Tuesday, November 5, 2013

Are Blu Homes and Pinocchio Related? Updated 11/8/2013

OMG! 

In an article in the Financial Times, Blu Homes co-founder Bill Haney made one of the wildest, most unbelievable statements that any modular, or prefab as they like to call their homes, has ever made.

Bill stated that last year they had $40,000,000 in bookings last year and are on track to do $80,000,000 this year. Even Mastro Geppetto couldn't have imagined Pinocchio spinning this kind of tall tale.

Update 11/8/13:  I just heard from Maura McCarthy, co-founder of Blu Homes. She clarifies what Bill Haney said in the FT article:
To address your specific concern around our bookings.  Bill’s quote is correct – we did about $40M of bookings last year.  That is effectively orders for modules, our general contracting services (most of our clients opt into this as well), design services and full delivery and installation. We are more like a full service “one stop shop” for end buyers, and it sounds like this difference is where the misunderstanding lies.


I'm not sure that there is a single modular residential factory in the entire United States that will do $80M this year and here is a factory that sells homes with a starting price of almost double what any other modular factory homes does making this claim. And Blu Homes is only 4 years old.

Bill Haney makes it sound like his vision of modular housing is new and just about the only real prefab out there when in reality Cardinal Homes was building a folding home decades ago. He also fails to mention an entire modular industry that has been in place and producing hundreds of thousands of homes over the course of 60 years.

If you thought Maura McCarthy, the other co-founder of Blu Homes, stretched things a bit, somebody should check Bill's nose.

The last line of Blu Homes' article is absolutely the most absurd thing I've ever read a reputable news organization write about modular housing:
"Prefab has experienced false dawns before. Hopes are high that this time will be the real deal."
CLICK HERE to read the Financial Times article of November 1, 2013 and decide for yourself if he is the new reigning king of modular or just another wooden puppet come to life.

14 comments:

Anonymous said...

Coach, remind me never to get on your bad side. That was quite an article. I can see why you wen off on Blooper Homes.

Anonymous said...

If each house were $500K they need to sell (and install and finish?) 160 homes next year to hit M$80 gross revenue.

Doable? Maybe.......

Coach said...

You and I both know that they can't do that with a factory that as I recall doesn't use an assembly line approach to production.

I also seem to remember them stating that it takes about 5-7 weeks to build one of their homes in the factory.

And I just heard that they are up to $135 million in investment money!

Ibgreen said...

I believe they are talking retail dollars, not wholesale dollars like most conventional modular factory's. Because they market so well to the limousine lib........ Oops, affluent, they are commanding top prices and are able to include all site work and modules in their sales numbers. I do enjoy reading third party reviews online. Seems they need to learn the phrase "under promise and over deliver".

George Morgan said...

a person requesting a quote does not make a sale...its is merely the first step....the only way that these people will do 80M would be to count each and every quote...and that's a stretch

Frank Billings said...

When are the investors going to realize that pouring money into this pit called Blu Homes is never going to pay off? They really know how to pitch for more money but results at the rate they build homes will take decades.

Anonymous said...

If Maura McCarthy defends that $40 million in "bookings" for last year, she must also agree with the $80 million for this year that Bill Haney said.
That would make them close to being in the Builder Top 100 Builders in the US according to my sources at the NAHB. I just don't believe it.

seeking answers said...

I think that what needs clarity is the definition of a booking, it is definitely not a sale or they would refer to it as sales. It is not billings either so what is it? Could it be when someone saves a 3D configurator design? Or is it when someone signs a no penalty cancellable PO? Is it when a PO and deposit are signed and delivered? A booking really could be anything depending on how Blu Homes defines it, and there is always the chance they decide to change the definition.

An interesting data point would be to see how bookings relate to billings and even more so how they relate to receipts. Many places that quote a bookings number also quote a ratio that allows you to compare it to sales. Over 1 is considered growth and under 1 is contraction. I fear that Blu probably has a number over 2 which likely means many bookings fall out of bed and never materialize into sales.

Coach - since you seem to have a pipeline to Maura and she can certainly ask someone to give her the answer to this could you get some clarity?

Anonymous said...

I think that the difference is between "bookings" (take deposits, write orders, work on plans, etc.) and "building" (where a home is actually built in the factory, delivered to the job site, and finished). One can take a lot of deposits and build little for a year or two with the slow engineering/permitting process in California. I think that the best gauge is what is the total amount paid for clients vs. homes actually built.

Anonymous said...

Coach - I read a piece today that quoted a sales person as saying sales are up 10X since she started three years ago, that the factory can produce 500 homes a year and they had done 100 "projects" by the end of last year and doubled that by July....

I think you need to respect these guys.

Frank Billings said...

Coach, why do you publish comments from Anonymous people that quote an unnamed sales person with a story that is so easy to disprove.

Not only don't we get to know what "bookings" are, now we have to ask what she means by "projects". Is a project a house, a duplex or a 60 box apartment unit? If was any of those big apartment projects you can bet the owners would be bragging to everyone about it and they aren't.

Anonymous said...

@ Frank - Why are you so blue about Blu? Here is a link to the article....
http://news.theregistrysf.com/factory-built-homes-plug-play/

Brent said...

Whatever your opinion of Blu Homes, it's apparent that the company has been able to sell its investors on a unique business model and marketing plan to support it. (Most rational investors expect a return on their investment.) Time will tell if the company is able to successfully execute the model.

Brent C. Werner
Former CFO/Controller in modular industy

Anonymous said...

More Blu news. How did Mr. & Mrs. Blu Homes miss their year end bookings number by 25% with less than 7 weeks to go in the year? What happened to sales doubling every year? If the homes are so sought after and custom finished why do they need a warehouse to store finished homes?

Check out this newsie piece...

http://www.northbaybusinessjournal.com/85486/blu-homes-expands-in-vallejo-as-production-doubles/