Reporter from the Charleston, SC Post & Courier Gets Modular's Appeal

By JIM PARKER

The Charleston, SC Post and Courier

Picture a house being raised by builders on site: framing, drywall, fixtures, electrical work. Then envision all the work going on in a sprawling plant.

That’s a condensed version of the differences between modular homes and stick-built houses.

Modular homes also vary from manufactured houses. But there, it’s primarily in the consumers the two industries are focusing on. Manufactured homes tend to be constructed as single units, usually without second levels, and are designed in many cases as affordable housing for lower to moderate income residents.

Modular houses, by contrast, typically are aimed at a middle to upscale buyer. They include assembly techniques for two-or-more-story houses, hoisting upper stories by crane and clipping them to ground floors, even installing attics.

According to modular backers, the homes can produce cost savings because they’re built under climate-controlled conditions — no holdups for wind and rain.

Hunley Waters

Even so, the industry has been slow to catch on in a big way in the Charleston area and elsewhere. One area neighborhood, North Charleston-based HunleyWaters, is known for its all-modular-home construction. Homes are priced in the low to mid $200,000s. The community works with Nationwide Homes in Martinsville, Va., as its manufacturer, and locally based Old Man Construction completes the work once the sections are on the ground.

Bonneville Homes Featured at Montreal International Design Show

The Montreal International Design Show will, for the first time in its 25 year history, will have a modular home on display.

The Pur-Z model from Bonneville Industries is a red cedar-clad home with clean, contemporary lines and a Zen vibe.

 

The house is one of many attractions for visitors to the design show, which is open to the general public on May 25 and 26.

The two-level house, developed as part of a new high-end Pur series by Bonneville Industries, builder of pre-fabricated homes, and the Montreal architectural firm Blouin Tardif, features a modular structure that, as Bonneville co-president Eric Bonneville explained in an interview, lends itself to factory construction.

The Pur-Z, as this high-end prefabricated modular home is called, is to be unveiled at the design show. The home’s two bedrooms are on the main floor, with the master bedroom opening onto a private terrace; the principal living space, an open area featuring a living room, kitchen and dining area, is upstairs on the second floor.

The house, which has a $450,000 price tag, is one of five homes in the Pur series. The interior can be customized, Bonneville explained; the configuration of the rooms can be changed, for instance, as well as the windows.

Inside the Blu Homes Factory

For the longest time I've marveled at how a company that builds approximately two prefab homes a month can become the spokespeople for an entire industry and then I realized that everyone loves the underdog especially when that dog does a unique trick, like building a folding house. Add wine and cheese "Open Houses", a $60M bankroll for self promotion, backing by one of Walt Disney's nephews and owners that truly believe that everything they say should be chiseled in stone for posterity and you've got Blu Homes.

Here is a video of the Blu Homes factory in Mare Island in California.

43rd Wedding Anniversary

I can't believe that tomorrow is our 43rd Wedding Anniversary! 

In honor of that day (and to keep Peg happy), I am taking a break from writing any articles on Modular Home Builder. We are going to pack up and escape to a special place for the day. Let the dog run along the stream, cook dinner over a firepit and generally cut ourselves off from civilization for a day.

Update: I got poison on both legs on our little adventure......itchy!

It better not rain or this is the last time for this kind of romantic adventure. New articles begin on Friday.

Gary and Peggy Fleisher - May 16, 1970

New Home Trends for 2013 and Beyond

Modular home builders and their factories are quietly adapting to the new home buyer market. Today's consumer is focused on simplicity, efficiency and practicality. Gone are the days of the McMansion, today's homebuyer wants an affordable home with a modest footprint.

Simple architecture is the order of the day as homeowners look to create interior spaces with natural finishes, clean lines and minimal accents and embellishments. 

The exterior structure is favoring basic geometry because it is easier and more affordable to frame, heat, cool and maintain. This is evidence by the number of website’s promoting the Lego style homes prevalent on the West Coast.

The average house size continues to shrink with consumers seeking homes between 2,400 to 2,800 square feet. This trend of course is driven by cost and practicality as homeowners seek homes that meet their needs and budget.

Health-conscious homeowners are starting to see their homes as part of the wellness equation, right in stride with exercise and eating right. Buyers continue to be pay attention to HVAC systems that improve indoor air quality and are energy efficient top the list for economizing, as well as water efficient bath fixtures like faucets, toilets and showerheads. ENERGY STAR® appliances and lighting fixtures have almost become a standard rather than a trend. The trend perhaps is in the design and style of today's efficiency products.

While smaller homes are certainly in demand, there's still a need for flexible homes with plenty of bedrooms and bathrooms because of multigenerational homes and extended families. 

Multigenerational households are popular as kids continue to stay at home, elderly parents need care and young families need grandparents to care for their children while they work. Sure, smaller homes typically cost less than large ones, but they're not nearly as economical as a shared mortgage and a household where everyone pitches in.

The kitchen remains the heart of the home. In fact its flexible and open design is transforming it into the ultimate gathering place. Even as the footprint of new home construction shrinks, the size of the kitchen will not as consumers seek a multi-functional place to interact with family and friends. You'll find a trend in "invisible appliances" were the doors will blend with the cabinetry to create a unified kitchen décor.

Having an organized home, especially as it gets smaller, is essential. Look for easy-to-install closet organization systems and stylish bins and baskets to pop up around the home. Seating that doubles as storage is part of this emerging trend.

The bottom line is that homeowners are craving products that reflect their individuality and make their life easier. 

Sales Managers Have "Fear of Firing" Issues

Why do modular home factory sales managers hang on to bad sales reps? Are you scared of their relationships with key clients? Do you feel guilty that you haven't given them all of the tools, training and attention they needed to be successful? Is the process of hiring new salespeople so painful that you would rather hold on to these people than go look for new ones? All of the above and more?

Never show fear to animals, children or sales people -- they can sense weakness and they will take advantage of it.

Let's address your “Fear of Firing” issues:

You have more power than you think. Remember "Jerry Maguire?" Jerry gets fired and tries to take all of his clients with him -- and almost none go. Why? Sales people have a distorted picture of the power in the relationship they have with customers. Just like Jerry's boss, all you have to do is pound the phones - you'll preserve the accounts, take over the relationships and move on. If you don't have relationships with your company's key builders, fix that. Regardless of how good the sales rep is, you're the Sales Manager and you need to know your company's key account contacts personally.

Forget about fault. You cannot own the issues of success and failure with your sales person. If he is not hitting his production goals, you don't "owe it to him" to give him one more chance. If you weren't good at developing him in the past, you won't be any better in the future. This just isn't the place for him to be successful. Let him go bloom in someone else's garden.

Affection follows performance. Love your producers, loathe the rest. After an appropriate and defined on-boarding period in which you invest heavily in a new sales person, your time and attention should follow the winners. Create a great place with great products and services. Bring on good people, launch them well and then let them run. If they don't hit their marks according to schedule, part ways.

Method Homes Delivers and Sets Modules for Taproot Theatre

In March I wrote about Method Homes being selected to build the addition to Seattle's Taproot Theatre. CLICK HERE to read the article.

In one of the best videos I have seen in quite some time showing a modular building being set, Method Homes completes the set. It really is a great job by a good West Coast modular manufacturer. I'm sorry...that's a West Coast prefab manufacturer.

Building Material Prices Continuing to Climb

Since Jan. 1, on average, builders said, their drywall prices have surged by 30 percent, lumber prices are 15 percent higher, and concrete and flooring costs are up 5 percent.

Other building supplies are going up, too. Prices for siding and windows made from PVC, a petroleum byproduct, have gone up an average of 7 percent this year.

Louisiana-Pacific Corp., the Nashville-based building products company, reported earlier this week that it saw an 82 percent increase in average first-quarter prices for its oriented strand board, or wood-particle board. Those prices are set on futures markets.

Builders and industry officials say three key factors are driving prices higher:

• Greater demand. U.S. housing starts have grown by nearly 50 percent in the 12 months ended in March, pushing new home construction past the one million mark for the first time since 2008. Permits also are at a five-year high.
• Supply limitations. Producers of drywall, concrete and other construction materials shuttered plants and reduced production during the housing slump. Those facilities are only now starting to come back online, at a fraction of their previous capacity.
• Labor issues. The homebuilding industry has lost nearly 40 percent of its workers since the housing boom’s peak in 2006. Subcontractors are again in hiring mode, but many workers who left the industry or the country are unlikely to return.

 All that has added $10,000 to $15,000 ($4-6 per sq ft) to the cost of a typical 2,500-square-foot single-family house.

Modular Home Builders Cautious of Mortgage Landmines

Mortgage lenders are busy these days helping with refinancing and new home purchases as well as construction loans for buyers wanting to build a new home but one group of new home builders is having a hard time enjoying the recent new home revival.

Those men and women that build modular homes for a living are constantly having to battle not only uncooperative code enforcement people, the public's prejudice that comes with building a modular home but they also have to deal with a lot of uninformed lending officers.

"But we don't offer any mortgages for building modular homes."

Recently a group of modular home builders met and expressed their need for a little love from lenders.

Here are just some of the things that drive modular home builders crazy:

I can't live with the draw schedule: Every modular builder has run into this. The bank's draw schedule for a site builder works well for both the bank and the site builder but is impossible to use by a modular home builder. Too often the mod builder is given the site builder's draw schedule and told that this is it, few or no changes. Every mod builder knows that this draw schedule sucks. Since the home comes from the factory complete except for final finishing, the third draw has to be much larger than the bank is usually willing to give them which in turn puts the mod builder in a position to have to explain AGAIN why they need so much money in the middle draw. It gets frustrating.

I want to use my local bank. Whenever a mod builder hears this, the hairs on the back of their neck starts to tingle. The local bank's mortgage officer may have never done a modular home loan before and the thought of having to do one doesn't excite them very much. Too much banking red tape to go through just to process one loan per year for a modular home. Instead, I heard of some small local banks actually telling the home buyer that if they found a local site builder they would have no problem getting a loan.

The buyer has to cosign your draw check. What could go wrong with this scenario? Just about everything and it usually does. The home buyer went on vacation for two weeks before the house is finished leaving the builder with a check they can't deposit in their bank account to pay bills. The home buyer is having a tough time with you because nobody has been to their house for 3 days and he is holding your check hostage until someone shows up even though the check is for completed work. Or my personal favorite, the home buyer wants to hold your last draw check hostage for a couple of weeks after they move in to insure that you come back to fix things.

What is needed is for a couple of large regional banks to prepare a modular home draw schedule that fits the mod builder's needs and teach all the mortgage lenders how to work with home buyers that want to go modular. How many more home buyers do you think would go modular if the banks made it as easy to get a home loan as they do for the site builder?

Monthly Modular Home Builder Meetings a Growing Success

Just after the first of the year a modular home builder contacted me and asked if we could meet and discuss the state of the modular industry today compared to what it was prior to 2008. The fellow I met was a veteran of the modular industry in Maryland and what I thought would be a hour meeting over breakfast turned out to be three hours.

Maybe this is the real reason the builders show up for the monthly breakfast meeting

The questions he asked ranged from how have modular factories changed the way they do business today to financing the buyer and even using social media to find new prospects. It was apparent to me that if he, a 30 year plus veteran of our industry, is looking for answers, there must be others.

I went back to my office and wondered what the reaction would be if I got a few builders together the next month and talked about all things modular. I asked several modular home builders within a four state area if they would like to meet for breakfast once a month and have an open forum about all things modular.

I knew that I had to limit the meetings to 6 builders because any more than that would not have the small group feel I was looking for. I also wanted to use this group discussion to write more articles about our industry. Boy, did I get my eyes opened.

I only have two rules when we meet. No factory bashing and no spitting on the floor. Anything else is fair game.

One of the first meetings had a consultant who was former modular home factory executive learning just what the builders were looking from their looking for from their factories. Eye opening comes to mind.

Another month had Tom Hardiman, executive director for the MBSA attending. Putting the builders and Tom together furthered a better understanding that the residential modular housing builder has been left out in the cold by the industry and Tom explained what the MBSA is doing to help. He also was surprised by the frankness of the discussions.

This past Wednesday's breakfast meeting, two of the lenders from a large regional bank were invited to listen to what modular home builders were looking for when is comes to things like draw schedules, lending practices and a myriad of other topics related to financing. The lenders learned first hand what hurts the modular home builder in particular and told the group that their bank was already working on a modular financing program and with the information they got at the breakfast meeting, they were going back and make it to better.

As one of the builders said this week, "nobody is going to come forward and help the modular home builder, so we have to do it ourselves and meetings like this are the answer."

If you would like to know more about how to organize this type of meeting or would like help getting one started in your area, simply email me....Modcoach

If you are a builder in MD, VA, PA, WV or DC and would like to attend one of these breakfast meetings, simply let me know and we'll get you included.

US Modular Showcases the Finished Patel Home

Last October I wrote about a letter sent to Abe Ferreira of US Modular by one of his clients praising both his company and modular homes. Click here to read that article.

Today I was sent pictures and a video of the finished home. Hats off to Abe for a great marketing program sure to generate more sales for US Modular.

Congratulations to Dr. Kaushal and Elaine Patel, the proud owners of a modular mansion built by USModular, Inc.  This amazing 2,972 sf home features 4 bedrooms, 3 1/2 bathrooms, and a den. The modular home was "set" in October 2012 and we are proud to share with you a real life happy ending for the Patel Family!

Sales Reps Needed by Leading PA Modular Home Factory

We are looking for experienced regional sales representatives in the North East as well as the mid-Atlantic and Southern states.  Applicants for both inside and outside sales positions are welcome. 

Interested applicants may send their resume to Dave Byers, Human Resources at davidb@iconlegacy.com or call us at866.923.7490.

Manufactured Structures & Building Components Manufacturer For Sale

State-of-the-art-facility located near a major US metropolitan area.  This is an excellent opportunity for an existing manufacturer to expand into new product lines or acquire additional market share.  

Contact Mark R. Sage, Managing Director, Wyndham Capital, LLC, 3030 N. Rocky Point Dr., Suite 150, Tampa, Florida 33607.

Email msage@wyncapital.com or call (866) 262-4588 ext. #1 for additional details on this outstanding opportunity.   

Wyndham Capital is a Merger and Acquisition Advisory Firm that previously initiated two transactions in the Manufactured Structures Industry:  1) Deer Valley Homebuilders in Guin, Alabama in 2006 and 2) Handcrafted Homes in Henderson, North Carolina in 2013.     

NY Modular Home Builder Wins Top Prize

Hudson Valley Home Source, LLC located in Goshen, NY was recently awarded the 2012 Pinnacle Award for Best Modular Home in the Hudson Valley, NY for a Custom Modular Home built overlooking the Delaware River in Narrowsburg, NY.

The custom built modular home built for Hudson Valley Home Source by Simplex Homes in Scranton, PA features 3,000 sq/ft of living space, open floor plan, cathedral ceilings, and many “non-traditional” modular features.

“This home is typical of the “non-traditional” modular homes HV Home Source builds and specializes in. The Roof system of this house as well as “module” layout is much different than the typical stereotyped “modular” homes of years ago.” said Bryan Hitt, President and CEO of Hudson Valley Home Source, LLC. “We pride ourselves in the superior capability, quality, and service we provide to our clients and feel that this award will validate the core principals we follow, which is that modular is a construction method, not a type of home.”

With experience, proper planning, and the right team, anything is possible with modular construction. 

Modular Commercial Projects Heating Up the Economy

Champion Commercial Structures, a division of Champion Home Builders, Inc., has begun construction of an 83 room hotel for Jay Peak Resort, a luxury ski resort in Northern Vermont. The project marks the seventh hotel project undertaken by Champion Commercial Structures in the past 12 months.

With simultaneous hotel projects located in Louisiana, North Dakota, Pennsylvania and Vermont, Champion is able to demonstrate the company’s unique geographic reach by leveraging its 30 manufacturing facilities strategically located across North America and the United Kingdom.

“A year ago, we began our push to encourage hotel franchisees and owners to consider modular construction because it offers a measurable advantage over other construction methods. After all, while the cost of modular construction may be similar to traditional building methods, it is always faster, and when it comes to hotel room rates – time is truly money,” said Jack Lawless, Chief Executive Officer, Champion Home Builders.

Just about every modular factory in the US is doing a major project or two this year and some factories are beginning to employ “Project” sales reps that work exclusively in this arena.

The growing acceptance of modular building in the hotel industry is helping many factories keep their production lines busy. So far, the biggest downsides for major project work is financing the project until the developer pays and the factory’s modular home builder base having to wait longer for their homes.

Coastal Modular Group is On Target for Today’s Home Buyer

I visit modular home builder websites on a regular basis and what I usually find are dull, not well prepared bunches of photos, a little info and a “contact us” form.

But today I found one builder that breaks that mold completely. Coastal Modular Group in Wall, NJ has a clean, well designed site that is easy to use.  It is a quick read which is a big help in this instantaneous world we now live. Lots of pictures of completed homes and beautiful floorplans.

But the one thing that caught my attention was this video.

They call it their Online Management system but I call it that one Marketing Tool that will get the visitor to pick up the phone and call for an appointment or fill out the online form.

This may not be the best website I’ve ever seen but it sure is a winner in my book.