeds from disposal of property and equipment | 441,055 | 91,279 |
Investments in equity method investments | (1,200,000) | (246,036) |
Return of investments from equity method investments | 635,636 | 6,545,833 |
Business combinations, net of cash acquired | (22,694,250) | 0 |
Net cash provided used in investing activities | (24,513,035) | 4,126,600 |
Cash Flows from Financing Activities | ||
Proceeds from issuance of common stock | 142,982,406 | 0 |
Proceeds from issuance of convertible preferred stock, net | 148,500,000 | 0 |
Proceeds from construction lines of credit | 1,536,317,365 | 481,584,545 |
Principal payments on construction lines of credit | (1,386,702,546) | (448,127,304) |
Proceeds from notes payable | 2,836,323 | 6,516,185 |
Principal payments on notes payable | (24,929,519) | (9,924,595) |
Payment of debt issue costs | (7,505,214) | (1,435,378) |
Payment of equity issuance costs | (12,985,044) | 0 |
Payments on financing leases | (102,439) | (114,635) |
Payments on contingent consideration | (1,206,769) | 0 |
Contributions from non-controlling interests | 2,000,000 | 3,692,625 |
Distributions to non-controlling interests | 0 | (5,277,210) |
Distributions | (43,837,444) | (14,614,331) |
Redemptions | (25,530,506) | (13,000,000) |
Contribution from conversion of converted LLC units | 123,657,597 | 0 |
Conversion of LLC units | (123,657,596) | 0 |
Net cash provided by (used in) financing activities | 329,836,614 | (700,098) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 182,179,217 | 6,597,687 |
Cash, cash equivalents and restricted cash at beginning of period | 85,211,148 | 68,728,414 |
Cash, cash equivalents and restricted cash at end of period | 267,390,365 | 75,326,101 |
Non-cash Financing Activities | ||
Financed land payments to seller | 8,916,211 | 0 |
Leased assets obtained in exchange for new operating lease liabilities | 675,987 | 9,495 |
Equity issuance costs incurred | 905,965 | 0 |
Accrued distributions | 0 | 309,686 |
Non-cash Investing Activities | ||
Investment capital reallocation | (3,468,761) | 0 |
Total non-cash financing and investing activities | 7,029,402 | 319,181 |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | ||
Cash and cash equivalents | 85,539,220 | 42,081,890 |
Restricted cash | 181,851,145 | 33,244,211 |
Cash, cash equivalents and restricted cash at end of period | $ 267,390,365 | $ 75,326,101 |
Nature of Business and Signific
Nature of Business and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Nature of Business and Significant Accounting Policies [Abstract] | |
Nature of Business and Significant Accounting Policies | 1. Nature of Business and Significant Accounting Policies Nature of Business Dream Finders Homes, Inc. (the “Company” or “DFH, Inc.”) was incorporated in the State of Delaware on September 11, 2020. The Company was formed for the purpose of completing an initial public offering (“IPO”) of its common stock and related transactions in order to carry on the business of Dream Finders Holdings LLC, a Florida limited liability company (“DFH LLC”), as a publicly-traded entity. Pursuant to a corporate reorganization and completion of the IPO on January 25, 2021, the Company became a holding company for DFH LLC and its subsidiaries. In connection with the IPO, and pursuant to the terms of the Agreement and Plan of Merger by and among DFH, Inc., DFH LLC and DFH Merger Sub LLC, a Delaware limited liability company and direct, wholly owned subsidiary of DFH, Inc., DFH Merger Sub LLC merged with and into DFH LLC with DFH LLC as the surviving entity (the “Merger”). As a result of the Merger, all of the outstanding non-voting common units and Series A Preferred Units of DFH LLC converted into 21,255,329 shares of Class A common stock of DFH, Inc., all of the outstanding common units of DFH LLC converted into 60,266,152 shares of Class B common stock of DFH, Inc. and all of the outstanding Series B Preferred Units and Series C Preferred Units of DFH LLC remained outstanding. We refer to this and certain other related events and transactions, as the “Corporate Reorganization”. The Company successfully completed its IPO of 11,040,000 shares of Class A common stock (which included full exercise of the over-allotment option) at an IPO price of $13.00 per share. Shares of the Company’s Class A common stock began trading on the NASDAQ Global Select Market under the ticker symbol “DFH” on January 21, 2021, and the IPO closed on January 25, 2021. The Company is the sole manager of DFH LLC and owns 100% of the voting membership interest in DFH LLC. The accompanying statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for a complete set of financial statements. As such, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the Securities and Exchange Commission on March 30, 2021. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of DFH LLC, the Company’s wholly owned subsidiaries and its investments that qualify for consolidation treatment (see Note 9). All intercompany accounts and transactions have been eliminated in consolidation. There are no other components of comprehensive income not already reflected in net and comprehensive income on our Condensed Consolidated Statements of Comprehensive Income. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include all adjustments that are of a normal recurring nature and necessary for the fair presentation of our results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for the full year. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the valuation and impairment of goodwill, impairment of inventories and business combination estimates. Actual results could differ materially from those estimates. Accounts Receivable Accounts receivable are included on the Condensed Consolidated Balance Sheets and consist primarily of closing proceeds in transit. Of the total $31,845,905 balance as of September 30, 2021, $10,858,907 is related to proceeds in transit from various title companies, which is typically received in the first week of the subsequent month. Other Assets Other assets are included on the Condensed Consolidated Balance Sheets, and primarily consist of prepaid expenses, debt issuance costs and contract assets . Contingent Consideration In connection with the acquisition of Village Park Homes, LLC (“VPH”) in May 2019, the Company recorded contingent consideration based on estimated pre-tax income of the acquired entity for fiscal years 2019, 2020, 2021 and 2022. In connection with the acquisition of H&H Constructors of Fayetteville, LLC (“H&H”) in October 2020 (Note 2), the Company recorded contingent consideration based on estimated pre-tax income of the acquired entity for the fourth quarter of 2020, fiscal years 2021, 2022, 2023 and the first three quarters of 2024. The measurement of contingent consideration was based on projected cash flows such as revenues, gross margin, overhead expenses and pre-tax income and discounted back using the discounted cash flow method. The Company recorded the fair value of the contingent consideration as a liability on the respective acquisition dates. The estimated earn-out payments are subsequently remeasured to fair value at each reporting date based on the estimated future earnings of the acquired entities. The contingent consideration for each acquisition is scheduled to be paid out each year subsequent to the anniversary of the respective acquisition closing date. As of September 30 of expense of expense The Company measured contingent consideration related to the acquisition of H&H on October 5, 2020, which approximated the value at December 31, 2020 of $16,310,000. As of September 30 September 30 and $5,221,910 and $0 of expense for the nine months ended September 30, 2021 and 2020, As of September 30, 2021, total contingent consideration on the Consolidated Balance Sheets is $27,712,570. The Company’s contingent consideration related to acquisition earn-out payments is based on a percentage of pre-tax net and comprehensive income achieved by the acquired entity, and as such, is revised accordingly. In addition, the payment of the H&H earn-out is subject to certain minimum earnings thresholds which must be met by H&H before an earn-out payment occurs. Maximum potential exposure for contingent consideration is not estimable based on the contractual terms of the contingent consideration agreements, which allow for a percentage payout based on a potentially unlimited range of pre-tax income. In April 2021, the Company paid $1,206,769 in contingent consideration to H&H. Variable Interest Entities The Company participates in joint ventures that conduct land acquisition, land development and/or other homebuilding activities in various markets where the Company’s homebuilding operations are located. The Company’s investments in these joint ventures may create a variable interest in a variable interest entity (“VIE”), depending on the contractual terms of the arrangement. Additionally, the Company, in the ordinary course of business, enters into contracts with third parties and unconsolidated entities for the ability to acquire rights to land for the construction of homes. Under these contracts, the Company typically makes a specified earnest money deposit in consideration for the right to purchase land in the future, usually at a predetermined price. Consideration paid for these contracts is recorded as lot deposits on the Consolidated Balance Sheets. Pursuant to Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 810 and subtopics related to the consolidation of variable interest entities, the Company analyzes its joint ventures under the variable interest model to determine if such are required to be consolidated in the Company’s condensed consolidated financial statements. The accounting standard requires a VIE to be consolidated by a company if that company is determined to be the primary beneficiary. The primary beneficiary is defined as the entity having both of the following characteristics: 1) the power to direct the activities that most significantly impact the VIE’s performance, and 2) the obligation to absorb losses and rights to receive the returns from the VIE that would be potentially significant to the VIE. See Note 9 for a description of the Company’s joint ventures, including those that were determined to be VIEs, and the related accounting treatment. Management determines whether the Company is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion continually. To make this determination, management considers factors such as whether the Company should direct finance, determine or limit the scope of the entity, sell or transfer property, direct development or direct other operating decisions. Joint ventures for which the Company is not identified as the primary beneficiary are accounted for as equity method investments. The Company and its unconsolidated joint venture partners make initial and/or ongoing capital contributions to these unconsolidated joint ventures, typically on a pro rata basis, according to each party’s respective equity interests. The obligations to make capital contributions are governed by each such unconsolidated joint venture’s respective operating agreement and related governing documents. Partners in these unconsolidated joint ventures are unrelated homebuilders, land developers or other real estate entities. For distributions received from these unconsolidated joint ventures, the Company has elected to use the cumulative earnings approach for the Condensed Consolidated Statements of Cash Flows. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized are treated as returns on investment within operating cash flows and those in excess of that amount are treated as returns of investment within investing cash flows. The Company typically has obtained options to acquire portions of the land held by the unconsolidated joint ventures in which the Company currently participates. When an unconsolidated joint venture sells land to the Company, the Company defers recognition of its share of such unconsolidated joint venture’s earnings (losses) until the Company recognizes revenues on the corresponding home sale. At that time, the Company accounts for the earnings (losses) as a reduction (increase) to the cost of purchasing the land from the unconsolidated joint venture. The Company shares in the earnings (losses) of these unconsolidated joint ventures generally in accordance with its respective equity interests. In some instances, the Company recognizes earnings (losses) that differ from its equity interest in the unconsolidated joint venture. This typically arises from the Company’s deferral of the unconsolidated joint venture’s earnings (losses) from land sales to the Company. Non-Controlling Interests The equity interests in DFH Leyden LLC, DFH Amelia LLC, DFH Clover LLC, DFH Leyden II LLC, DFH MOF Eagle Landing LLC, DCE DFH JV LLC, DFH Capitol LLC, DFC Mandarin Estates LLC, DFC East Village LLC, DFC Wilford LLC, DFC Amelia Phase III LLC, DFC Sterling Ranch LLC and DFC Grand Landings LLC have been reflected as non-controlling interests in the Consolidated Balance Sheets. Income attributable to these non-controlling interests are presented in the Condensed Consolidated Statements of Comprehensive Income as net income attributable to non-controlling interests. Income Taxes We are a corporation subject to income taxes in the United States. Our proportional share of the Company’s subsidiaries’ provisions are included in our condensed consolidated financial statements. Our deferred income tax assets and liabilities are computed for differences between the asset and liability method and financial statement amounts that will result in taxable or deductible amounts in the future. We compute deferred balances based on enacted tax laws and applicable rates for the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized for deferred tax assets if it is more likely than not that some portion or all of the net deferred tax assets will not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine we would be able to realize our deferred tax assets for which a valuation allowance had been recorded, then we would adjust the deferred tax asset valuation allowance, which would reduce our provision for income taxes. We evaluate the tax positions taken on income tax returns that remain open and positions expected to be taken on the current year tax returns to identify uncertain tax positions. Unrecognized tax benefits on uncertain tax positions are recorded on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is more than 50 percent likely to be realized is recognized. Interest and penalties related to unrecognized tax benefits are recorded in income tax benefit. We have no uncertain tax positions that qualify for inclusion in our condensed consolidated financial statements. See “Note 10—Income Taxes.” Equity-Based Compensation Certain individuals on our executive-level management team are eligible for equity-based compensation, which is awarded according to the terms of individual contracts with those managers. Recent Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Report (Topic 848) |
Business Acquisitions
Business Acquisitions | 9 Months Ended |
Sep. 30, 2021 | |
Business Acquisitions [Abstract] | |
Business Acquisitions | 2. Business Acquisitions On October 5, 2020, the Company acquired 100% of the issued and outstanding membership interests in H&H, an operative homebuilder, for a purchase price of $44,096,448, net of a $1,710,275 in purchase price reduction related to customary closing adjustments. To fund the acquisition, the Company obtained a $20,000,000 bridge loan from Boston Omaha Corporation, LLC, with an interest rate of 14% per annum maturing on May 1, 2021, paid cash of $9,496,723 and agreed to pay contingent consideration estimated in the amount of $16,310,000 if H&H met certain financial metrics. Accordingly, the Company recognized the excess purchase price over the fair value of the net assets acquired as goodwill of $16,357,450. The goodwill arising from the acquisition consists largely of synergies and economies of scale from H&H’s operating footprint, which includes owned properties, increased future revenue and earnings from organic growth, new business opportunities and strategic initiatives. Transaction costs were not material and were expensed as incurred. The business combination was accounted for under the acquisition method, and the acquisition has been included in the Company’s consolidated results of operations since the date of acquisition. The fair value of assets acquired included cash of $10,956,359, other assets of $8,253,966, tradename of $2,660,000, inventories of $143,817,075 and liabilities assumed of $137,949,737, including $116,894,907 of construction lines of credit. On January 31, 2021, the Company completed the acquisition of Century Homes from Tavistock Development Company. The Company paid $35,500,000 to acquire 134 units under construction and 229 finished lots on which the Company has begun construction during The following unaudited pro forma condensed consolidated results of operations are provided for illustrative purposes only and have been presented as if the H&H and Century Homes acquisitions had occurred on January 1, 2020. This unaudited pro forma information should not be relied upon as being indicative of the historical results that would have been obtained if the acquisition had occurred on that date, nor of the results that may be obtained in the future. For the Three Months Ended September 30, For the Nine September 30 Unaudited Pro Forma 2021 2020 2021 2020 Total revenue $ 362,983,638 $ 369,580,015 $ 1,078,402,698 $ 892,504,467 Net and comprehensive income attributable to Dream Finders Homes, Inc. $ 19,135,499 $ 27,486,299 $ 64,151,994 $ 49,799,142 |
Construction Lines of Credit
Construction Lines of Credit | 9 Months Ended |
Sep. 30, 2021 | |
Construction Lines of Credit [Abstract] | |
Construction Lines of Credit | 3. Construction Lines of Credit On January 25, 2021, the Company entered into a $450,000,000 syndicated credit facility with Bank of America, N.A. (the “Credit Agreement”), and subsequently repaid $340,000,000 in outstanding debt, including the $20,000,000 bridge loan with Boston Omaha Corporation, LLC, and terminated all then-existing construction lines of credit. Under the Credit Agreement, the Company has the option to enter into Base Rate or LIBOR Rate contracts. The interest is payable based on the contract terms and is variable dependent on the Company’s debt to capitalization ratio, and applicable interest rates in the market (LIBOR Rate, Prime Rate, etc.). On September 8, 2021, the Company entered into a First Amendment and Commitment Increase Agreement (the “Amendment”) to its Credit Agreement. The Company exercised its right, and the Amendment provides, for an increase in the aggregate commitments under the Credit Agreement of up to $300,000,000. The aggregate commitments increase amounted to $292,500,000, and the total availability under the Credit Agreement reached $742,500,000. Three new lenders were added as additional lenders under the Credit Agreement. As amended by the Amendment, the Credit Agreement includes provisions for any existing lender to, at the Company’s request, increase its revolving commitment under the Credit Agreement, add new revolving loan tranches under the Credit Agreement or add new term loan tranches under the Credit Agreement, in all cases not to exceed an aggregate of $1,050,000,000. In addition, the Amendment clarified and modified certain definitions and covenants as more fully set forth therein, including modifications of certain financial covenants to facilitate the consummation of the MHI Acquisition (Note 15). On September 29, 2021, in connection with the closing of the MHI Acquisition, the Company exercised its right to further increase the aggregate commitments under the Credit Agreement to $817,500,000 and one lender was added as an additional lender under the Credit Agreement. Certain of the Company’s subsidiaries guaranteed the Company’s obligations under the Credit Agreement. The Credit Agreement will mature on January 25, 2024. As of September 30, 2021, the outstanding balance under the Credit Agreement was $440,000,000 and the effective interest rate was 3.75% During 2020, the effective interest rates for these lines of credit ranged from 3.81% to 10.33%. Our indebtedness as of December 31, 2020, was fully collateralized by homes under construction and, to a much smaller extent, finished lots. Under the Credit Agreement, the funds available are unsecured and availability under the borrowing base is calculated based on work-in-progress inventory. The outstanding lines of credit were paid in full during 2021 (in connection with the Company entering into the Credit Agreement), are no longer active and the Company does not intend to renew these facilities. The outstanding balance in the lines of credit were payable upon the delivery of the collateralized individual homes to end-home buyers. The Company capitalized $7,505,214 and $2,249,683 as of September 30, 2021 and December 31, 2020, respectively, and amortized $489,986 and $553,772 of debt issuance costs for the three months ended September 30, 2021 and 2020, and $1,266,784 and $1,560,795 of debt issuance costs for the nine months ended September 30 As of September 30, 2021 the company extinguished unamortized Debt Issuance Costs of $506,466. The Credit Agreement contains restrictive covenants and financial covenants. The Company was in compliance with all debt covenants as of September 30, 2021 and December 31, 2020. The Company expects to remain in compliance with all debt covenants over the next twelve months. |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2021 | |
Notes Payable [Abstract] | |
Notes Payable | 4. Notes Payable Notes payable consisted of the following as of September 30, 2021 and December 31, 2020: As of September 30, As of December 31, Maturity Date Payment Terms 2021 2021 Effective Rate 2020 2020 Effective Rate May 1, 2021 Interest is payable $ - - $ 20,000,000 14.00 % February 28, 2022 (1) Non-interest bearing 1,216,000 0.00 % 832,000 0.00 % April 1, 2022 (1) Interest is payable 717,642 12.50 % 1,735,161 12.50 % July 31, 2022 (1) Interest is payable 1,979,389 9.25 % 3,984,174 9.25 % March 25, 2023 (1) Interest is payable - - 3,101,947 5.00 % Total notes payable $ 3,913,031 $ 29,653,282 Less: Debt issuance costs from notes payable - (15,444 ) Notes payable, net of discount $ 3,913,031 $ 29,637,838 (1) These notes payable relate to our consolidated joint ventures and are non-recourse to the Company. Included within notes payable as of December 31, 2020, is a $20,000,000 bridge loan from Boston Omaha Corporation, LLC, which was utilized to fund a portion of the purchase price of the H&H Homes acquisition (Note 2). This note was paid off in January 2021. The principal balance on all notes payable is payable upon the sale of project specific collateral, and is collateralized by a real estate mortgage and a limited guarantee ensuring project completeness and the nonexistence of fraudulent acts. During the nine months ended September 30, 2021 and 2020, there were no material changes in the contractual maturities of our notes payable. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2021 | |
Inventories [Abstract] | |
Inventories | 5. Inventories Inventories consist of entitled raw land, finished lots, and construction in process (“CIP”), including capitalized interest. Raw land is purchased with the intent to develop such land into finished lots. Finished lots are held with the intent of building and selling a home. The asset is owned by the Company either as a result of developing purchased raw land or purchasing developed lots. CIP represents the homebuilding activity associated with both homes to be sold and speculative homes. CIP includes the cost of the developed lot as well as all of the direct costs incurred to build the home. The cost of the home is expensed on a specific identification basis when the home is closed to the end customer. As mentioned in Note 9, the Company consolidated several joint ventures that own land and finished lots. The Company owns a percentage of these joint ventures but does not own the underlying assets. The table below shows the Company’s owned real estate inventory and real estate inventory owned by the joint ventures. As of September 30, As of December 31, 2021 2020 Construction in process $ 595,643,030 $ 396,630,945 Finished lots and land 50,140,666 46,839,616 Inventories owned by the Company 645,783,696 443,470,561 Inventories owned by VIEs 20,708,390 40,900,552 Total inventories $ 666,492,086 $ 484,371,113 Percentage of inventories owned by the Company Construction in process 92 % 89 % Finished lots and land 8 % 11 % Interest is capitalized and included within each inventory category above. Capitalized interest activity is summarized in the table below for the three months ended 30, 2021 and 2020 and for the nine months ended September 30, 2021 and 2020. For the Three Months Ended September 30, For the Nine September 30 2021 2020 2021 2020 Capitalized interest at the beginning of the period $ 18,790,661 $ 27,094,143 $ 21,091,297 $ 25,335,924 Interest incurred 9,671,286 6,126,791 23,668,584 19,765,176 Interest expensed (14,496 ) (42,373 ) (672,153 ) (124,026 ) Interest charged to cost of contract revenues earned (5,600,052 ) (7,763,661 ) (21,240,329 ) (19,562,174 ) Capitalized interest at the end of the period $ 22,847,399 $ 25,414,900 $ 22,847,399 $ 25,414,900 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies In April 2020, the Company received proceeds from the Paycheck Protection Program (“PPP”) in the amount $7,220,207, which was classified in accrued expenses on the Consolidated Balance Sheets and accounted for as an in-substance grant as of March 31, 2021. The Company utilized all of the PPP proceeds to pay payroll and permissible operating expenses. On June 16, 2021, approximately the total amount of the PPP proceeds were forgiven by the Small Business Association (“SBA”). As such, the Company has included the PPP proceeds as other income on the condensed Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2021. |
Members' Equity, Mezzanine Equi
Members' Equity, Mezzanine Equity and Shareholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Members' Equity, Mezzanine Equity and Shareholders' Equity [Abstract] | |
Members' Equity, Mezzanine Equity and Shareholders' Equity | 7. Members’ Equity, Mezzanine Equity and Shareholders’ Equity Redeemable Common Units, Redeemable Preferred Units and Common Units All of the Company’s outstanding preferred units are classified in mezzanine equity as they can be redeemed in a deemed liquidation of the Company outside of the Company’s control. Additionally, prior to the Corporate Reorganization, the Company had certain non-voting common units that could have been redeemed outside the Company’s control, and therefore, were classified in mezzanine equity (the “Redeemable Common Units Mezzanine”). Pursuant to the Corporate Reorganization effective January 25, 2021, the Company is authorized to issue 350,000,000 shares of common stock, par value of $0.01 per share, consisting of 289,000,000 shares of Class A common stock and 61,000,000 shares of Class B common stock. The Board of Directors of the Company (the “Board of Directors”) has the authority to issue one or more series of preferred stock, par value $0.01 per share, without stockholder approval. As a result of the Corporate Reorganization, all of the outstanding non-voting common units and Series A Preferred Units of DFH LLC converted into 21,255,329 shares of the Company’s Class A common stock, all of the outstanding common units of DFH LLC converted into 60,266,153 shares of the Company’s Class B common stock and all of the outstanding Series B Preferred Units and Series C Preferred Units of DFH LLC remained outstanding. Following the Corporate Reorganization, the Company owns all of the voting membership interest of DFH LLC. Redeemable Series A Preferred Units of DFH LLC As a result of the Corporate Reorganization, all of the outstanding Series A Preferred Units of DFH LLC were converted into a total of 21,255,329 shares of the Company’s Class A common stock. Redeemable Series B Preferred Units of DFH LLC As of September 30, 2021 and December 31, 2020, the Company had 7,143 and 7,143, respectively, of Redeemable Series B Preferred Units (“Series B Preferred Units”) issued and outstanding with a carrying value of $6,897,365 and $6,333,036, respectively. In the event of a liquidation, dissolution or winding up of DFH LLC, the Series B Preferred Units have a liquidation preference of $1,000 per unit and are senior to common units. The Series B Preferred Units have an 8% annual cumulative preferred distribution on the liquidation preference that is payable if and when distributions are declared. The Series B Preferred units do not participate in discretionary distributions, and each unit has the right to one vote on any matter presented for a vote of the members of DFH LLC. As of September 30, 2021 and December 31, 2020, these units have an aggregate unpaid amount of cumulative preferred distributions of $2,667,021 and $2,102,692, respectively, which is $373.38 and $294.37, respectively, per unit. The Series B Preferred Units can be redeemed at DFH LLC’s option for $1,000 per unit plus any accrued and unpaid preferred distributions per unit at any time prior to December 31, 2022. The units may also be redeemed at the option of the holder upon a sale of DFH LLC for $1,000 per unit plus any accrued and unpaid preferred distributions. As the units are not currently probable of becoming redeemable outside the Company’s control, no accretion has been recorded. Redeemable Convertible Series C Preferred Units of DFH LLC In April 2020, the Company redeemed 1,000 Series C Preferred Units for $1,000,000 plus accrued unpaid preferred distributions of $62,500. On January 27, 2021, the Company redeemed all of the outstanding Series C Preferred Units for $26,000,000, including $500,000 of discounted costs, plus accrued unpaid preferred distributions of $ Series A Convertible Preferred Stock of the Company On September 29, 2021, the Company filed a Certificate of Designations with the State of Delaware establishing 150,000 shares of Series A Convertible Preferred Stock with an initial liquidation preference of $1,000 per share and a par value $0.01 per share (the “Convertible Preferred Stock”) and sold 150,000 shares of Convertible Preferred Stock for an aggregate purchase price of $150 million. The Company used the proceeds from the sale of the Convertible Preferred Stock to fund a portion of the MHI Acquisition (See Note 15). Pursuant to the Certificate of Designations, the Convertible Preferred Stock ranks senior to the Company’s Class A and B common stock with respect to dividends and distributions on liquidation, winding-up and dissolution. Upon a liquidation, dissolution or winding up of the Company, each share of Convertible Preferred Stock will be entitled to receive the initial liquidation preference of $1,000 per share, subject to adjustment, plus all accrued and unpaid dividends thereon. In addition, the Convertible Preferred Stock has the following terms: • Cumulative Dividends: The Convertible Preferred Stock accumulates cumulative dividends at a rate per annum equal to 9.00% payable quarterly in arrears. • Duration: The Convertible Preferred Stock is perpetual with call and conversion rights. The Convertible Preferred Stock is not convertible by the Purchasers in the first five years following issuance, with the exception of the acceleration of the Conversion Right (as defined below) upon breach of the protective covenants (described below). The Company can call the outstanding Convertible Preferred Stock at any time for one-hundred and two percent (102%) of its liquidation preference during the fourth year following its issuance and for one-hundred and one percent (101%) of its liquidation preference during the fifth year following its issuance (in each case, for the avoidance of doubt, plus accrued but unpaid dividends, if any). Subsequent to the fifth anniversary of its issuance, a Purchaser can convert the Convertible Preferred Stock into Class A common stock of the Company (the “Conversion Right”). The conversion price will be based on the average of the trailing 90 days’ closing price of Class A common stock of the Company, less 20% of the average and subject to a floor conversion price of $4.00 (the “Conversion Discount”). • Protective Covenants: The protective covenants of the Convertible Preferred Stock require the Company to maintain compliance with all covenants related to (i) the Credit Agreement, as may be further amended from time to time; provided that any amendment, restatement, modification or waiver of the Credit Agreement that would adversely and materially affect the rights of the Purchasers will require the written consent of holders of a majority of the then-outstanding shares of Convertible Preferred Stock; and (ii) any agreement between the Company and any Purchaser (the covenants referred to in clauses (i) and (ii), collectively, the “Protective Covenants”). Non-compliance beyond any applicable cure period with the Protective Covenants (in the case of the Protective Covenants related to the Credit Agreement) will accelerate the Conversion Right, and in the event of such acceleration that occurs before the fifth anniversary following the issuance of the Convertible Preferred Stock, the “Conversion Discount” shall be increased from 20% to 25%. • Voting Rights. Except as may be expressly required by Delaware law, the shares of Convertible Preferred Stock have no voting rights. • Redemption in a Change of Control: The Convertible Preferred Stock will be redeemed, contingent upon and concurrently with the consummation of a change of control of the Company. Shares of Convertible Preferred Stock will be redeemed in a change of control of the Company at a price, in cash, equal to the liquidation preference, subject to adjustment, plus all accumulated and unpaid dividends, plus, if the change of control occurs before the fourth anniversary of the date of issuance of the Convertible Preferred Stock, a premium equal to the dividends that would have accumulated on such share of Convertible Preferred Stock from and after the change of control redemption date and through the fourth anniversary of the issuance of the Convertible Preferred Stock. Pursuant to the terms of the Certificate of Designations, unless and until approval of the Company’s stockholders is obtained as contemplated by Nasdaq listing rules, no shares of Class A common stock will be issued or delivered upon conversion of any Convertible Preferred Stock to the extent that such issuance would (i) result in the holder beneficially owning in excess of 19.99% of the outstanding Class A common stock as of the date of the Certificate of Designations or (ii) exceed 19.99% of the outstanding shares of Class A and Class B common stock combined as of the date of the Certificate of Designations. In addition, in connection with the sale of the Convertible Preferred Stock, on September 29, 2021, the Company and the Purchasers entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which, among other things, the Company granted the Purchasers certain registration rights. Under the Registration Rights Agreement, the Company is required to register the Convertible Preferred Stock owned by the Purchasers and the shares of Class A common stock issuable upon conversion of such shares equal to 19.99% of the outstanding shares of Class A common stock for resale within the earlier of (i) three business days after the filing of the Company’s Form 10-K for the fiscal year ended December 31, 2021 and (ii) six months after September 29, 2021. If the Company fails to comply with its registration requirements under the Registration Rights Agreement, the Purchasers, in addition to any regular dividends, will be entitled to an additional 2% per annum dividend for an additional quarter period on the Convertible Preferred Stock if the breach is cured within 30 days and for each additional 30 day period in which the Company fails to cure such breach, each Purchaser will be entitled to an additional 2% per annum for an additional quarter period until cured. In addition, the Purchaser has rights to demand the registration of the Convertible Preferred Stock and the shares of Class A common stock in certain instances. |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Equity-Based Compensation [Abstract] | |
Equity-Based Compensation | 8. Equity-Based Compensation Dream Finders Homes, Inc. On January 20, 2021, the Board of Directors approved and adopted the DFH, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan is administered by the Compensation Committee of the Board of Directors, and authorizes the Company to grant incentive stock-based awards. The Company granted 759,709 restricted stock grants to certain executives and directors, which had a weighted-average grant date fair value of $23.15 per share, in conjunction with the adoption of the 2021 Plan. These stock grants vest over a period of three years of continuous service, commencing on the date of the grant and vesting ratably in one third Dream Finders Holdings LLC In January 2021, certain common non-voting units in DFH LLC were converted into shares of the Company’s Class A common stock and Class B common stock. As a result, DFH LLC expensed the remaining unrecognized stock compensation expense associated with these units in the amount of $0 for the three months ended September 30, 2021 and $1,240,309 for the nine months ended September 30, 2021. Expense related to equity-based compensation was $697,054 for the nine months ended September 30, 2020. As of December 31, 2020, the Company had 3,532 non-vesting, non-common units issued to employees, valued at $4,741,657, which converted into shares of the Company’s Class A common stock on January 21, 2021. |
Variable Interest Entities and
Variable Interest Entities and Investments in Other Entities | 9 Months Ended |
Sep. 30, 2021 | |
Variable Interest Entities and Investments in Other Entities [Abstract] | |
Variable Interest Entities and Investments in Other Entities | 9. Variable Interest Entities and Investments in Other Entities The Company holds investments in certain limited partnerships and similar entities that conduct land acquisition, land development and/or other homebuilding activities in various markets where our homebuilding operations are located. The Company also has an interest in one unconsolidated VIE, Jet Home Loans LLC, where the primary activities include underwriting, originating and selling home mortgages. The Company’s VIEs are funded by initial capital contributions from the Company, as well as its other partners and generally do not have significant debt. The primary risk of loss associated with the Company’s involvement in these VIEs is limited to the Company’s initial capital contributions due to bankruptcy or insolvency of the VIE; however, management has deemed the likelihood of this to be remote. The maximum exposure to loss related to the VIEs is disclosed below for both consolidated and unconsolidated VIEs, which equals the Company’s capital investment in each entity. In some cases, an unrelated third party is the general partner or managing member and in others, the general partner or managing member is a related party. Management analyzed the Company’s investments first under the variable interest model to determine if they are VIEs and, if so, whether the Company is the primary beneficiary. Management consolidates the entity if the Company is the primary beneficiary or if a standalone primary beneficiary does not exist and the Company and its related parties collectively meet the definition of a primary beneficiary. If the joint venture does not qualify as a VIE under the variable interest model, management then evaluates the entity under the voting interest model to assess if consolidation is appropriate. The assets of a VIE can only be used to satisfy the obligations of that specific VIE, even for assets that are included within the Consolidated Balance Sheets. The Company and its partners do not have an obligation to make capital contributions to the VIEs and there are no liquidity arrangements or other agreements that could require the Company to provide financial support to the VIEs. Furthermore, the creditors of the VIEs have no recourse to the Company’s general credit. Consolidated VIEs For VIEs that the Company does consolidate, management has the power to direct the activities that most significantly impact the VIE’s economic performance. The Company typically serves as the party with homebuilding expertise in the VIE. The Company does not guarantee the debts of the VIEs, and creditors of the VIEs have no recourse against the Company. There were no new consolidated VIEs during the nine months ended September 30, 2021 or 2020. The table below displays the carrying amounts of the assets and liabilities related to the consolidated VIEs: As of September 30, As of December 31, Consolidated 2021 2020 Assets $ 27,895,849 $ 50,982,111 Liabilities $ 10,636,828 $ 20,114,132 Unconsolidated VIEs and Other Equity Method Investments For VIEs that the Company does not consolidate, the power to direct the activities that most significantly impact the VIE’s economic performance is held by a third party. These entities are accounted for as equity method investments. The Company’s maximum exposure to loss is limited to its investment in the entities because the Company is not obligated to provide any additional capital to or guarantee any of the unconsolidated VIEs’ debt. The table below shows the Company’s investment in the unconsolidated VIEs: As of September 30, As of December 31, Unconsolidated 2021 2020 Jet Home Loans 6,106,173 3,872,089 Total investment in unconsolidated VIEs $ 6,106,173 $ 3,872,089 Other equity method investments 1,237,624 673,260 Total equity method investments $ 7,343,797 $ 4,545,349 Lot Option Contracts The Company generally does not engage in the land development business. Instead, we employ an asset-light land financing strategy, providing us optionality to purchase lots on a ‘‘just-in-time’’ basis for construction and affording us flexibility to acquire lots at a rate that matches the expected sales pace in a given community at predetermined market prices from various land bank entities. We typically execute this strategy through the purchase of finished lot option and land bank option contracts, which require deposits in the form of cash or letters of credit. We primarily employ two variations of our asset-light land financing strategy, finished lot option contracts and land bank option contracts, pursuant to which we secure the right to purchase finished lots at market prices from various land sellers and land bank partners, by paying deposits based on the aggregate purchase price of the finished lots (typically 10% or less in the case of finished lot option contracts and 15% or less in the case of land bank option contracts). These option contracts generally allow us, at our option, to forfeit our right to purchase the lots controlled for any reason, and our sole legal obligation and economic loss as a result of such forfeitures is limited to the amount of the deposits paid pursuant to such option contracts and, in the case of land bank option contracts, any related fees paid to the land bank partner. None of the creditors of any of the land bank entities with which we enter into lot option contracts have recourse to our general credit. We generally do not have any specific performance obligations to purchase a certain number or any of the lots or guarantee any of the land bankers’ financial or other liabilities. We are not involved in the design or creation of the land bank entities from which we purchase lots under lot option contracts. The land bankers’ equity holders have the power to direct 100% of the operating activities of the land bank entity. We have no voting rights in any of the land bank entities. The sole purpose of the land bank entity’s activities is to generate positive cash flow returns for such entity’s equity holders. Further, we do not share in any of the profit or loss generated by the project’s development. The profits and losses are passed directly to the land banker’s equity holders. The deposit placed by us pursuant to the lot option contracts is deemed to be a variable interest in the respective land bank entities. Certain of those land bank entities are deemed to be VIEs. Therefore, the land bank entities with which we enter into lot option contracts are evaluated for possible consolidation by the Company. We believe the activities that most significantly impact a land bank entity’s economic performance are the operating activities of the land bank entity. In the case of development projects, unless and until a land bank entity delivers finished lots for sale, the land bank entity’s equity investors bear the risk of land ownership and do not earn any revenues. The operating development activities are managed by the land bank entity’s equity investors. We possess no more than limited protective legal rights through the lot option contracts in the specific finished lots that we are purchasing, and we possess no participative rights in the land bank entities. Accordingly, we do not have the power to direct the activities of a land bank entity that most significantly impact its economic performance. For the aforementioned reasons, the Company concluded that it is not the primary beneficiary of the land bank entities with which it enters into lot option contracts, and therefore the Company does not consolidate any of these VIEs. The Company’s total risk of loss related to lot option contracts was $156,605,165 and $66,272,347 as of September 30, 2021 and December 31, 2020, respectively. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Taxes [Abstract] | |
Income Taxes | 10. Income Taxes As a result of the IPO and the Corporate Reorganization completed in January 2021, we own all of the Common Units of DFH LLC, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, DFH LLC is generally not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by DFH LLC is passed through to and included in the taxable income or loss of its member, Dream Finders Homes, Inc., in accordance with the terms of the Operating Agreement. The Company is a corporation subject to U.S. federal income taxes, in addition to state and local income taxes, based on our share of DFH LLC’s pass-through taxable income. Deferred tax assets arise principally as a result of various accruals required for financial reporting purposes which are not currently deductible for tax return purposes. Management believes that we will have sufficient future taxable income to make it more likely than not that the net deferred tax assets will be realized. As of September 30, 2021, the Company had no valuation allowance recorded against deferred tax assets. Taxable income is estimated to be $23,246,292 and $0 for the three months ended September 30, 2021 and 2020, and $77,235,617 and $0 for the nine months ended September 30 2021 and 2020, as the Company did not exist at such time and DFH LLC was treated as a partnership generally not subject to U.S. federal and most applicable state and local income taxes. The Company’s for the three months ended September 30, . The Company’s effective tax rate for the nine months ended September 30, 2021 and 2020 is estimated to be Prior to the IPO, The income tax provision for the three and nine months ended September 30, 2021 was different than the U.S. federal statutory income tax rate of 21% primarily attributable to the inclusion of the PPP income as a permanent difference which is not subject to taxation. We file a consolidated U.S. federal income tax return, as well as state and local tax returns in all jurisdictions where we maintain operations. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | 11. Segment Reporting T he Company operates in the homebuilding business and is organized and reported by division. There are twelve operating segments and seven reportable segments: (i) the Carolinas (H&H), (ii) Jacksonville, (iii) Orlando, (iv) Colorado, (v) Washington DC (“DC Metro”), (vi) Jet Home Loans LLC (“Jet”), the Company’s mortgage operations, and (vii) other. The Company includes Century Homes data acquired within the Orlando segment. The revenues of each remaining operating segment are not material and are therefore combined into an “Other” category for the purposes of segment reporting. The corporate component of the Company’s operations, which is not considered an operating segment, is also included in the “Other” category. In accordance with ASC Topic 280, Segment Reporting, operating segments are defined as components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision-makers (“CODMs”) in deciding how to allocate resources and in assessing performance. The Company’s CODM primarily evaluates performance based on the number of homes closed, average sales price, and financial results. Segment profitability is measured by net and comprehensive income. The Company’s homebuilding operations employ an asset-light business model with a focus on the design, construction and sale of single-family entry-level and first-time move-up homes. The Company’s mortgage operations are conducted through Jet, which is a licensed home mortgage broker that underwrites, originates and sells mortgages to FBC Mortgage LLC, an Orlando-based mortgage lender. The Company owns 49.9% of Jet, and FBC Mortgage, LLC owns the remaining 50.1%. Jet is accounted for as an equity method investment. Operational results of each reportable segment are not necessarily indicative of the results that would have been achieved had the reportable segment been an independent, stand-alone entity during the periods presented. The following tables summarize home sale revenues and net and comprehensive income by segment for the three months ended September 30, 2021 and 2020, and the nine months ended September 30, For the Three Months Ended September 30, For the Nine Months Ended September 30, Revenues: 2021 2020 2021 2020 Jacksonville 114,266,233 119,727,582 304,784,533 273,663,603 Colorado 30,777,384 39,041,645 70,784,907 82,927,544 Orlando 51,187,866 36,220,117 175,805,150 71,787,288 DC Metro 22,288,381 32,342,467 60,134,866 80,192,685 Jet Home Loans 7,105,321 7,015,000 19,950,615 22,377,000 The Carolinas (H&H) 77,022,277 - 270,355,045 - Other 67,441,497 56,835,016 189,955,603 164,135,268 Total segment revenues $ 370,088,959 $ 291,181,827 $ 1,091,770,719 $ 695,083,388 Reconciling items from equity method investments (7,105,321 ) (7,015,000 ) (19,950,615 ) (22,377,000 ) Consolidated revenues $ 362,983,638 $ 284,166,827 $ 1,071,820,104 $ 672,706,388 For the Three Months Ended September 30, For the Nine September 30 Net and comprehensive income: 2021 2020 2021 2020 Jacksonville 15,893,270 10,631,703 35,379,244 20,084,482 Colorado 2,883,421 5,431,919 5,723,432 9,627,350 Orlando 3,173,384 3,303,306 13,612,888 4,682,466 DC Metro 804,973 1,423,273 2,803,812 2,059,612 Jet Home Loans 2,585,411 2,790,850 7,633,428 9,497,000 Carolinas (H&H) 2,185,613 - 7,409,557 - Other (2,342,069 ) 1,730,056 5,250,817 3,041,753 Total segment net and comprehensive income $ 25,184,003 $ 25,311,107 $ 77,813,178 $ 48,992,663 Reconciling items from equity method investments (1,615,988 ) (1,233,291 ) (4,589,532 ) (4,653,351 ) Consolidated net and comprehensive income $ 23,568,015 $ 24,077,816 $ 73,223,646 $ 44,339,312 The following table summarizes Company assets by segment as of September 30, 2021 and December 31, 2020: As of September 30, As of December 31, Segments 2021 2020 Jacksonville 211,346,145 162,668,740 Colorado 107,427,943 51,605,969 Orlando 133,934,318 77,299,028 DC Metro 66,594,450 41,327,694 Jet Home Loans 70,442,668 38,696,793 The Carolinas (H&H) 221,583,127 161,242,384 Other (1) 485,469,030 235,664,336 Total segment assets $ 1,296,797,681 $ 768,504,944 Reconciling items from equity method investments (64,215,898 ) (34,824,703 ) Consolidated assets $ 1,232,581,783 $ 733,680,241 (1) Other includes the Company’s title operations, homebuilding operations in non-reportable segments, operations of the corporate component, and corporate assets such as cash and cash equivalents, cash held in trust, prepaid insurance, operating and financing leases, lot deposits, goodwill, as well as property and equipment. |
Fair Value Disclosures
Fair Value Disclosures | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | 12. Fair Value Disclosures ASC 820, Fair Value Measurement, defines fair value as the price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at measurement date and requires assets and liabilities to be carried at fair value. GAAP assigns a fair value hierarchy to the inputs used to measure fair value. Level 1 inputs are quoted prices in active markets for identical assets and liabilities. Level 2 inputs are inputs other than quoted market prices that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs. Fair value measurements may be utilized on a nonrecurring basis, such as for purchase accounting, inventory, and the impairment of long-lived assets and goodwill. The fair value of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and construction lines of credit, approximate their carrying amounts due to the short-term nature of these instruments. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 13. Related Party Transactions During the nine months ended September Consolidated Joint Ventures The Company has entered into joint venture arrangements to acquire land, finished lots and build homes. Certain stockholders of DFH, Inc. and directors and members of management of the Company, have invested in these joint ventures and some are limited partners in these joint ventures. DFH Investors LLC (which owned 15,400 Series A Preferred Units, representing 11.65% of the membership interest in DFH LLC, prior to the Corporate Reorganization) is the managing member of certain of these joint ventures. The joint ventures are consolidated for accounting purposes. Details of each are included in Note 1. DF Residential I, LP DF Residential I, LP (Fund I) is a real estate investment vehicle, organized for the purpose of acquiring and developing finished lots. Dream Finders Homes, LLC, has entered into six joint ventures and ten land bank projects with Fund I since its formation in January 2017. DF Capital Management, LLC (“DF Capital”) is the investment manager in Fund I. The Company owns a 49% membership interest in DF Capital. DF Capital is controlled by unaffiliated parties. Certain directors and executive officers have made investments in Fund I as limited partners. In addition, certain members of management have made investments in Fund I. The total committed capital in Fund I was $36,706,163 as of September September The general partner of Fund I is DF Management GP, LLC (“DF Management”). Dream Finders Homes LLC is one of four members of DF Management with a 26.13% membership interest. Certain members of DFH Investors LLC, including one of the Company’s directors, have a 65.33% membership interest. Collectively, Dream Finders Homes LLC and DFH Investors LLC have invested $1,400,000 in Fund I as of September DF Residential II, LP DF Residential II, LP, a Delaware limited partnership (“Fund II”) initiated its first close on March 11, 2021. DF Management GP II, LLC, a Florida limited liability company, serves as the general partner of Fund II (the “General Partner”). Fund II has raised capital commitments of approximately $155 million to date, and will remain open for a period of at least three months, seeking to raise a total of at least $200 million in capital commitments. DF Capital is the investment manager of Fund II. The Company indirectly owns 72% of the membership interests in the General Partner and receives 72% of the economic interests. The General Partner is controlled by unaffiliated parties. The Company’s investment commitment in Fund II is $3 million or 1.5% of the total expected capital commitment of Fund II of $200 million On March 11, 2021, the Company entered into land bank financing arrangements and a Memorandum of Right of First Offer with Fund II, under which Fund II has an exclusive right of first offer on any land bank financing projects up to $20 million that meet its investment criteria and are undertaken by the Company during Fund II’s investment period. Certain directors, executive officers and other officers have made investment commitments as limited partners in Fund II in an aggregate amount $33.9 million and $0, or 17% and 0.0%, as of September Land Bank Transactions with DF Capital After Fund I was fully committed, DF Capital provided land bank financing in a total of seven further projects and subsequently raised additional commitments from limited partners in Fund I as well as other parties. One of the Company’s officers, invested $180,000 in one of these funds managed by DF Capital as a limited partner in 2019. As of September During the three months ended September nine months ended September September Land Bank Transactions with LB Parker Owners, LLC The Company entered into a land banking transaction with LB Parker Owners, LLC, a Delaware limited liability company, which is beneficially owned by Rockpoint Group, LLC in connection with the Company’s acquisition and development of certain residential real property located in Parker, Colorado known as “Looking Glass” pursuant to which LB Parker Owners, LLC provided $3,300,000 for the acquisition of the real property. Bill Walton is the founding principal of Rockpoint Group, LLC and also a member of the Company’s board of directors, and a member of its compensation committee. Varde Capital Certain DF Capital joint ventures in which the Company is a member have entered into lending arrangements with the holders of the Series C Preferred Units in DFH LLC. The Varde Private Debt Opportunities Fund (On Shore), L.P. (Varde Capital) has a loan with a principal amount of $18,000,000, whose borrowers are DFC East Village, LLC, DFC Seminole Crossing, LLC and DFC Sterling Ranch, LLC. These joint ventures are between Fund I and the Company. As of September In addition, DFH LLC and DF Capital are, individually and collectively, the “Guarantor” in favor of the Varde Private Debt Opportunities Fund (On Shore), L.P. in connection with this loan agreement. The DFH LLC guarantee provides additional assurance to Varde Capital, as they have recourse to the assets of the Company beyond the pledged collateral in the joint ventures to be made whole in instances of default. The Company believes an event of default is unlikely. Jet Home Loans Jet performs mortgage origination activities for the Company. Jet underwrites and originates home mortgages for Company customers and non-Company customers. The Company owns 49.9% of Jet, but is not the primary beneficiary. Jet is accounted for under the equity method and is a related party of the Company. Guarantees Dream Finders Homes LLC is a limited Guarantor in favor of Flagstar Bank (Lender), in connection with a loan of $5,670,000 to DFC Seminole Crossing, LLC (Borrower) as of September |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings per Share [Abstract] | |
Earnings per Share | 14. Earnings per Share The following weighted-average shares and share equivalents were used to calculate basic and diluted earnings per share for the three and nine months ended September 30, 2021: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2021 Net and comprehensive income attributable to Dream Finders Homes, Inc. 19,135,499 63,830,023 Less: Preferred dividends 193,903 1,197,100 Add: Loss prior to reorganization attributable to DFH LLC members - (1,244,083 ) Net and comprehensive income attributable to common stockholders 18,941,596 63,877,006 Weighted-average number of shares outstanding used to calculate basic EPS 92,521,482 92,521,482 Dilutive securities: Restricted stock 173,715 137,396 Weighted-average number of shares and share equivalents outstanding used to calculate diluted EPS 92,695,197 92,658,878 The Corporate Reorganization created the current capital structure of DFH, Inc. Therefore, the net income per share for DFH, Inc. is not shown for the fiscal years ended December 31, 2020. In addition, the basic and diluted net income per share only includes earnings subsequent to January 21, 2021, the date of the Corporate Reorganization. Basic net income per share is calculated by dividing net income attributable to DFH, Inc. for the period subsequent to the Corporate Reorganization, by the weighted-average number of shares of Class A common stock and Class B common stock outstanding for the period. The total outstanding shares of common stock are made up of Class A common stock and Class B common stock, which participate equally in their ratable ownership share of the Company. Diluted net income per share has been calculated in a manner consistent with that of basic net income per share while giving effect to shares of potentially dilutive restricted stock grants outstanding during the period and Series A convertible preferred stock |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events T he Company has evaluated subsequent events through November 10, 2021 , the date the financial statements were issued, and no additional matters were identified requiring recognition or disclosure in the financial statements, except for events described below MHI Acquisition On October 1, 2021 (the “Closing”), the Company, through its subsidiaries Dream Finders Holdings LLC, a Florida limited liability company, and DFH Coventry, LLC, a Florida limited liability company, completed the acquisition of certain assets, rights and properties, and assumed certain liabilities, comprising the following businesses of MHI Partnership, Ltd., a Texas limited partnership, MHI Models, Ltd., a Texas limited partnership, McGuyer Homebuilders, Inc., a Texas corporation, FMR IP, LLC, a Texas limited liability company, HomeCo Purchasing Company, Ltd., a Texas limited partnership, and 2019 Sonoma, LLC, a Texas limited liability company (the “MHI Acquisition”): (i) single-family residential home-building; (ii) owning model homes; (iii) acquisition, ownership and licensing of intellectual property (including architectural plans); (iv) purchasing and reselling homebuilding supplies; (v) development, construction and sale of condominium units in Austin, Texas; (vi) mortgage origination through a mortgage company; and (vii) title insurance, escrow and closing services through a title company. The consideration given for the MHI Acquisition was (a) cash at the Closing in the amount of $471 million, subject to customary post-closing adjustments based on the Closing date net asset value of the purchased assets, (b) the assumption of approximately $97 million of liabilities, and (c) the future payment of additional consideration of up to 25% of pre-tax net income for up to five periods, the last of which ends 48 months after the Closing, subject to certain minimum pre-tax income hurdles and thresholds and certain overhead expenses. The Company has not yet completed its evaluation and determination of consideration paid and certain assets and liabilities acquired in accordance with Topic 805. The Company used $20 million of cash on hand, proceeds from the sale of the Convertible Preferred Stock and from unsecured debt incurred under the Credit Agreement, to fund the MHI Acquisition. On October 1, 2021, the Company borrowed $300 million in revolving loans under the Credit Agreement and paid off vertical lines of credit in connection with the closing of the MHI Acquisition . |
Nature of Business and Signif_2
Nature of Business and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Nature of Business and Significant Accounting Policies [Abstract] | |
Nature of Business | Nature of Business Dream Finders Homes, Inc. (the “Company” or “DFH, Inc.”) was incorporated in the State of Delaware on September 11, 2020. The Company was formed for the purpose of completing an initial public offering (“IPO”) of its common stock and related transactions in order to carry on the business of Dream Finders Holdings LLC, a Florida limited liability company (“DFH LLC”), as a publicly-traded entity. Pursuant to a corporate reorganization and completion of the IPO on January 25, 2021, the Company became a holding company for DFH LLC and its subsidiaries. In connection with the IPO, and pursuant to the terms of the Agreement and Plan of Merger by and among DFH, Inc., DFH LLC and DFH Merger Sub LLC, a Delaware limited liability company and direct, wholly owned subsidiary of DFH, Inc., DFH Merger Sub LLC merged with and into DFH LLC with DFH LLC as the surviving entity (the “Merger”). As a result of the Merger, all of the outstanding non-voting common units and Series A Preferred Units of DFH LLC converted into 21,255,329 shares of Class A common stock of DFH, Inc., all of the outstanding common units of DFH LLC converted into 60,266,152 shares of Class B common stock of DFH, Inc. and all of the outstanding Series B Preferred Units and Series C Preferred Units of DFH LLC remained outstanding. We refer to this and certain other related events and transactions, as the “Corporate Reorganization”. The Company successfully completed its IPO of 11,040,000 shares of Class A common stock (which included full exercise of the over-allotment option) at an IPO price of $13.00 per share. Shares of the Company’s Class A common stock began trading on the NASDAQ Global Select Market under the ticker symbol “DFH” on January 21, 2021, and the IPO closed on January 25, 2021. The Company is the sole manager of DFH LLC and owns 100% of the voting membership interest in DFH LLC. The accompanying statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for a complete set of financial statements. As such, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the Securities and Exchange Commission on March 30, 2021. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of DFH LLC, the Company’s wholly owned subsidiaries and its investments that qualify for consolidation treatment (see Note 9). All intercompany accounts and transactions have been eliminated in consolidation. There are no other components of comprehensive income not already reflected in net and comprehensive income on our Condensed Consolidated Statements of Comprehensive Income. |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include all adjustments that are of a normal recurring nature and necessary for the fair presentation of our results for the interim periods presented. Results for interim periods are not necessarily indicative of results to be expected for the full year. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the valuation and impairment of goodwill, impairment of inventories and business combination estimates. Actual results could differ materially from those estimates. |
Accounts Receivable | Accounts Receivable Accounts receivable are included on the Condensed Consolidated Balance Sheets and consist primarily of closing proceeds in transit. Of the total $31,845,905 balance as of September 30, 2021, $10,858,907 is related to proceeds in transit from various title companies, which is typically received in the first week of the subsequent month. |
Other Assets | Other Assets Other assets are included on the Condensed Consolidated Balance Sheets, and primarily consist of prepaid expenses, debt issuance costs and contract assets . |
Contingent Consideration | Contingent Consideration In connection with the acquisition of Village Park Homes, LLC (“VPH”) in May 2019, the Company recorded contingent consideration based on estimated pre-tax income of the acquired entity for fiscal years 2019, 2020, 2021 and 2022. In connection with the acquisition of H&H Constructors of Fayetteville, LLC (“H&H”) in October 2020 (Note 2), the Company recorded contingent consideration based on estimated pre-tax income of the acquired entity for the fourth quarter of 2020, fiscal years 2021, 2022, 2023 and the first three quarters of 2024. The measurement of contingent consideration was based on projected cash flows such as revenues, gross margin, overhead expenses and pre-tax income and discounted back using the discounted cash flow method. The Company recorded the fair value of the contingent consideration as a liability on the respective acquisition dates. The estimated earn-out payments are subsequently remeasured to fair value at each reporting date based on the estimated future earnings of the acquired entities. The contingent consideration for each acquisition is scheduled to be paid out each year subsequent to the anniversary of the respective acquisition closing date. As of September 30 of expense of expense The Company measured contingent consideration related to the acquisition of H&H on October 5, 2020, which approximated the value at December 31, 2020 of $16,310,000. As of September 30 September 30 and $5,221,910 and $0 of expense for the nine months ended September 30, 2021 and 2020, As of September 30, 2021, total contingent consideration on the Consolidated Balance Sheets is $27,712,570. The Company’s contingent consideration related to acquisition earn-out payments is based on a percentage of pre-tax net and comprehensive income achieved by the acquired entity, and as such, is revised accordingly. In addition, the payment of the H&H earn-out is subject to certain minimum earnings thresholds which must be met by H&H before an earn-out payment occurs. Maximum potential exposure for contingent consideration is not estimable based on the contractual terms of the contingent consideration agreements, which allow for a percentage payout based on a potentially unlimited range of pre-tax income. In April 2021, the Company paid $1,206,769 in contingent consideration to H&H. |
Variable Interest Entities | Variable Interest Entities The Company participates in joint ventures that conduct land acquisition, land development and/or other homebuilding activities in various markets where the Company’s homebuilding operations are located. The Company’s investments in these joint ventures may create a variable interest in a variable interest entity (“VIE”), depending on the contractual terms of the arrangement. Additionally, the Company, in the ordinary course of business, enters into contracts with third parties and unconsolidated entities for the ability to acquire rights to land for the construction of homes. Under these contracts, the Company typically makes a specified earnest money deposit in consideration for the right to purchase land in the future, usually at a predetermined price. Consideration paid for these contracts is recorded as lot deposits on the Consolidated Balance Sheets. Pursuant to Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 810 and subtopics related to the consolidation of variable interest entities, the Company analyzes its joint ventures under the variable interest model to determine if such are required to be consolidated in the Company’s condensed consolidated financial statements. The accounting standard requires a VIE to be consolidated by a company if that company is determined to be the primary beneficiary. The primary beneficiary is defined as the entity having both of the following characteristics: 1) the power to direct the activities that most significantly impact the VIE’s performance, and 2) the obligation to absorb losses and rights to receive the returns from the VIE that would be potentially significant to the VIE. See Note 9 for a description of the Company’s joint ventures, including those that were determined to be VIEs, and the related accounting treatment. Management determines whether the Company is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion continually. To make this determination, management considers factors such as whether the Company should direct finance, determine or limit the scope of the entity, sell or transfer property, direct development or direct other operating decisions. Joint ventures for which the Company is not identified as the primary beneficiary are accounted for as equity method investments. The Company and its unconsolidated joint venture partners make initial and/or ongoing capital contributions to these unconsolidated joint ventures, typically on a pro rata basis, according to each party’s respective equity interests. The obligations to make capital contributions are governed by each such unconsolidated joint venture’s respective operating agreement and related governing documents. Partners in these unconsolidated joint ventures are unrelated homebuilders, land developers or other real estate entities. For distributions received from these unconsolidated joint ventures, the Company has elected to use the cumulative earnings approach for the Condensed Consolidated Statements of Cash Flows. Under the cumulative earnings approach, distributions up to the amount of cumulative equity in earnings recognized are treated as returns on investment within operating cash flows and those in excess of that amount are treated as returns of investment within investing cash flows. The Company typically has obtained options to acquire portions of the land held by the unconsolidated joint ventures in which the Company currently participates. When an unconsolidated joint venture sells land to the Company, the Company defers recognition of its share of such unconsolidated joint venture’s earnings (losses) until the Company recognizes revenues on the corresponding home sale. At that time, the Company accounts for the earnings (losses) as a reduction (increase) to the cost of purchasing the land from the unconsolidated joint venture. The Company shares in the earnings (losses) of these unconsolidated joint ventures generally in accordance with its respective equity interests. In some instances, the Company recognizes earnings (losses) that differ from its equity interest in the unconsolidated joint venture. This typically arises from the Company’s deferral of the unconsolidated joint venture’s earnings (losses) from land sales to the Company. |
Non-Controlling Interests | Non-Controlling Interests The equity interests in DFH Leyden LLC, DFH Amelia LLC, DFH Clover LLC, DFH Leyden II LLC, DFH MOF Eagle Landing LLC, DCE DFH JV LLC, DFH Capitol LLC, DFC Mandarin Estates LLC, DFC East Village LLC, DFC Wilford LLC, DFC Amelia Phase III LLC, DFC Sterling Ranch LLC and DFC Grand Landings LLC have been reflected as non-controlling interests in the Consolidated Balance Sheets. Income attributable to these non-controlling interests are presented in the Condensed Consolidated Statements of Comprehensive Income as net income attributable to non-controlling interests. |
Income Taxes | Income Taxes We are a corporation subject to income taxes in the United States. Our proportional share of the Company’s subsidiaries’ provisions are included in our condensed consolidated financial statements. Our deferred income tax assets and liabilities are computed for differences between the asset and liability method and financial statement amounts that will result in taxable or deductible amounts in the future. We compute deferred balances based on enacted tax laws and applicable rates for the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized for deferred tax assets if it is more likely than not that some portion or all of the net deferred tax assets will not be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine we would be able to realize our deferred tax assets for which a valuation allowance had been recorded, then we would adjust the deferred tax asset valuation allowance, which would reduce our provision for income taxes. We evaluate the tax positions taken on income tax returns that remain open and positions expected to be taken on the current year tax returns to identify uncertain tax positions. Unrecognized tax benefits on uncertain tax positions are recorded on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the largest amount of tax benefit that is more than 50 percent likely to be realized is recognized. Interest and penalties related to unrecognized tax benefits are recorded in income tax benefit. We have no uncertain tax positions that qualify for inclusion in our condensed consolidated financial statements. See “Note 10—Income Taxes.” |
Equity-Based Compensation | Equity-Based Compensation Certain individuals on our executive-level management team are eligible for equity-based compensation, which is awarded according to the terms of individual contracts with those managers. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Report (Topic 848) |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Acquisitions [Abstract] | |
Pro Forma Information | The following unaudited pro forma condensed consolidated results of operations are provided for illustrative purposes only and have been presented as if the H&H and Century Homes acquisitions had occurred on January 1, 2020. This unaudited pro forma information should not be relied upon as being indicative of the historical results that would have been obtained if the acquisition had occurred on that date, nor of the results that may be obtained in the future. For the Three Months Ended September 30, For the Nine September 30 Unaudited Pro Forma 2021 2020 2021 2020 Total revenue $ 362,983,638 $ 369,580,015 $ 1,078,402,698 $ 892,504,467 Net and comprehensive income attributable to Dream Finders Homes, Inc. $ 19,135,499 $ 27,486,299 $ 64,151,994 $ 49,799,142 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Notes Payable [Abstract] | |
Notes Payable | Notes payable consisted of the following as of September 30, 2021 and December 31, 2020: As of September 30, As of December 31, Maturity Date Payment Terms 2021 2021 Effective Rate 2020 2020 Effective Rate May 1, 2021 Interest is payable $ - - $ 20,000,000 14.00 % February 28, 2022 (1) Non-interest bearing 1,216,000 0.00 % 832,000 0.00 % April 1, 2022 (1) Interest is payable 717,642 12.50 % 1,735,161 12.50 % July 31, 2022 (1) Interest is payable 1,979,389 9.25 % 3,984,174 9.25 % March 25, 2023 (1) Interest is payable - - 3,101,947 5.00 % Total notes payable $ 3,913,031 $ 29,653,282 Less: Debt issuance costs from notes payable - (15,444 ) Notes payable, net of discount $ 3,913,031 $ 29,637,838 (1) These notes payable relate to our consolidated joint ventures and are non-recourse to the Company. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventories [Abstract] | |
Inventories Owned by Company as a Percentage of Total Inventories | The table below shows the Company’s owned real estate inventory and real estate inventory owned by the joint ventures. As of September 30, As of December 31, 2021 2020 Construction in process $ 595,643,030 $ 396,630,945 Finished lots and land 50,140,666 46,839,616 Inventories owned by the Company 645,783,696 443,470,561 Inventories owned by VIEs 20,708,390 40,900,552 Total inventories $ 666,492,086 $ 484,371,113 Percentage of inventories owned by the Company Construction in process 92 % 89 % Finished lots and land 8 % 11 % |
Capitalized Inventory | Interest is capitalized and included within each inventory category above. Capitalized interest activity is summarized in the table below for the three months ended 30, 2021 and 2020 and for the nine months ended September 30, 2021 and 2020. For the Three Months Ended September 30, For the Nine September 30 2021 2020 2021 2020 Capitalized interest at the beginning of the period $ 18,790,661 $ 27,094,143 $ 21,091,297 $ 25,335,924 Interest incurred 9,671,286 6,126,791 23,668,584 19,765,176 Interest expensed (14,496 ) (42,373 ) (672,153 ) (124,026 ) Interest charged to cost of contract revenues earned (5,600,052 ) (7,763,661 ) (21,240,329 ) (19,562,174 ) Capitalized interest at the end of the period $ 22,847,399 $ 25,414,900 $ 22,847,399 $ 25,414,900 |
Variable Interest Entities an_2
Variable Interest Entities and Investments in Other Entities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Variable Interest Entities and Investments in Other Entities [Abstract] | |
Carrying Amounts of Assets and Liabilities Related to Consolidated VIEs | The table below displays the carrying amounts of the assets and liabilities related to the consolidated VIEs: As of September 30, As of December 31, Consolidated 2021 2020 Assets $ 27,895,849 $ 50,982,111 Liabilities $ 10,636,828 $ 20,114,132 |
Investment in Unconsolidated VIEs | The table below shows the Company’s investment in the unconsolidated VIEs: As of September 30, As of December 31, Unconsolidated 2021 2020 Jet Home Loans 6,106,173 3,872,089 Total investment in unconsolidated VIEs $ 6,106,173 $ 3,872,089 Other equity method investments 1,237,624 673,260 Total equity method investments $ 7,343,797 $ 4,545,349 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Summary of Segments | The following tables summarize home sale revenues and net and comprehensive income by segment for the three months ended September 30, 2021 and 2020, and the nine months ended September 30, For the Three Months Ended September 30, For the Nine Months Ended September 30, Revenues: 2021 2020 2021 2020 Jacksonville 114,266,233 119,727,582 304,784,533 273,663,603 Colorado 30,777,384 39,041,645 70,784,907 82,927,544 Orlando 51,187,866 36,220,117 175,805,150 71,787,288 DC Metro 22,288,381 32,342,467 60,134,866 80,192,685 Jet Home Loans 7,105,321 7,015,000 19,950,615 22,377,000 The Carolinas (H&H) 77,022,277 - 270,355,045 - Other 67,441,497 56,835,016 189,955,603 164,135,268 Total segment revenues $ 370,088,959 $ 291,181,827 $ 1,091,770,719 $ 695,083,388 Reconciling items from equity method investments (7,105,321 ) (7,015,000 ) (19,950,615 ) (22,377,000 ) Consolidated revenues $ 362,983,638 $ 284,166,827 $ 1,071,820,104 $ 672,706,388 For the Three Months Ended September 30, For the Nine September 30 Net and comprehensive income: 2021 2020 2021 2020 Jacksonville 15,893,270 10,631,703 35,379,244 20,084,482 Colorado 2,883,421 5,431,919 5,723,432 9,627,350 Orlando 3,173,384 3,303,306 13,612,888 4,682,466 DC Metro 804,973 1,423,273 2,803,812 2,059,612 Jet Home Loans 2,585,411 2,790,850 7,633,428 9,497,000 Carolinas (H&H) 2,185,613 - 7,409,557 - Other (2,342,069 ) 1,730,056 5,250,817 3,041,753 Total segment net and comprehensive income $ 25,184,003 $ 25,311,107 $ 77,813,178 $ 48,992,663 Reconciling items from equity method investments (1,615,988 ) (1,233,291 ) (4,589,532 ) (4,653,351 ) Consolidated net and comprehensive income $ 23,568,015 $ 24,077,816 $ 73,223,646 $ 44,339,312 The following table summarizes Company assets by segment as of September 30, 2021 and December 31, 2020: As of September 30, As of December 31, Segments 2021 2020 Jacksonville 211,346,145 162,668,740 Colorado 107,427,943 51,605,969 Orlando 133,934,318 77,299,028 DC Metro 66,594,450 41,327,694 Jet Home Loans 70,442,668 38,696,793 The Carolinas (H&H) 221,583,127 161,242,384 Other (1) 485,469,030 235,664,336 Total segment assets $ 1,296,797,681 $ 768,504,944 Reconciling items from equity method investments (64,215,898 ) (34,824,703 ) Consolidated assets $ 1,232,581,783 $ 733,680,241 (1) Other includes the Company’s title operations, homebuilding operations in non-reportable segments, operations of the corporate component, and corporate assets such as cash and cash equivalents, cash held in trust, prepaid insurance, operating and financing leases, lot deposits, goodwill, as well as property and equipment. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings per Share [Abstract] | |
Schedule of Basic and Diluted Net Earnings Per Share | The following weighted-average shares and share equivalents were used to calculate basic and diluted earnings per share for the three and nine months ended September 30, 2021: For the Three Months Ended September 30, For the Nine Months Ended September 30, 2021 2021 Net and comprehensive income attributable to Dream Finders Homes, Inc. 19,135,499 63,830,023 Less: Preferred dividends 193,903 1,197,100 Add: Loss prior to reorganization attributable to DFH LLC members - (1,244,083 ) Net and comprehensive income attributable to common stockholders 18,941,596 63,877,006 Weighted-average number of shares outstanding used to calculate basic EPS 92,521,482 92,521,482 Dilutive securities: Restricted stock 173,715 137,396 Weighted-average number of shares and share equivalents outstanding used to calculate diluted EPS 92,695,197 92,658,878 |
Nature of Business and Signif_3
Nature of Business and Significant Accounting Policies, Nature of Business (Details) - $ / shares | Jan. 25, 2021 | Sep. 30, 2021 |
Class A Common Stock [Member] | ||
Nature of Business [Abstract] | ||
Stock issued in offering (in shares) | 11,040,000 | |
Class B Common Stock [Member] | ||
Nature of Business [Abstract] | ||
Units converted to common stock (in shares) | 60,266,152 | |
Stock issued in offering (in shares) | 0 | |
IPO [Member] | ||
Nature of Business [Abstract] | ||
Ownership percentage | 100.00% | |
IPO [Member] | Class A Common Stock [Member] | ||
Nature of Business [Abstract] | ||
Units converted to common stock (in shares) | 21,255,329 | |
Stock issued in offering (in shares) | 11,040,000 | |
Share price (in dollars per share) | $ 13 | |
IPO [Member] | Class B Common Stock [Member] | ||
Nature of Business [Abstract] | ||
Units converted to common stock (in shares) | 60,266,153 |
Nature of Business and Signif_4
Nature of Business and Significant Accounting Policies, Accounts Receivable (Details) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Nature of Business and Significant Accounting Policies [Abstract] | ||
Accounts receivable | $ 31,845,905 | $ 24,927,903 |
Accounts receivable, proceeds in transit | $ 10,858,907 |
Nature of Business and Signif_5
Nature of Business and Significant Accounting Policies, Contingent Consideration (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Contingent Consideration [Abstract] | ||||||
Contingent consideration | $ 27,712,570 | $ 27,712,570 | $ 23,157,524 | |||
Contingent consideration adjustments, expense (income) | 523,425 | $ 0 | 5,221,910 | $ 0 | ||
Payments of contingent consideration | 1,206,769 | 0 | ||||
Other payments of contingent consideration | 0 | 0 | ||||
VPH [Member] | ||||||
Contingent Consideration [Abstract] | ||||||
Contingent consideration | 7,387,429 | 7,387,429 | 6,847,524 | |||
H&H [Member] | ||||||
Contingent Consideration [Abstract] | ||||||
Contingent consideration | 20,325,141 | 20,325,141 | $ 16,310,000 | |||
Payments of contingent consideration | $ 1,206,769 | |||||
Other Expenses [Member] | VPH [Member] | ||||||
Contingent Consideration [Abstract] | ||||||
Contingent consideration adjustments, expense (income) | $ 78,665 | $ 204,251 | $ 539,905 | $ (112,521) |
Nature of Business and Signif_6
Nature of Business and Significant Accounting Policies, Income Taxes (Details) | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Income Taxes [Abstract] | |
Uncertain tax positions | $ 0 |
Business Acquisitions (Details)
Business Acquisitions (Details) | Jan. 31, 2021USD ($)LotUnit | Oct. 05, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) |
Business Acquisition [Abstract] | |||||||
Bridge loan amount | $ 3,913,031 | $ 3,913,031 | $ 29,653,282 | ||||
Goodwill | 30,360,997 | 30,360,997 | $ 28,566,232 | ||||
Unaudited Pro Forma [Abstract] | |||||||
Total revenue | 362,983,638 | $ 369,580,015 | 1,078,402,698 | $ 892,504,467 | |||
Net income attributable to Dream Finders Homes, Inc. | 19,135,499 | 27,486,299 | 64,151,994 | 49,799,142 | |||
Comprehensive income attributable to Dream Finders Homes, Inc. | $ 19,135,499 | $ 27,486,299 | $ 64,151,994 | $ 49,799,142 | |||
H&H Constructors of Fayetteville, LLC ("H&H'') [Member] | |||||||
Business Acquisition [Abstract] | |||||||
Percentage of membership interest | 100.00% | ||||||
Purchase price | $ 44,096,448 | ||||||
Net of purchase price reduction related to customary closing adjustments | 1,710,275 | ||||||
Bridge loan amount | $ 20,000,000 | ||||||
Annual interest rate | 14.00% | ||||||
Debt Instrument, Maturity Date | May 1, 2021 | ||||||
Cash paid for business acquisition | $ 9,496,723 | ||||||
Contingent consideration | 16,310,000 | ||||||
Goodwill | 16,357,450 | ||||||
Fair Value of Assets Acquired and Liabilities Assumed [Abstract] | |||||||
Cash | 10,956,359 | ||||||
Other assets | 8,253,966 | ||||||
Tradename | 2,660,000 | ||||||
Inventories | 143,817,075 | ||||||
Liabilities assumed | 137,949,737 | ||||||
Construction lines of credit | $ 116,894,907 | ||||||
Century Homes Florida Acquisition [Member] | |||||||
Business Acquisition [Abstract] | |||||||
Cash paid for business acquisition | $ 35,500,000 | ||||||
Number of acquired units under construction | Unit | 134 | ||||||
Number of finished lots | Lot | 229 |
Construction Lines of Credit (D
Construction Lines of Credit (Details) | Jan. 25, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)CreditFacility | Sep. 29, 2021USD ($)Lender | Sep. 08, 2021USD ($)Lender |
Construction Line of Credit [Abstract] | ||||||||
Line of credit maximum borrowing base | $ 762,979,000 | |||||||
Line of credit aggregate outstanding balance | $ 440,000,000 | $ 440,000,000 | $ 289,878,716 | |||||
Number of line of credit facilities available | CreditFacility | 34 | |||||||
Maturity date | Jan. 25, 2024 | |||||||
Effective interest rate | 3.75% | 3.75% | ||||||
Debt issuance costs capitalized | $ 7,505,214 | $ 7,505,214 | $ 2,249,683 | |||||
Debt issuance costs amortized | 489,986 | $ 553,772 | 1,266,784 | $ 1,560,795 | ||||
Debt issuance costs unamortized | 506,466 | 506,466 | ||||||
Line of Credit and Notes Payable [Member] | ||||||||
Construction Line of Credit [Abstract] | ||||||||
Debt issuance costs, net of amortization | $ 6,238,429 | $ 6,238,429 | $ 506,466 | |||||
Minimum [Member] | ||||||||
Construction Line of Credit [Abstract] | ||||||||
Effective interest rate | 3.81% | |||||||
Maximum [Member] | ||||||||
Construction Line of Credit [Abstract] | ||||||||
Effective interest rate | 10.33% | |||||||
Bank of America, N.A. and Other Lenders [Member] | ||||||||
Construction Line of Credit [Abstract] | ||||||||
Line of credit current borrowing base | $ 742,500,000 | |||||||
Line of credit maximum borrowing base | $ 817,500,000 | 1,050,000,000 | ||||||
Number of lenders | Lender | 1 | |||||||
Bank of America, N.A. and Other Lenders [Member] | Amendment [Member] | ||||||||
Construction Line of Credit [Abstract] | ||||||||
Line of credit current borrowing base | 292,500,000 | |||||||
Line of credit maximum borrowing base | $ 300,000,000 | |||||||
Number of lenders | Lender | 3 | |||||||
Bank of America, N.A. and Other Lenders [Member] | Unsecured Syndicated Credit Facility [Member] | IPO [Member] | ||||||||
Construction Line of Credit [Abstract] | ||||||||
Line of credit current borrowing base | $ 450,000,000 | |||||||
Repayment of debt | 340,000,000 | |||||||
Boston Omaha Corporation, LLC [Member] | Bridge Loan [Member] | ||||||||
Construction Line of Credit [Abstract] | ||||||||
Repayment of debt | $ 20,000,000 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Oct. 05, 2020 | Jan. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Debt Instruments [Abstract] | ||||||
Notes payable | $ 3,913,031 | $ 29,653,282 | ||||
Less: Debt issuance costs from notes payable | (506,466) | |||||
Notes payable, net of discount | 3,913,031 | 29,637,838 | ||||
Repayments of notes payable | 24,929,519 | $ 9,924,595 | ||||
H&H Constructors of Fayetteville, LLC ("H&H'') [Member] | ||||||
Debt Instruments [Abstract] | ||||||
Maturity date | May 1, 2021 | |||||
Notes payable | $ 20,000,000 | |||||
Repayments of notes payable | $ 20,000,000 | |||||
Notes Payable [Member] | ||||||
Debt Instruments [Abstract] | ||||||
Notes payable | 3,913,031 | 29,653,282 | ||||
Less: Debt issuance costs from notes payable | $ 0 | $ (15,444) | ||||
May 1, 2021 [Member] | Notes Payable [Member] | ||||||
Debt Instruments [Abstract] | ||||||
Maturity date | May 1, 2021 | |||||
Payment Terms | Interest is payable monthly at 14.00% | |||||
Effective rate | 0.00% | 14.00% | ||||
Notes payable | $ 0 | $ 20,000,000 | ||||
February 28, 2022 [Member] | Notes Payable [Member] | ||||||
Debt Instruments [Abstract] | ||||||
Maturity date | [1] | Feb. 28, 2022 | ||||
Payment Terms | Non-interest bearing | |||||
Effective rate | [1] | 0.00% | 0.00% | |||
Notes payable | [1] | $ 1,216,000 | $ 832,000 | |||
April 1, 2022 Notes [Member] | Notes Payable [Member] | ||||||
Debt Instruments [Abstract] | ||||||
Maturity date | [1] | Apr. 1, 2022 | ||||
Payment Terms | Interest is payable monthly at 12.50% | |||||
Effective rate | [1] | 12.50% | 12.50% | |||
Notes payable | [1] | $ 717,642 | $ 1,735,161 | |||
July 31, 2022 Notes [Member] | Notes Payable [Member] | ||||||
Debt Instruments [Abstract] | ||||||
Maturity date | [1] | Jul. 31, 2022 | ||||
Payment Terms | Interest is payable monthly at 9.25% | |||||
Effective rate | [1] | 9.25% | 9.25% | |||
Notes payable | [1] | $ 1,979,389 | $ 3,984,174 | |||
March 25, 2023 Notes [Member] | Notes Payable [Member] | ||||||
Debt Instruments [Abstract] | ||||||
Maturity date | [1] | Mar. 25, 2023 | ||||
Payment Terms | Interest is payable monthly at 5.00% | |||||
Effective rate | [1] | 0.00% | 5.00% | |||
Notes payable | [1] | $ 0 | $ 3,101,947 | |||
[1] | These notes payable relate to our consolidated joint ventures and are non-recourse to the Company. |
Inventories (Details)
Inventories (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Inventory, Net [Abstract] | |||||
Construction in process | $ 595,643,030 | $ 595,643,030 | $ 396,630,945 | ||
Finished lots and land | 50,140,666 | 50,140,666 | 46,839,616 | ||
Inventories owned by the Company | 645,783,696 | 645,783,696 | 443,470,561 | ||
Inventories owned by VIEs | 20,708,390 | 20,708,390 | 40,900,552 | ||
Total inventories | $ 666,492,086 | $ 666,492,086 | $ 484,371,113 | ||
Percentage of inventories owned by the Company [Abstract] | |||||
Construction in process | 92.00% | 92.00% | 89.00% | ||
Finished lots and land | 8.00% | 8.00% | 11.00% | ||
Real Estate Inventory, Capitalized Interest Costs [Roll Forward] | |||||
Capitalized interest at the beginning of the period | $ 18,790,661 | $ 27,094,143 | $ 21,091,297 | $ 25,335,924 | |
Interest incurred | 9,671,286 | 6,126,791 | 23,668,584 | 19,765,176 | |
Interest expensed | (14,496) | (42,373) | (672,153) | (124,026) | |
Interest charged to cost of contract revenues earned | (5,600,052) | (7,763,661) | (21,240,329) | (19,562,174) | |
Capitalized interest at the end of the period | $ 22,847,399 | $ 25,414,900 | $ 22,847,399 | $ 25,414,900 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 1 Months Ended |
Apr. 30, 2020USD ($) | |
Commitments and Contingencies [Abstract] | |
Proceeds from PPP | $ 7,220,207 |
Members' Equity, Mezzanine Eq_2
Members' Equity, Mezzanine Equity and Shareholders' Equity, Redeemable Preferred Units and Common Units (Details) | Jan. 27, 2021USD ($) | Jan. 25, 2021$ / sharesshares | Apr. 30, 2020USD ($)shares | Sep. 30, 2021USD ($)Vote$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares |
Mezzanine Equity [Abstract] | |||||
Temporary equity units issued and outstanding, carrying value | $ | $ 154,892,565 | $ 76,231,451 | |||
IPO [Member] | |||||
Stockholders' Equity [Abstract] | |||||
Common stock shares authorized (in shares) | 350,000,000 | ||||
Common stock par value (in dollars per share) | $ / shares | $ 0.01 | ||||
Class A Common Stock [Member] | |||||
Stockholders' Equity [Abstract] | |||||
Common stock shares authorized (in shares) | 289,000,000 | ||||
Common stock par value (in dollars per share) | $ / shares | $ 0.01 | ||||
Class A Common Stock [Member] | IPO [Member] | |||||
Stockholders' Equity [Abstract] | |||||
Common stock shares authorized (in shares) | 289,000,000 | ||||
Common stock par value (in dollars per share) | $ / shares | $ 0.01 | ||||
Units converted to common stock (in shares) | 21,255,329 | ||||
Class B Common Stock [Member] | |||||
Stockholders' Equity [Abstract] | |||||
Common stock shares authorized (in shares) | 61,000,000 | ||||
Common stock par value (in dollars per share) | $ / shares | $ 0.01 | ||||
Units converted to common stock (in shares) | 60,266,152 | ||||
Class B Common Stock [Member] | IPO [Member] | |||||
Stockholders' Equity [Abstract] | |||||
Common stock shares authorized (in shares) | 61,000,000 | ||||
Common stock par value (in dollars per share) | $ / shares | $ 0.01 | ||||
Units converted to common stock (in shares) | 60,266,153 | ||||
Redeemable Series B Preferred Units [Member] | |||||
Mezzanine Equity [Abstract] | |||||
Temporary equity, shares issued (in shares) | 7,143 | 7,143 | |||
Temporary equity, shares outstanding (in shares) | 7,143 | 7,143 | |||
Temporary equity units issued and outstanding, carrying value | $ | $ 6,897,365 | $ 6,333,036 | |||
Temporary equity, liquidation preference value per unit (in dollars per share) | $ / shares | $ 1,000 | ||||
Liquidation preference, annual cumulative preference distribution percentage | 8.00% | ||||
Voting rights per each unit | Vote | 1 | ||||
Cumulative preferred distributions, unpaid amount | $ | $ 2,667,021 | $ 2,102,692 | |||
Cumulative preferred distributions, per unit (in dollars per share) | $ / shares | $ 373.38 | $ 294.37 | |||
Redemption price per unit (in dollars per share) | $ / shares | $ 1,000 | ||||
Cumulative preferred distributions in arrears | $ | $ 0 | ||||
Redeemable Convertible Series C Preferred Units [Member] | |||||
Mezzanine Equity [Abstract] | |||||
Cumulative preferred distributions, unpaid amount | $ | $ 200,000 | $ 62,500 | |||
Preferred stock redemption (in shares) | 1,000 | ||||
Preferred stock redemption value | $ | 26,000,000 | $ 1,000,000 | |||
Preferred stock discount cost | $ | $ 500,000 |
Members' Equity, Mezzanine Eq_3
Members' Equity, Mezzanine Equity and Shareholders' Equity, Series A Convertible Preferred Stock (Details) | Sep. 29, 2021USD ($)BusinessDay$ / sharesshares | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) |
Convertible Preferred Stock [Abstract] | |||
Proceeds from issuance of convertible preferred stock, net | $ | $ 148,500,000 | $ 0 | |
Series A Convertible Preferred Stock [Member] | |||
Convertible Preferred Stock [Abstract] | |||
Temporary equity, shares issued (in shares) | shares | 150,000 | ||
Temporary equity, liquidation preference value per unit (in dollars per share) | $ 1,000 | ||
Liquidation preference par value (in dollars per share) | $ 0.01 | ||
Proceeds from issuance of convertible preferred stock, net | $ | $ 150,000,000 | ||
Cumulative dividend rate | 9.00% | ||
Period of waiting for conversion after issuance | 5 years | ||
Percentage of liquidation preference in year four to call outstanding stock | 102.00% | ||
Percentage of liquidation preference in year five to call outstanding stock | 101.00% | ||
Trailing period | 90 days | ||
Percentage of average closing price | 20.00% | ||
Floor conversion price (in dollars per share) | $ 4 | ||
Percentage of conversion discount after increase | 25.00% | ||
Ownership percentage | 19.99% | ||
Number of business days in consideration for issuance of shares | BusinessDay | 3 | ||
Number of months in consideration after specified period | 6 months | ||
Additional dividends percentage | 2.00% | ||
Breach period | 30 days |
Equity-Based Compensation (Deta
Equity-Based Compensation (Details) - USD ($) | Jan. 20, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Equity-Based Compensation [Abstract] | ||||||
Unrecognized compensation expense | $ 0 | |||||
Weighted-average period | 2 years 3 months 18 days | |||||
Dream Finders Holdings LLC [Member] | ||||||
Equity-Based Compensation [Abstract] | ||||||
Equity-based compensation expense | $ 0 | $ 1,240,309 | $ 697,054 | |||
2021 Plan [Member] | ||||||
Equity-Based Compensation [Abstract] | ||||||
Equity-based compensation expense | 1,472,037 | $ 0 | 4,032,106 | $ 0 | ||
Unrecognized compensation expense | $ 13,488,366 | $ 13,488,366 | ||||
Weighted-average period | 2 years 3 months 18 days | |||||
Restricted Stock [Member] | 2021 Plan [Member] | ||||||
Equity-Based Compensation [Abstract] | ||||||
Vesting period | 3 years | |||||
Restricted Stock [Member] | 2021 Plan [Member] | Certain Executives and Directors [Member] | ||||||
Equity-Based Compensation [Abstract] | ||||||
Number of shares granted (in shares) | 759,709 | |||||
Weighted-average grant date fair value (in dollars per share) | $ 23.15 | |||||
Restricted Stock [Member] | 2021 Plan [Member] | First Increment at Quarter End [Member] | ||||||
Equity-Based Compensation [Abstract] | ||||||
Vesting ratably increments at end of each quarter | 33.00% | |||||
Non-vested, Non-voting Common Units [Member] | Employees [Member] | ||||||
Equity-Based Compensation [Abstract] | ||||||
Number of non-vesting, non-common units (in shares) | 3,532 | |||||
Non-vesting, non-common units, value | $ 4,741,657 |
Variable Interest Entities an_3
Variable Interest Entities and Investments in Other Entities (Details) | 9 Months Ended | ||
Sep. 30, 2021USD ($)EntityVariationVote | Sep. 30, 2020Entity | Dec. 31, 2020USD ($) | |
Consolidated [Abstract] | |||
Assets | $ 1,232,581,783 | $ 733,680,241 | |
Liabilities | 732,678,204 | 521,657,027 | |
Investment in Unconsolidated VIEs [Abstract] | |||
Investment in unconsolidated VIEs | 6,106,173 | 3,872,089 | |
Other equity method investments | 1,237,624 | 673,260 | |
Total equity method investments | $ 7,343,797 | 4,545,349 | |
Lot Option Contracts [Abstract] | |||
Number of variations of asset-light land financing strategy | Variation | 2 | ||
Percentage of deposit payments on the aggregate purchase price of finished lot option contracts | 10.00% | ||
Percentage of deposit payments on the aggregate purchase price of land bank option contracts | 15.00% | ||
Land bankers equity holders power to direct , Percentage of operating activities of land bank entity | 100.00% | ||
Number of voting rights of land bank entities | Vote | 0 | ||
Total risk of loss related to lot option contracts | $ 156,605,165 | 66,272,347 | |
Unconsolidated VIEs [Member] | |||
Variable Interest Entity or Potential VIE, Information Unavailability, Disclosures [Abstract] | |||
Number of variable interest entities | Entity | 1 | ||
Consolidated VIEs [Member] | |||
Consolidated [Abstract] | |||
Assets | $ 27,895,849 | 50,982,111 | |
Liabilities | $ 10,636,828 | 20,114,132 | |
Unconsolidated VIEs and Other Equity Method Investments [Abstract] | |||
Number of deconsolidated entities | Entity | 0 | ||
Number of new consolidated entities | Entity | 0 | 0 | |
Jet Home Loans [Member] | |||
Investment in Unconsolidated VIEs [Abstract] | |||
Investment in unconsolidated VIEs | $ 6,106,173 | $ 3,872,089 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Taxes [Abstract] | ||||
Valuation allowance | $ 0 | $ 0 | ||
Taxable income | $ 23,246,292 | $ 0 | $ 77,235,617 | $ 0 |
Effective tax rate benefit/expense | 20.00% | 0.00% | 17.00% | 0.00% |
U.S. federal statutory income tax rate | 21.00% | 21.00% |
Segment Reporting (Details)
Segment Reporting (Details) | 1 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | ||||
Jan. 20, 2021USD ($) | Sep. 30, 2021USD ($)Segment | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | ||
Segment Reporting [Abstract] | ||||||||
Number of operating segments | Segment | 12 | |||||||
Number of reportable segments | Segment | 7 | |||||||
Revenues [Abstract] | ||||||||
Revenues | $ 362,983,638 | $ 284,166,827 | $ 1,071,820,104 | $ 672,706,388 | ||||
Net Income [Abstract] | ||||||||
Consolidated net income | $ (1,033,742) | 23,568,015 | 24,077,816 | $ 74,257,388 | 73,223,646 | 44,339,312 | ||
Comprehensive Income [Abstract] | ||||||||
Comprehensive income | 23,568,015 | 24,077,816 | 73,223,646 | 44,339,312 | ||||
Segments [Abstract] | ||||||||
Assets | $ 1,232,581,783 | $ 1,232,581,783 | $ 1,232,581,783 | $ 733,680,241 | ||||
FBC Mortgage, LLC [Member] | ||||||||
Segment Reporting [Abstract] | ||||||||
Remaining ownership percentage | 50.10% | 50.10% | 50.10% | |||||
Jet Home Loans [Member] | ||||||||
Segment Reporting [Abstract] | ||||||||
Percentage of ownership interest | 49.90% | 49.90% | 49.90% | |||||
Operating Segments [Member] | ||||||||
Revenues [Abstract] | ||||||||
Revenues | $ 370,088,959 | 291,181,827 | $ 1,091,770,719 | 695,083,388 | ||||
Net Income [Abstract] | ||||||||
Consolidated net income | 25,184,003 | 25,311,107 | 77,813,178 | 48,992,663 | ||||
Comprehensive Income [Abstract] | ||||||||
Comprehensive income | 25,184,003 | 25,311,107 | 77,813,178 | 48,992,663 | ||||
Segments [Abstract] | ||||||||
Assets | 1,296,797,681 | $ 1,296,797,681 | 1,296,797,681 | 768,504,944 | ||||
Operating Segments [Member] | Jacksonville [Member] | ||||||||
Revenues [Abstract] | ||||||||
Revenues | 114,266,233 | 119,727,582 | 304,784,533 | 273,663,603 | ||||
Net Income [Abstract] | ||||||||
Consolidated net income | 15,893,270 | 10,631,703 | 35,379,244 | 20,084,482 | ||||
Comprehensive Income [Abstract] | ||||||||
Comprehensive income | 15,893,270 | 10,631,703 | 35,379,244 | 20,084,482 | ||||
Segments [Abstract] | ||||||||
Assets | 211,346,145 | 211,346,145 | 211,346,145 | 162,668,740 | ||||
Operating Segments [Member] | Colorado [Member] | ||||||||
Revenues [Abstract] | ||||||||
Revenues | 30,777,384 | 39,041,645 | 70,784,907 | 82,927,544 | ||||
Net Income [Abstract] | ||||||||
Consolidated net income | 2,883,421 | 5,431,919 | 5,723,432 | 9,627,350 | ||||
Comprehensive Income [Abstract] | ||||||||
Comprehensive income | 2,883,421 | 5,431,919 | 5,723,432 | 9,627,350 | ||||
Segments [Abstract] | ||||||||
Assets | 107,427,943 | 107,427,943 | 107,427,943 | 51,605,969 | ||||
Operating Segments [Member] | Orlando [Member] | ||||||||
Revenues [Abstract] | ||||||||
Revenues | 51,187,866 | 36,220,117 | 175,805,150 | 71,787,288 | ||||
Net Income [Abstract] | ||||||||
Consolidated net income | 3,173,384 | 3,303,306 | 13,612,888 | 4,682,466 | ||||
Comprehensive Income [Abstract] | ||||||||
Comprehensive income | 3,173,384 | 3,303,306 | 13,612,888 | 4,682,466 | ||||
Segments [Abstract] | ||||||||
Assets | 133,934,318 | 133,934,318 | 133,934,318 | 77,299,028 | ||||
Operating Segments [Member] | DC Metro [Member] | ||||||||
Revenues [Abstract] | ||||||||
Revenues | 22,288,381 | 32,342,467 | 60,134,866 | 80,192,685 | ||||
Net Income [Abstract] | ||||||||
Consolidated net income | 804,973 | 1,423,273 | 2,803,812 | 2,059,612 | ||||
Comprehensive Income [Abstract] | ||||||||
Comprehensive income | 804,973 | 1,423,273 | 2,803,812 | 2,059,612 | ||||
Segments [Abstract] | ||||||||
Assets | 66,594,450 | 66,594,450 | 66,594,450 | 41,327,694 | ||||
Operating Segments [Member] | The Carolinas (H&H) [Member] | ||||||||
Revenues [Abstract] | ||||||||
Revenues | 77,022,277 | 0 | 270,355,045 | 0 | ||||
Net Income [Abstract] | ||||||||
Consolidated net income | 2,185,613 | 0 | 7,409,557 | 0 | ||||
Comprehensive Income [Abstract] | ||||||||
Comprehensive income | 2,185,613 | 0 | 7,409,557 | 0 | ||||
Segments [Abstract] | ||||||||
Assets | 221,583,127 | 221,583,127 | 221,583,127 | 161,242,384 | ||||
Operating Segments [Member] | Jet Home Loans [Member] | ||||||||
Revenues [Abstract] | ||||||||
Revenues | 7,105,321 | 7,015,000 | 19,950,615 | 22,377,000 | ||||
Net Income [Abstract] | ||||||||
Consolidated net income | 2,585,411 | 2,790,850 | 7,633,428 | 9,497,000 | ||||
Comprehensive Income [Abstract] | ||||||||
Comprehensive income | 2,585,411 | 2,790,850 | 7,633,428 | 9,497,000 | ||||
Segments [Abstract] | ||||||||
Assets | 70,442,668 | 70,442,668 | 70,442,668 | 38,696,793 | ||||
Operating Segments [Member] | Other [Member] | ||||||||
Revenues [Abstract] | ||||||||
Revenues | 67,441,497 | 56,835,016 | 189,955,603 | 164,135,268 | ||||
Net Income [Abstract] | ||||||||
Consolidated net income | (2,342,069) | 1,730,056 | 5,250,817 | 3,041,753 | ||||
Comprehensive Income [Abstract] | ||||||||
Comprehensive income | (2,342,069) | 1,730,056 | 5,250,817 | 3,041,753 | ||||
Segments [Abstract] | ||||||||
Assets | [1] | 485,469,030 | 485,469,030 | 485,469,030 | 235,664,336 | |||
Reconciling Items from Equity Method Investments [Member] | ||||||||
Revenues [Abstract] | ||||||||
Revenues | (7,105,321) | (7,015,000) | (19,950,615) | (22,377,000) | ||||
Net Income [Abstract] | ||||||||
Consolidated net income | (1,615,988) | (1,233,291) | (4,589,532) | (4,653,351) | ||||
Comprehensive Income [Abstract] | ||||||||
Comprehensive income | (1,615,988) | $ (1,233,291) | (4,589,532) | $ (4,653,351) | ||||
Segments [Abstract] | ||||||||
Assets | $ (64,215,898) | $ (64,215,898) | $ (64,215,898) | $ (34,824,703) | ||||
[1] | Other includes the Company’s title operations, homebuilding operations in non-reportable segments, operations of the corporate component, and corporate assets such as cash and cash equivalents, cash held in trust, prepaid insurance, operating and financing leases, lot deposits, goodwill, as well as property and equipment. |
Related Party Transactions (Det
Related Party Transactions (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021USD ($)ProjectJointVentureLotshares | Sep. 30, 2021USD ($)ProjectLotJointVentureshares | Dec. 31, 2020USD ($)Lot | Dec. 31, 2019USD ($) | |
DFH Investors LLC [Member] | Series A Preferred Units [Member] | ||||
Consolidated Joint Ventures [Abstract] | ||||
Number of preferred shares owned (in shares) | shares | 15,400 | 15,400 | ||
Percentage of ownership interest | 11.65% | 11.65% | ||
Dream Finders Homes LLC and DFH Investors LLC [Member] | ||||
Consolidated Joint Ventures [Abstract] | ||||
Percentage of ownership interest | 65.33% | 65.33% | ||
Total committed capital | $ 1,400,000 | $ 1,400,000 | ||
Fund I [Member] | ||||
Consolidated Joint Ventures [Abstract] | ||||
Number of joint ventures entered | JointVenture | 6 | 6 | ||
Number of land bank projects | Project | 10 | 10 | ||
Total committed capital | $ 36,706,163 | 36,706,163 | ||
Percentage of total committed capital invested | 3.81% | |||
Fund I [Member] | Directors Executive Officers and Management [Member] | ||||
Consolidated Joint Ventures [Abstract] | ||||
Total committed capital | $ 8,725,000 | $ 8,725,000 | ||
Percentage of total committed capital invested | 23.77% | 23.77% | ||
Fund II [Member] | ||||
Consolidated Joint Ventures [Abstract] | ||||
Percentage of ownership interest | 72.00% | 72.00% | ||
Total committed capital | $ 3,000,000 | |||
Percentage of total committed capital invested | 1.50% | |||
Fund II [Member] | Directors Executive Officers and Management [Member] | ||||
Consolidated Joint Ventures [Abstract] | ||||
Total committed capital | $ 33,900,000 | $ 0 | ||
Percentage of total committed capital invested | 17.00% | 0.00% | ||
Fund II [Member] | Maximum [Member] | Memorandum of Right of First Offer [Member] | ||||
Consolidated Joint Ventures [Abstract] | ||||
Total committed capital | $ 20,000,000 | |||
DF Management GP II, LLC [Member] | ||||
Consolidated Joint Ventures [Abstract] | ||||
Percentage of ownership interest | 26.13% | 26.13% | ||
Total committed capital | $ 155,000,000 | |||
DF Management GP II, LLC [Member] | Minimum [Member] | ||||
Consolidated Joint Ventures [Abstract] | ||||
Total committed capital | $ 200,000,000 | |||
DF Capital [Member] | ||||
Consolidated Joint Ventures [Abstract] | ||||
Percentage of ownership interest | 49.00% | 49.00% | ||
Amount invested in funds | $ 180,000 | |||
Number of additional lots controlled | Lot | 397 | 595 | ||
Number of lots purchased in transaction | Lot | 14 | 198 | ||
Outstanding lot deposit balance | $ 3,837,426 | $ 3,837,426 | ||
Lot option fees paid related to transactions | 27,474 | 273,890 | ||
LB Parker Owners, LLC [Member] | ||||
Consolidated Joint Ventures [Abstract] | ||||
Land banking transaction, acquisition of real property | 3,300,000 | |||
Varde Capital [Member] | ||||
Consolidated Joint Ventures [Abstract] | ||||
Principal amount | 18,000,000 | 18,000,000 | ||
Outstanding loan balance | $ 717,642 | $ 717,642 | $ 1,700,000 | |
Jet Home Loans [Member] | ||||
Consolidated Joint Ventures [Abstract] | ||||
Percentage of ownership interest | 49.90% | 49.90% | ||
DFC Seminole Crossing, LLC [Member] | ||||
Consolidated Joint Ventures [Abstract] | ||||
Guarantees in connection with loan | $ 5,670,000 | $ 5,670,000 | $ 5,670,000 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings per Share [Abstract] | ||||
Net and comprehensive income attributable to Dream Finders Homes, Inc. | $ 19,135,499 | $ 22,561,061 | $ 63,830,023 | $ 40,865,196 |
Less: Preferred dividends | 193,903 | 1,197,100 | ||
Add: Loss prior to reorganization attributable to DFH LLC members | 0 | (1,244,083) | ||
Net and comprehensive income attributable to common stockholders | $ 18,941,596 | $ 63,877,006 | ||
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||||
Weighted-average number of shares outstanding used to calculate basic EPS (in shares) | 92,521,482 | 0 | 92,521,482 | 0 |
Dilutive securities: | ||||
Restricted stock (in shares) | 173,715 | 137,396 | ||
Weighted-average number of shares and share equivalents outstanding used to calculate diluted EPS (in shares) | 92,695,197 | 0 | 92,658,878 | 0 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - MHI Acquisition [Member] $ in Millions | Oct. 01, 2021USD ($)Period |
MHI Acquisition [Abstract] | |
Cash paid for business acquisition | $ 471 |
Business acquisition, liabilities assumed | $ 97 |
Period after closing, subject to minimum pre-tax income hurdles and thresholds and overhead expenses | 48 months |
Business acquisition, cash on hand | $ 20 |
Revolving Credit Facility [Member] | |
MHI Acquisition [Abstract] | |
Lines of credit | $ 300 |
Maximum [Member] | |
MHI Acquisition [Abstract] | |
Additional consideration on pre-tax net income, percentage | 25.00% |
Periods of pre-tax net income | Period | 5 |