SecProbe.io

September 11, 2013

Via e -mail

Eric Lipar
Chief Executive Officer
LGI Homes, Inc.
1450 Lake Robbins Drive, Suite 430
The Woodlands, Texas, 77380

Re: LGI Homes, Inc.
Registration Statement on Form S-1
Submitted August  28, 2013
  File No. 333 -190853

Dear Mr. Lipar :

Please respond to this letter by providing the requested information and submitting an
amended registration statement .  If you do not believe our comments apply to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.

After reviewing the information you provide in response to these  comments  and your
amended regis tration statement,  we may have  additional comments.

General

1. We have read your response to comment 33 from our letter dated August 6, 2013 as well
as your related revised disclosures .  We note that you continue to present results of
operations and other financial and operational data throughout this prospectus which
aggregates the historical results/data of your predecessor and the LGI/GTIS Joint
Ventures.  We do not believe your use o f this aggregated data in the context of discussing
your business and using this data when using terms like “we”, “our”, and “ours” as you
have done in many sections of the prospectus including but not limited to Our Company,
Our Competitive Strengths, Our  Business and Management’s Discussion and Analysis of
Financial Condition and Results of Operations is not appropriate.  We note that it is
unclear whether your predecessor or your joint ventures own various properties, or even
whether the employees that y ou discuss in your Business section are employees of your
predecessor or of your joint ventures.  Please ensure that references to the “company,”
“registrant” or “us,” “we,” or “our” refer to the true predecessor entity.  Further the
Explanatory Note defin ition of terms is confusing and should be removed or revised.   We
have the following further  comments in this regard:

Eric Lipar
LGI Homes, Inc.
September 11, 2013
Page 2

  You disclose that you believe the presentation of certain aggregated financial data
provides investors with a meaningful comparison of yo ur results of operations and is
necessary for investors to understand your financial condition and results of
operations.  However, we note that aggregated financial information is not related to
the results of operations of your predecessor, the entity fo r which the information
throughout your prospectus should be based.  In this regard, we specifically note that:

o The information you provide in your audited financial statements as well as in
response to prior comment 68, indicates that you did not consoli date the
LGI/GTIS Joint Ventures because, in part, other parties shared in the power to
direct the activities of the LGI/GTIS Joint Ventures that most significantly
impact their economic performance. It therefore is not appropriate to provide
financial dat a which implies that you had such power; and

o The information you have provided under the section, “Factors Affecting
Comparability” on page 69 further highlights why the presentation of
aggregated information is not appropriate.

 Please remove all discus sions of results of operations and other financial and
operational data which have provided on an aggregated basis.  To the extent you
believe the presentation of certain financial and operational data may be meaningful
on a pro forma basis, please ensure that information is presented in the context of
your current pro forma financial information; and

 Please revise your disclosures throughout the prospectus, including, but not limited
to, results of operations and other financial and operational data prese nted under Our
Company, Our Competitive Strengths, Our Business and Management’s Discussion
and Analysis of Financial Condition and Results of Operations to present and discuss
this information as it relates to your predecessor.

Public Homebuilder Peers , page ii

2. Please clarify whether you face competition primarily from public companies.  If not,
please revise your prospectus throughout to make this clear, placing statements about
public peer companies into this larger context and revising the prominence  of this
definition.

Summary, page one

Our Company, page one

3. We note the supplemental information you have provided for your statements on pages
one, five, 63, 137, and 144, that you offer “superior value.”  It is unclear how the

Eric Lipar
LGI Homes, Inc.
September 11, 2013
Page 3

 information you have provided supports this statement.  Please provide us with support
for this statement or remove it.

4. We note your response to comment eight of our letter dated August 6, 2013.  Please
revise your statements on pages two, four, five, 138, 142, and 144 to mak e more apparent
the distance between metropolitan centers and your communities. Your current language,
with the ambiguous word “proximity,” could be read to imply that your communities are
located much closer to the urban centers of your various markets th an they actually are.

5. Please similarly revise your references to your “strong land position.”  You state that the
company’s statement is based on the fact that it has seven years of land supply.  The
phrase “strong land position” does not read as a statem ent of the size of your potential
inventory, but rather a qualitative statement regarding the land your hold and its
desirability.

Our Competitive Strengths, page three

6. We re -issue comment nine of our letter dated August 6, 2013.  Your summary still
appe ars unbalanced, as does your Business section.  In addition, your statement on page
four that “[if] housing demand and population growth slows in [the states in which you
operate], [you] may not realize a competitive advantage as a result of the markets in
which we focus” is unclear.  As you only compete in these markets, slowing housing
demand and population growth would affect all of your competitors.

Unaudited Pro Forma Financial Information, page 49

General

7. Please address the following comments as t hey relate to your pro forma financial
information presented on pages F -3 through F -13.  Since the information presented on
pages F -3 through F -13 and pages 49 through 59 appear duplicative, please consider
presenting this pro forma financial information o nly once.

8. Where you have more than one pro forma adjustment  impacting a line item in your pro
forma financial statements , please provide additional information so that a reader can
fully understand the nature of the adjustment and how such adjustment was calculated.
For instance, please disclose the components that make up the $1,983 adjustment to
deferred tax liabilities, net as o f June 30, 2013.  While you have referenced notes (b) and
(d), we note that the fourth bullet in note (b) discusses a $31,000 deferred tax liability
adjustment and note (d) discusses a $26,000 net deferred income tax liability.  These two
adjustments do no t equate to the $1,983 adjustment nor do these footnotes explain how
such adjustments were calculated.

Eric Lipar
LGI Homes, Inc.
September 11, 2013
Page 4

 Unaudited Pro Forma Financial Information, page 49

9. We note your response to prior comment 21.  We have the following comments on your
revised pro for ma financial information.

 You disclose that your pro forma statements of operations for the six months ended
June 30, 2013 and the year ended December 31, 2012 do not reflect an increase in the
cost of sales associated with the step up of the real estate inventory since the step up
does not have a continuing impact on the results of your operations due to the short
term (less than one year) impact on your financial performance. Please note that the
short term nature of the impact does not make the adjustme nt non -recurring.  As such,
please revise your pro forma statement of operations to reflect the increase in cost of
sales related to the step -up of the real estate inventory ;

 Please expand your pro forma footnotes to provide additional details regarding the
significant assumptions and estimates used to arrive at the pro forma amounts.  For
example, you indicate that for your pro forma income tax adjustment you have
assumed you will qualify for the Domestic Production Activities Deduction (DPAD).
Please expand your disclosures to provide your basis for this assumption and clarify
how this adjustment is factually supportable; and

 We note you have added a pro forma adjustment t o eliminate compensation to
Thomas Lipar because he will perform limited duties at a reduced level of
compensation under a consulting agreement subsequent to this offering.  Since we
assume that the compensation historic ally paid to Mr. Lipar was commensur ate with
the duties he performed, please revise to eliminate this adjustment.

10. We note your response to prior comment 22.  With regard to the pool of employees that
are not currently participating in the existing profit sharing plan, please expand the fo urth
bullet of note (b) on page 57 and the third bullet of note (b) on page 59 to disclose (i) the
terms and number of equity awards as well as how you determined the pro forma
compensation expense.   Please also fully explain how these equity awards are a ccounted
for in your determination of pro forma earnings per share.

11. We have read your response to comment 24 from our letter dated August 6, 2013 .  Given
the proximity of the contributions made by the limited partners to LGI Investment Fund
III, L.P. to y our filing of your initial public offer, please explain the business purpose
related the commitment to pay 1.5 times the aggregate capital contributions.  Also
address what consideration was given to whether, in light of this commitment, the non -
controllin g interest in LGI Investment Fund III, L.P should be reflected and accounted for
as a redeemable non -controlling interest.

Eric Lipar
LGI Homes, Inc.
September 11, 2013
Page 5

 Notes to the Unaudited Pro Forma Balance Sheet, page 53

12. We note your response to prior comment 27 from our letter dated August 6,  2013.  You
indicate that in using a relief -from -royalty valuation model, you used a .5% royalty rate
which is indicative of your predecessor’s operational control of the LGI/GTSI Joint
Ventures.  Please clarify what you mean by this and why your predecess or’s operational
control of the LGI/GTSI Joint Ventures impacted your determination of an appropriate
royalty rate.  Please also explain how you determined the appropriateness of a 25%
discount rate.

Notes to Unaudited Pro Forma Statement of Operations fo r Six Months Ended June 30 , 2013,
page 56

13. We note your response to prior comment 26 from our letter dated August 6, 2013.   Please
include a footnote that details how you have determined the weighted average common
shares outstanding for your basic and dil uted earnings per share for the year ended
December 31, 2012 and the six months ended June 30, 2013.  To the extent applicable,
disclose the shares not included in your determination of diluted because to do so would
have been antidilutive.  Refer to ASC 2 60-10-50-1(a) and 50 -1(c).

Management’s Discussion and Analysis of Financial Condition and Results of Operations, page
63

General

14. We reissue comment 29 our letter dated August 6, 2013.  Please include a discussion
comparing the size and nature of the new communities to your existing communities.

15. Please disclose the effects of the costs of raw materials on your results up operations .
See comment 31 of our letter dated August 6, 2013.

16. Please expand your discussion here and elsewhere as appropriate to discuss your
cancellation rate, conversion rates, and other material indicators of results of operations
salient to the homebuilding i ndustry.  We note your response to comment 32 of our letter
dated August 6, 2013, and understand that you do not believe these indicators are
germane to your business model.  However, they are standard for your industry and allow
investors to compare your performance other participants in the homebuilding industry.

Overview, page 63

17. We note your statement in the final sentence of this page that you have achieved
profitability within six months of your first home closings in each of your new
communities.  Please reconcile this statement with your recent entries into the Orlando

Eric Lipar
LGI Homes, Inc.
September 11, 2013
Page 6

 and Atlanta markets, and your statements elsewhere qualifying this statement by limiting
it to your markets in Texas and Arizona.

18. Please expand your discussion here and elsewhere to  discuss the effects on results of
operations and capital expenditures of your entries into the Atlanta and Orlando markets.
Please see Item 303(a)(3)(i) of Regulation S -K.  Please also clarify the manner in which
your material capital commitments will be  funded.

Results of Operations, page 72

19. We have read your response to comment 37 from our letter dated August 6, 2013 and
have the following comments on your discussion of results of operations:

 You disclose on page 66 that based on your business model you believe that the
number of completed homes in inventory and  homes in progress in inventory at the
end of a reporting period provide more meaningful information to investors than
cancellation rates, conversion rates, new orders and backlog.  However, we  continue
to believe the above information is relevant to an investors understanding of your
business.  Please revise your filing to discuss new orders (units and aggregated dollar
value), cancellation rates, and backlog (units, average sales price and agg regated
dollar value) for each period and include a discussion for any material changes in this
data period over period.  Please consider providing this information in a tabular
presentation. Refer to Section 501.2 of the Financial Reporting Codification.  Please
also provide this information in your Selected Financial Data;

 You state that the impact of raw material prices on the cost of goods sold period over
period was not material.  However, based on your disclosure on pages 74 and 76
changes in raw ma terials did impact your margins.  Please quantify the increase in
raw material so that an investor can assess the impact of raw material increases on
your margins; and

 Please discuss Predecessor gross margin, operating income and net income for each
period presented.

Critical Accounting Policies, page 81

Real Estate Inventory and Cost of Home Sales, page 82

20. You indicate that when a home is closed, you record an accrual for the remaining
amounts owed to the subcontractor and other costs related to the construction of the
home.  Please more fully explain this statement.  Specifically explain why you need to
record an accrual for the remaining amounts owed to the subcontractor and other costs
related to the construction of the home as we assume these costs are capitalized to real
estate inventory as they are incurred.

Eric Lipar
LGI Homes, Inc.
September 11, 2013
Page 7

 Investments in Unconsolidated Entities and Variable Interest Entities (VIEs), page 83

21. You indicate that in your judgment you have determined that the six joint ventures you
are invested in represent variable interest entities (VIEs).  Please expand your disclosures
to address these judgments.

22. You indicate that you must use your judgment to determine f you have substantive
control or expiries significant influence over these entities.  Please revise to clarify, if
true, that once you make the determination that these joint ventures are VIEs, you  then
determine if you are the primary beneficiary of these VIEs.  With reference to the
authoritative literature, identify the judgments and/or assumptions you made to determine
whether you the primary beneficiary.  In this regard, we note that some of th e information
you have provided in response to prior comment