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Business Combinations (Details) - USD ($)

2 Months Ended

3 Months Ended

5 Months Ended

8 Months Ended

12 Months Ended

Sep. 30, 2018

Apr. 26, 2018

Jun. 30, 2018

Dec. 31, 2018

Sep. 30, 2018

Dec. 31, 2018

Dec. 31, 2019

Dec. 31, 2018

Dec. 31, 2017

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

BUSINESS COMBINATION

Acquisition of GRBK GHO Homes, LLC

On April 26, 2018 (the “Acquisition Date”), following a series of transactions, the Company acquired substantially all of the assets and assumed certain liabilities of GHO Homes Corporation and its affiliates (“GHO”) through a newly formed subsidiary, GRBK GHO Homes, LLC (“GRBK GHO”), in which the Company holds an 80% controlling interest. The owner of GHO contributed $8.3 million of net assets to GRBK GHO in an exchange for a 20% interest in GRBK GHO. The minority partner of GRBK GHO serves as the president of GRBK GHO.

GRBK GHO operates primarily in the Vero Beach, Florida market and is engaged in land and lot development, as well as all aspects of the homebuilding process. The acquisition allowed the Company to expand its operations into a new geographic market.

The Company consolidates the financial statements of GRBK GHO as the Company owns 80% of the outstanding voting shares of the builder. The noncontrolling interest attributable to the 20% minority interest owned by our Florida-based partner is included as redeemable noncontrolling interest in equity of consolidated subsidiary in the Company’s consolidated financial statements.

The original consideration of $42.2 million consisted of $33.2 million in cash paid by the Company to the owner of GHO, $8.3 million of assets contributed by the owner of GHO, and an estimated $0.6 million of contingent consideration. Following completion of the audit of the balance sheet of GHO as of the Acquisition Date, the purchase price was adjusted by $2.0 million that was contributed by the Company in cash, and the value of contributed assets from the minority partner was increased by $0.5 million. Contingent consideration was adjusted to $0.5 million based on finalization of valuation procedures. Thus, the final total consideration was $44.6 million. Total consideration for the Company’s 80% interest in GRBK GHO was $35.8 million.

Under the terms of the purchase agreement, the Company may be obligated to pay contingent consideration to our partner if certain annual performance targets are met over the three-year period following the Acquisition Date. The contingent consideration amounts are not contractually limited.

In accordance with ASC 805, all material assets and liabilities, including contingent consideration, were measured and recognized at fair value as of the date of the acquisition to reflect the purchase price.

The following is a summary of fair value of assets acquired and liabilities assumed (in thousands):



Assets acquired
Cash	$	8,399
Inventory	45,005
Property and equipment	1,462
Intangible assets - trade name	850
Intangible assets - home construction contracts	290
Goodwill ⁽¹⁾	680
Other assets	898
Total assets	$	57,584
Liabilities assumed
Note payable	$	300
Accrued expenses and other liabilities	5,486
Customer deposits	9,073
Total liabilities	$	14,859
Redeemable noncontrolling interest	$	6,951
Net assets acquired⁽²⁾	$	35,774


(1)	Goodwill is expected to be fully deductible for tax purposes.


(2)	Contingent consideration of $0.5 million is included in the fair value of net assets acquired.

The final purchase price allocation reflected above is based upon estimates and assumptions. The Company engaged a valuation firm to assist in the allocation of the purchase price, and valuation procedures related to the acquired assets and assumed liabilities have been completed. The estimated cash flows and ultimate valuation have been significantly affected by estimated discount rates, estimates related to expected average selling prices and sales incentives, expected sales pace and cancellation rates, expected land development and construction timelines, and anticipated land development, construction, and overhead costs and may vary significantly between communities.

The valuation of redeemable noncontrolling interest is based on a market approach, considering the equity contribution made by the 20% partner, adjusted for control and marketability factors.

Acquired inventory consisted of both land under development and work in process inventory, as well as completed homes held for sale. The estimated fair value of real estate inventory was determined on a community-by-community basis, primarily using the income approach which derives a value using a discounted cash flow for income-producing real property. The values of work in process and completed home inventory were estimated based upon the stage of production of each unit and a gross margin that we believe a market participant would require to complete the remaining construction and sales and marketing efforts through the sale of the homes. The stage of production, as of the acquisition date, ranged from recently started lots to fully completed homes. A sales comparison approach was used for land for which significant lot development had not yet begun as of the Acquisition Date. An income approach was also utilized to value mechanic’s lien home construction contracts acquired.

The estimated fair values of the acquired trade name, GHO Homes, and the home construction contracts, were determined using the relief-from-royalty method under the income approach, which involved assumptions related to revenue growth, market awareness and useful life.

The supplemental pro forma information for revenue and earnings of the Company as though the business combination had occurred as of January 1, 2017 is impractical to provide due to the fact that consolidated reporting for the specific group of entities acquired had not existed prior to the acquisition.

During the year ended December 31, 2018, we had incurred transaction costs of $0.5 million related to the business combination, which have been expensed as incurred and are included in selling, general and administrative expense.

Intangible Assets

The amortization of the acquired intangible assets of $0.2 million for the period from April 26, 2018 through December 31, 2018 was recorded in selling, general and administrative expense in the consolidated statements of income. The accumulated amortization of the acquired intangible assets was $0.2 million as of December 31, 2018.

The estimated fair value of the acquired home construction contracts intangible asset was amortized to cost of residential units as income on the related contracts was earned, over a period of eleven months. As of December 31, 2019, all the home construction contracts have been completed, and the carrying value of the related intangible asset and accumulated amortization were written off with no impact to net income. As of December 31, 2019, all the home construction contracts have been completed, and the carrying value of the related intangible asset and accumulated amortization were written off with no impact to net income.

The amortization of the acquired trade name of $0.1 million for the year ended December 31, 2019 was recorded in selling, general and administrative expense in the consolidated statements of income. The accumulated amortization of the acquired trade name was $0.1 million as of December 31, 2019.

The estimated amortization expense related to the acquired trade name for each of the next five years as of December 31, 2019 is as follows (in thousands):



2020	$	85
2021	85
2022	85
2023	85
2024	85
Total	$	425

Goodwill

The allocation to goodwill represents the excess of the purchase price, including contingent consideration, over the estimated fair value of assets acquired and liabilities assumed. Goodwill results primarily from operational synergies expected from the business combination.

The Company performed its annual goodwill impairment test during the fourth quarter of 2019 by completing a qualitative assessment in accordance with ASC 350. The Company determined that it was not more likely than not that the reporting unit’s estimated fair value was more than its carrying value and, therefore, the two-step goodwill impairment test was unnecessary. The Company did not record any goodwill impairment during the years ended December 31, 2019 and 2018.

Contingent Consideration

The performance targets specified in the purchase agreement were met for the period from April 26, 2018 through December 31, 2018, and contingent consideration of $1.8 million was earned by the minority partner and paid by the Company in April 2019 in addition to a $0.5 million distribution of income. The performance targets specified in the purchase agreement were met for the period from January 1, 2019 through December 31, 2019, and the contingent consideration of $5.3 million was earned by the minority partner. As of December 31, 2019, the estimate of the undiscounted contingent consideration payouts for the period from January 1, 2020 through April 26, 2021 was $0. The change in the range of estimates of the undiscounted contingent consideration compared to the range of estimates disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 was due to revision of the Company’s forecasts of GRBK GHO profits and capital requirements, as well as reduced volatility of earnings.

Redeemable Noncontrolling Interest in Equity of Consolidated Subsidiary

As part of the GRBK GHO business combination, we entered into a put/call agreement (“Put/Call Agreement”) with respect to the equity interest in the joint venture held by the minority partner. The Put/Call Agreement provided that the 20% ownership interest in GRBK GHO held by the minority partner would be subject to put and purchase options starting in April 2021. Refer to Note 18 for additional information on subsequent events. The exercise price would be based on the financial results of GRBK GHO for the three years prior to exercise of the option. If the minority partner does not exercise the put option, we have the option, but not the obligation, to buy the 20% interest in GRBK GHO from our partner.

Based on the nature of the put/call structure, the noncontrolling interest attributable to the 20% minority interest owned by our Florida-based partner is included as redeemable noncontrolling interest in equity of consolidated subsidiary in the Company’s consolidated financial statements.

The following table shows the changes in redeemable noncontrolling interest in equity of consolidated subsidiary during the year ended December 31, 2019 (in thousands):



	Year Ended December 31, 2019
Redeemable noncontrolling interest, beginning of period	$	8,531
Net income attributable to redeemable noncontrolling interest partner	3,462
Distributions of income to redeemable noncontrolling interest partner	(527		)
Accretion of redeemable noncontrolling interest	2,145
Redeemable noncontrolling interest, end of period	$	13,611

Redeemable Noncontrolling Interest [Table Text Block]

The following table shows the changes in redeemable noncontrolling interest in equity of consolidated subsidiary during the year ended December 31, 2019 (in thousands):



	Year Ended December 31, 2019
Redeemable noncontrolling interest, beginning of period	$	8,531
Net income attributable to redeemable noncontrolling interest partner	3,462
Distributions of income to redeemable noncontrolling interest partner	(527		)
Accretion of redeemable noncontrolling interest	2,145
Redeemable noncontrolling interest, end of period	$	13,611

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The following is a summary of fair value of assets acquired and liabilities assumed (in thousands):



Assets acquired
Cash	$	8,399
Inventory	45,005
Property and equipment	1,462
Intangible assets - trade name	850
Intangible assets - home construction contracts	290
Goodwill ⁽¹⁾	680
Other assets	898
Total assets	$	57,584
Liabilities assumed
Note payable	$	300
Accrued expenses and other liabilities	5,486
Customer deposits	9,073
Total liabilities	$	14,859
Redeemable noncontrolling interest	$	6,951
Net assets acquired⁽²⁾	$	35,774


(1)	Goodwill is expected to be fully deductible for tax purposes.

(2)

Contingent consideration of $0.5 million is included in the fair value of net assets acquired.

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

The estimated amortization expense related to the acquired trade name for each of the next five years as of December 31, 2019 is as follows (in thousands):