LGIH - management integrity

I know a lot of people on the board invested in LGIH homes. As per Saul’s commandments I am trying to do my own due diligence on the company. The only thing that leaves me scratching my head is the management team and whether the company is run with the best interest of shareholders. Again, I am new to investing and truly glad to have found this board and just looking for some pointers. So, while perusing the two most recent 10Q and the latest 10K filings I noticed that the company had an agreement with the father of the CEO for consulting services to the tune of 100K per year. The agreement was terminated in June of 2016. Also, LGI Homes has an option to purchase $8.0M worth of lots from a family member of the CEO, as well as ended up buying 15.4M worth of land in South Carolina from a family member of the CEO. In addition, the uncle of the CEO sits on the Board of Directors, and a cousin of the CEO is an Executive Vice President of Acquisitions. Not sure if any of this should be a cause for concern since Real Estate is a family business and I am not sure as a beginning investor how to properly evaluate integrity of management. So, any feedback would be greatly appreciated.



I don’t know, either, but I think it’s better that you noticed and mentioned this than if you hadn’t.


Nepotism is alive and well in America!

…just wish I had better connected family members!