Starting A Modular Company..

domanicapital

Does anyone know what it takes to start a modular home company? I've always been intrigued by the effiency of these operations, how they can crank out an 1800 sq ft cape code in a few weeks and sell it for $50k delivered but not set up (with unfinished 2nd floor). So I've thought about starting a modular operation. Do any of you have experience in this area.
I'm assuming you
1) lease some big warehouse space (i wonder how many sq ft to start)
2) buy some fancy equipment (is the equipment any different than what you use for stick built homes?)
3) lay out the factory efficiently (assembly line style)
4) hire crews (can I just have licensed subcontractors show up when its time for the electrical, etc, do their thing to a few homes, bill me for it?)
5) find an architect and engineer who know modular (this seems kind of tricky.. how to design a home and split it into truckable chunks.. I wonder how the plans these factories are using actually look)
6) build a couple homes and have a trucking company come pick it up and have a craning company slap it on the foundation
7) find a contractor who knows how to stitch the parts together...

Cole

I have gone over this idea many times.

I am interested in this as well.

I think you are in the right direction.

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Brickie

Obviously you will need the capital to start.

Second, I'm in the Chicagoland & NW Indiana area. They may do things totally different in other parts of the country.

I've seen the operations of several Modular Companies in Northern Indiana. One of the things that they have in common is they have a lot of land for their facilities. I didn't see any fancy equipment, just the basic stuff that you use for stick built homes. All they do is build & sell mods. It's up to the buyer to provide the land, hire contractors (like me) to do the rest of the work.

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Grumpy

While I have no real experience in this, it's the same principal as trusses. It's built off site and then shipped to the site and assembeled. I would think that there are some modular manufacturers out there dyeing to get their hands on some builders to specify their products. I would also think they have catalogs for you to show your customers and allow them to pick and choose their house style then you fill in the finishes.

It really seems like modular is more and more the way to go, especially for middle to lower income housing. I don't see it working for anything custom.

Brickie

Not only do some of them have catalogs for show, they also have several models on site for show. In addition, they also have prints that they give to their cutomers in order for them to solicit bids from contractors.

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stacker

there is a company near my hometown that builds stick built homes on their site,and moves them to your site on I beams.these are up to 2000 sf homes,and when they are finished out,you cant tell they werent built on site.contact bohes const in helena oklahoma.im sure doug could give you some insite,if your not too close to here.

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jmic

Grump,
Say you don't see it working for custom? Go to my profile and look through our web site. We're doing most of these in lower Fairfield county, the mod. turnkeys start in the 800K range and just go up from there.

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Joe

Grumpy

Interesting. I stand corrected. I still don't see how this could work for a truly custom home since I envision modular homes like lego blocks, all of the same size and shape, slapped together; but maybe you know something I don't know.

mdshunk

Nope. One modular bulder in my area even permits you to bring your own plans to them. They figure out how to make it in chunks that they can haul down the road and reassemble at your site. I've installed services on a great many of them, and you'd never know they were built in a factory unless someone told you. The modular components are all various sizes. No standardized lego block sized pieces, no "really wide door jambs", such as is the giveaway for doublewides, etc.

Mike Finley

Is there a difference between modular and factory built homes?

I always thought of it divided up into 3 categories: HUD code manufacturered homes, IBC (UBC) Modular homes and panalized or factory built homes, which could be of any design at all, just that the walls are prebuilt off site and assembled on site.

maj

Yeah I think everyone is talking about different things here.

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john haddad

Opening a factory is much more than a big building. It you were to break down the departments of a modular plant, it would give you an idea of what needs to be done.

Modular factories are split into two major areas . The front of the house where the house is built on paper and the back of the house where the hosue is manufactured for delivery.

The front of the house is tougher than the back when it comes to starting a factory. The front of the house includes a number of departments. The front of the house includes: sales, engineering, order processing, costing, ordering, tranportation, information technolory, marketing and administration.

The back of the house includes: production, receiving, ship loose, maintainance, and usually a frame department of sorts, etc.

One could write a book on each of the departments, however since they all work together as a system, it would be very difficult.

The easiest way to own a factory without the headaches is to sell a ton of homes and have the factory act as your supplier.

If you are strong at marketing homes to the retail sector, building a factory to run will not be your forte.

Secondly, there is a ton of competition in the modular industry on the east coast / mid-atlantic region at the present time.

Where would you build your plant?

The thought of building only the low to medium home is up to you. For an idea of what is available for design, take a look at: http://modularhomeplace.com/index_files/page0002.htm

You will find modest ranch homes, mcmansions, custom designs, modernist, capes and the standard american colonial home.

Oh, yeah.....to start a factory will take around 3 million dollars and two years of operating capital, patience, leadership, and a motivated and talented staff.

domanicapital

Thanks for the input. I'm in the west, so competition isn't as fierce. How do you figure that $3 million is needed to start. I would think you could start with 1/4 of that or less. Lease a warehouse with enough space and loading docks, hire a crew, sub out the specialized stuff (drafting, engineering). Hire a decent sized crew but bring in subs for certian parts of the assembly line (electrical, etc). The demand is large enough to keep a factory busy pretty quickly, but if needed one could use capital to start with some spec homes. Is licensing any different or would a general contractor's license be good enough if you bring in subs as mentioned above?

john haddad

Why rent a building when you are subbing everything out?

Build it on site and save the rent for your pocket.