Saturday, October 3, 2020

Is This the Year for Modular Builders to Start Their Own Factory?

This has been a bad year for many segments of the economy with Restaurants being one of the first we think of. It has also been a great year for some industries including off-site construction.

With record low interest rates, prospective new home buyers seem to have many builders doing quote after quote for them. And they aren’t just tire kickers, they’re signing contracts and builders are placing orders with their modular home factories.

If this were 20 years ago, the modular housing industry would be building more factories, searching for new builders to add to their authorized list of builders and production lines would be filled with home after home being built and shipped, set and finished.

But COVID-19 hit the off-site construction industry hard for a few months. Production backed up like a drain waiting for Roto Rooter to show up. Now that the drain has been opened and the production lines are back to almost normal, the modular industry has been hit with rapidly rising prices, shortages of skilled labor, materials and set crews and a proliferation of large commercial projects sharing the same production lines that used to be exclusively used for single family homes.’

Last week I received a call from a modular home builder I’ve known for years on the East Coast asking if I knew of any modular factories for sale. It seems that his houses keep getting bumped back on the schedule because projects have been delayed on the production line for lack of materials.

We talked about what buying and operating his own factory would mean to him and if he had really thought this through as buying or starting a modular factory is not something to be taken lightly.

He named some of the consultants, which I recognized,and he has talked with his finance people and it is making more sense to do it now than ever before. 

He talked of making his modular home business vertically integrated from sales through design and production, from delivery and set through finish.

Bottom Line:

If you own a small to medium size modular home factory that could produce 60-80 single family homes a year and are looking to leave the business, please contact me, Gary Fleisher at modcoach@gmail.com and I will pass your name onto this builder. 

I would strongly suggest an NDA be used which I would be happy to deliver for you to have the builder sign. I am not looking for any fee for helping.

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