Saturday, August 17, 2019

Two Canadian Modular Factories Lay Off Almost Half Their Workers

Metric Modular says a “sharp decline” in housing orders is behind the decision to layoff a third of its Penticton, British Columbia, Canada workforce this week.

Permanent layoff notices were handed to 49 employees Wednesday, two days after the Government Street plant had returned from a two-week shutdown.

“The downturn in our orders is consistent with a broader decline in the housing market and as such we do not see reason to anticipate an increase in demand in the short term,” said company president Stephen Branch in a statement to Castanet.

“In light of these facts, we had to make the difficult decision to lay off a significant part of our Penticton work force and ensure that our Penticton facility has a sustainable work force in relation to the work at hand in our existing backlog.”

Branch said they know the impact the changes can have on individuals, families and the community in general, “but again felt this necessary to ensure a sustainable work force and company. As a company, we are still committed to building single-family homes and will work with our dealer networks to continue to develop this market.”

Metric Modular parent company Triple M took over the location from Britco in May 2017, holding a celebration last this spring to mark the 100th home coming off the line since then. The company also constructed the modular social development nearing completion on Winnipeg Street.

Moduline, another Penticton, BC modular home manufacturer cut about half its workforce (120 people) back in May.

Thursday, August 15, 2019

Demand Growing for Affordable Senior Housing in Rural Areas

Millennials aren’t the only segment of the population having a hard finding affordable housing, especially in high density areas. Seniors are also having the same problem.

As more and more Baby Boomers begin looking for affordable places to call home in retirement, many are finding they cannot afford market rate independent living, assisted living or memory care.

They are finding affordable senior housing especially hard in low-density areas where they grew up, raised their families and know just about everybody in the area.

Having worked and volunteered in small towns and cities under 30,000, they want to stay there. Most seniors that are downsizing don’t want to be forced to move in with their children and their families.

For country born and raised seniors, there are very few if any affordable 55+ communities in their neck of the woods. They are either forced to move into areas of town reserved for Section 8 because the rents are affordable or give up a lot of necessities in order to afford senior living housing.

Developers that see big city as the place to build affordable senior living rarely want to invest in building out a 40-60 unit building in smaller towns simply because they either didn’t know it was needed or they couldn’t justify the cost of such a small project in such a rural setting.

For modular home builders, this could be a real wake up call to generate more sales, either by teaming up with a local monied investor and acting as their GC or doing it themselves by purchasing a small parcel of land with public utilities available and using modular construction to build out a well designed but affordable senior community of 20-30 homes.

Builders could work with current assisted living facilities to provide turnkey homes for them in rural areas.

Once you get away from either the West or East Coast regions and begin moving inland, there are many small areas that need affordable senior housing.

Nearly one-third of households age 65 or older spend at least 30% of their income for housing, and more than half of that total pay over 50%.

Affordable senior housing is NOT low income senior housing which is what HUD’s Section 202 addresses.

Find a way to give those average seniors in low-density areas a rent between $950 and $1,100 a month with no yard maintenance and the seniors will beat a path to your door.

Mid-August Job Openings

Robert Sage Careers just sent over their Mid-August job openings in the modular housing industry.

If you need to change the view from your desk, maybe it’s time to contact the people below and learn about the other views available.

> Modular/Architects/N.E. > Modular/Engineers/N.E. > Modular/Director of Construction/N.E. > Modular/Director of Manufacturing/N.E. > Modular/Director of Estimating/N.E. > Modular/ Sales Custom/SW > Modular/CAD Draftsman/Midwest > Modular/Assistant Production Manager/SW > Modular/Production Supervisor/SW > Modular/Designer/AutoCAD/Revit/SW > Modular/Engineering Manager/SW > Modular/Materials Manager/S.W. > Modular/Asst. Materials Manager/S.W. > Modular/Industrial Engineer/S.W. > Modular/Project Manager/on site out in field/S.W. > Modular/Drafting/Eng./Upper Midwest > Modular/Estimating Manager – Field/N.E. > Modular/Director of Estimating – Field and Factory/N.E. > Modular/Sr. Project Manager – Travel required/N.E. > Modular/Sales – Permanent Modular Construction/N.E. > Modular/3rd Party Inspector/S.E. X 2 > Modular/Asst. Production Manager/S.W. > Modular/CFO/N.E. > Modular/Plant Mgr or VP of Mfg./Midwest > Modular/Licensed Architect AIA/Midwest > Modular/Engineer P.E./Midwest > Modular/Q.C Manager/Midwest > Modular/Revit Designer/Midwest > Modular/Controller/Midwest > Modular/General Contractor/Midwest > Modular/Sales Manager/N.E. > Modular/Production/N.E. > Modular/Selling Branch Manager/S.W. > Modular/Major Projects/Houston to AL/S.W. > Modular/Major Projects/SC to FL/S.W. > Modular/MEP Revit Designer > Modular/Auto CAD Drafter/Midwest > Modular/Designer/Midwest

For more information on these available positions, please contact us at sales@robertsagecareers or

Wednesday, August 14, 2019

Here's Your Ticket for the Next Housing Downhill Ride

With “Modular” construction now the latest buzzword at seminars around the world, investors are pouring millions and millions of dollars into startups, each shouting “We are the next big thing in affordable modular housing”.

The problem with all those millions flowing into unproven modular housing startups is something called a recession and all indicators we could be headed for one within the next 12-24 months.

While a flattening yield curve is typically something investors fear, President Trump earlier this month called on the Federal Reserve to cut rates in order to flatten the yield curve further and spark inflation – something needed to jump start a slowing economy.

Interest rates on mortgages recently dropped to under 4% as part of that flattening.

Preparing for a recession does not mean panicking about the possibility of it happening. It simply means that areas of your business that were not watched carefully before now must be put front and center with many given renewed efforts.

Protect Cash Flow. Like most of us, putting money aside for a rainy day (recession) is a lot easier said than done. You will have cash shortfalls. Your business’s very survival may depend on how you maneuver through those shortfalls. If you start with some cash in your bank account, it will be easier to focus on cash flow and you won’t stress about the shortfalls.

Review Inventory Management Practices. 43% of small business owners in the U.S. still use pen-and-paper or spreadsheets to track inventory or don’t track inventory at all. This manual mishandling of inventory and supplies opens up your operations to data entry errors, shipping mistakes, and just a lack of knowledge of what you do or do not have in stock. Sending someone to Lowe’s four times a day because you ran out of supplies will cost tens of thousands of dollars a year.

Focus on What You Do Best. Your business is probably known for building custom homes or commercial projects or some specialty modular product. When something is outside a company’s core competency it’s time to outsource in order to save time, money, and risk. If trucking has been brought in house recently or you started your own set crews or got into the excavation side of building and a recession looms, outsourcing could give you the flexibility to only pay for those services as needed which may not be often during a recession.

Develop and Implement Strategies to Win the Competition's Customers. When the next recession occurs and trust me, there will always be a ‘next’ housing recession, some of your competitors that aren’t prepared for it will find themselves closing their doors or going bankrupt. Having a strategy ready to go when you see the first signs of dwindling orders and contracts could very easily put your company in an enviable position in our industry. Better to prepare a strategy to acquire your competitors customers and never have to use it than not to have any at all.

Help Your Current Builders or Customers. Begin with transparency. If you are the modular factory, let your builders know what is happening within your company if a recession begins to emerge. Let them know you might be outsourcing some services, cutting back on special order materials, increasing lead times in order to keep the production line full when you acquire your competitors’ builders. Builders need to keep their current customers abreast of every delay before it actually affects the job. Warn them there is a shortage of set crews or trade people. Don’t be part of the surprise, be part of the solution.

Don't Stop Marketing. One of the first things to go during past recessions was the marketing department in many companies. But that wasn’t always a bad thing as some marketing departments were necessarily big to coordinate TV, newspaper, radio, magazines and billboards within your marketing area. Since the last recession, marketing has taken on an entirely new look. Delivering your company’s message to potential new home buyers means using the Internet and more importantly, your buyer’s cell phones. One really good person familiar with social media marketing can keep your name in front of thousands every day for pennies. Don’t stop marketing.

Gary Fleisher (the Modcoach) is a housing veteran, editor/writer of Modular Home Builder blog and industry speaker/consultant.

Tuesday, August 13, 2019

Top 10 Bookkeeping Mistakes that Hurt Small Modular Home Builders

To say I was surprised that almost 80% of all small independent home builders, both site and offsite/modular, build less than 4 homes a year is an understatement. That means that only 20% of all small builders in the US build more than 4.

Who knew!

If your business falls into the 80%, it’s almost a certainty you are making at least one of these bookkeeping mistakes and probably a lot more. This is real money out of your pocket.

Here are the Top 10 Bookkeeping Mistakes:

Not saving receipts of less than $75. While such receipts may not be required by the IRS, they provide backup documentation for the many deductions you may claim. It is very simple to have a folder for such receipts, which can prove valuable at tax time. How many trips to Lowe's do you make a week where the amount is so small, under $40 that you simply pay cash or throw away the receipt. 5 trips a week at $20 each is over $10,000 in unreported expenses. You do the math.

Doing it yourself. No matter how much they hate it, many small modular home builders owners insist upon handling the books themselves. Having a competent bookkeeper coming in to handle the books can be extremely beneficial in that they have the skills to do the job quickly and efficiently and will provide a second pair of eyes to find errors and make suggestions.

Forgetting to track reimbursable expenses. Small business owners often pay for expenses out of pocket or with their own personal credit card then make the mistakes of failing to track these expenses. They then fail to submit the expenses to the company for reimbursement. This goes hand in hand with not saving receipts of less than $75.

Not properly classifying employees. The proliferation of independent subcontractors you need on your jobsite has made it difficult to determine who is on staff and who is not. This results in misfiling when it comes to filing taxes since there are different rules and regulations for employees and non-employees. Don't assume just because a subcontractor is licensed to work for anyone, they may do so much work for you they are technically your employee. Again, you need a competent bookkeeper.

Lack of communication. Having someone handling bookkeeping is only effective if they are filled in and kept up to date on all financial transactions. A frequent mistake is paying someone a bonus and not reporting it or buying supplies and not providing the bookkeeper with the information or receipts. Bookkeepers are not mind readers.

Not reconciling the books with the bank statement each month. One of the fundamental aspects of bookkeeping is reconciling the books and bank statements every month. Nonetheless, there are many small modular home builders that do not do this and others where errors are made by not doing it properly. Again, this is a good reason for hiring an experienced bookkeeper.

No backup. The paperless office does not exist in the real world, where audits do still exist. A paper trail, documentation or verification in the form of backup documents should be available, especially if all files are on the computer system, which could be prone to technical problems.

Not deducting sales tax. A common mistake a modular home builder can make is not deducting the sales tax from the total sales. This results in a higher total sales amount and does not lower the amount of taxes due.

Petty cash nonchalance. A system should be set up whereby a set amount of money is in petty cash and each time money is taken out for any purpose, a petty cash slip is filled out. When the fund is exhausted, the slips will total the original amount and a check can be written to cash to set up the full amount again. Many builders are nonchalant about using the petty cash fund without keeping accurate records. Grabbing $40 from petty cash to buy pizzas for the 'boys' at the job and not putting in the receipt in the petty cash box just cost you additional state and federal taxes.

Mis-categorization or over-categorization. There are fairly standard categories for expenses. However, often expenses are entered into the wrong categories or too many categories are created. Use general bookkeeping guidelines for standard categorization and create as few new categories as possible. Try to follow generally accepted accounting practices.

Gary Fleisher (the Modcoach) is a housing veteran, editor/writer of Modular Home Builder blog and industry speaker/consultant.

Question of the Week - Your Net Profit

In the final analysis, how much NET profit after all taxes and expenses did you make on the last house you built?

  • Less than 1%
  • Between 1-3%
  • More than 3%
  • I really don’t know

Also tell us (Anonymously) if you are satisfied with that percentage

Monday, August 12, 2019

Another New Feature Added to Modular Home Builder blog Today

Today many people in our industry just don't seem to have the time to read everything printed about the modular housing industry when it comes to New Products, Interviews or Instructional articles.

With that in mind we have added a new section to the blog called 

Find this new section by visiting the "INDUSTRY VIDEOS" at the top of the blog.

There are several videos in each category with more being added daily.

If you are one of those people that can watch and/or listen to a video while you do something else, this just might be a great way to keep up with what is happening not only in the modular housing industry but in all phases of construction.

Sunday, August 11, 2019

Inside a Unique California Prefab Housing Company

A lot of press is given to those quirky small modular and prefab housing companies by Curbed, Fast Company, Dwell and other media sources that think the best new ideas come from the West Coast.

Startups like Factory OS, Entekra and even Blu Homes were started there, funded by West Coast investors and in some cases they almost died there.

The West Coast entrepreneurial cauldron keeps spewing out and funding some of the quirkiest housing ideas ever seen.

The other day I saw yet another new prefab company, Cover Custom Backyard Homes, that looked headed for the same birth, growth and bust scenario so many others have done on the West Coast.

Cover's Current Manufacturing Plant
Born in a garage slightly bigger than Larry Page and Sergey Brin, who rented a garage from a friend, Susan Wojcicki, in September of 1998 and then worked day and night for a number of months and developed what would be known forever as Google.

This garage was the birthplace of Google
Cover is a technology company founded in 2014 that designs and builds quality custom homes. That technology is helping them create one of the most unique marketing and sales programs I have ever seen.

They are focusing on building flat pack homes that can be erected in certain areas of California where zoning and local governments allow backyard homes. It’s not as easy to find and market to the homeowners in those areas as one would think.

The company's algorithms, developed over several years, can identify the exact lots that their backyard homes can be located. When someone visits their website looking for one of their homes, Cover asks a few questions and can decide in a short time if the viewer’s lot allows their backyard home, if any other existing structure like a garage or shed will have to be removed and then allow the visitor to create their own backyard rental, in-law suite or simply one of the best offices any backyard could have.

If this company catches fire and becomes a success, it will not become a national or an affordable housing company. No, it should be able to build thousands of their Cover Custom Backyard Homes within the finite space of CA. If others throughout the US want to buy one, well as they old saying goes, “that’s the icing on the cake.”

Watch this video and you’ll understand why I think this is one of the brightest ideas for a boutique housing business in the US.

Gary Fleisher (the Modcoach) is a housing veteran, editor/writer of Modular Home Builder blog and industry speaker/consultant.

Saturday, August 10, 2019

Eight “Why”s of the Modular Construction Industry

If you’ve been reading about the rapid acceptance and growth of modular construction in residential and commercial construction, you’ve probably noticed there is still no true definition of exactly what the term “modular” means.

We read about companies like Katerra, Entekra, Blueprint Robotics, Bensonwood and many other factories like them being called modular when in fact they are just building panelized walls, floors and trusses.

Manufactured home companies like Clayton, Cavco and others building homes under the HUD code are also being called modular as are tiny houses being built from garden sheds bought at 84 Lumber on utility trailers bought from Tractor Supply.

There are also the companies building homes from new and recycled shipping containers who the media calls modular.

Meantime the companies that started the real modular industry in this country have sat back and watched as all these other types of construction are being labeled ‘modular’.

Here are my Eight “WHY”s the modular housing industry needs to answer.

Why aren’t the older established modular home and commercial companies denouncing most of these other types of construction for being called modular by the media?

Why doesn’t every IRC based modular home factory belong to the Modular Home Builder Association? Even though this organization has seen slow but steady growth in membership, they are still a long way from having every factory in the US as a member. Tom Hardiman and his team are some of the best.

Why doesn’t every modular factory belong to the Building Systems Council of the NAHB? One would think the BSC, being a council of the NAHB, that companies would be flocking to their meetings. But alas, that is not the case. Their annual conference sees the same group of people attending even though they offer a lot of great things for their members.

Why don’t the owners, GMs and management from modular home factories swamp the International Builders Show? The BSC has a program of speakers at IBS just for modular, panel, log and concrete housing members that has grown rapidly under Devin Perry’s leadership but what’s sad is while all other BSC types of construction are seeing increasing attendance at this event most of the modular housing industry won’t go.

Why do you see so few modular factory owners and GMs at any housing conferences across the US? There are conferences on affordable housing, commercial prefabrication design and education and even conferences on BIM, VR, AR, Robotics, Cloud and other subjects modular factories should be attending but very few are.

Why don’t many modular factory people attend the International Builders Show where thousands of new products are presented, hundreds of industry experts speak and networking grows stronger?

Why do so few US modular factory owners and management attend the Modular Building Institute’s annual World of Modular? This is one event where networking rules the day yet few in the modular housing attend.

Why don’t the owners and GMs of the almost 200 independent modular factories in the US simply talk with each other? What a fantastic meeting that would be! They could actually decide to help each other in the areas of freight, set crews, codes and regulations and even automation and design.

If you have to ask yourself "WHY" this is important stuff, you just might be the reason for this article.

Gary Fleisher (the Modcoach) is a housing veteran, editor/writer of Modular Home Builder blog and industry speaker/consultant.

Friday, August 9, 2019

Wood-Mode Purchase Completed; New Owner Hopes to Hire up to 500

The Wood-Mode plant in Kreamer, PA that closed abruptly on May 13, leaving 938 people without jobs, will soon be back in the business of producing custom wood cabinets.

New owner Bill French, owner of Professional Building Systems in nearby Middleburg, PA, said Thursday he has completed his purchase of the company’s assets.

He declined to reveal the purchase price but said Great Rock Capital has the money. Great Rock, which was Wood-Mode’s primary lender, got the money because all the company had were debts, he said.

About six weeks ago, French began calling back employees for special needs such as for maintenance and to contact dealers. There currently are 14 working, he said.

He anticipates taking job applications in a couple weeks with a goal, depending on how many orders the company receives, of hiring between 200 and 500 employees, he said. Wood-Mode had many fine crafts people, he said.

It has been a challenging time since he announced in June he had an agreement in principle to buy the Wood-Mode assets but, he said, “I think it’s been worth it,” he said.

Several times it appeared an agreement had been reached but something came up that required starting over, he said.

“I think we’ll have a successful company,” said French, who owns Professional Building Systems in Middleburg, which manufactures modular homes and apartments.

Wood-Mode had hundreds of dealers and of those he’s contacted so far, only two said they would not be back, he said.

Delivery of the finished orders will begin immediately, he said. Product that dealers cannot use because they filled their orders elsewhere will be sold as samples, French said.

“It’s exciting,” said Robert Garrett, CEO of the Central Susquehanna Valley Chamber of Commerce.

What is particularly exciting is his plan to rehire former employees, he said.

There was a sense of urgency to see the sale happen, he said. Snyder County’s unemployment rate nearly doubled to 6.1 percent, the highest in the state, after the plant shut down, Garrett said.

Some of the 938 people who were left without jobs when the plant closed without warning have found other jobs. But a number have indicated on social media they would like to return.

Wood-Mode CEO Robert Gronlund and his son, R. Brooks Gronlund, president and chief operating officer, are not involved in the new ownership.

Included in the assets that French bought is the building in Selinsgrove housing Wood Metal Industries.

From an article on PennLive