Before we get started let’s discuss the difference between pre-fab housing and modular housing. Plenty has been written about pre-fab homes and just about all the books and articles seem to point to a particular type of home… the modernistic, flat roof and boxy looking home most prevalent on the West Coast.
Modular housing tends to be the homes with more traditional floorplans; ranches, capes and two story homes. Even though they are found in every state, the vast majority of modular home factories are east of the Mississippi River.
With that said, here is where the fate of “pre-fab” rests with Blu Homes. Recently they were given a $60,000,000 investment from a European investment group for Blu Homes’ marketing and sales efforts. Looking at the potential profits that could be generated by Blu Homes leaves one wondering just how many decades it will take for the investors to see any return on their money. You do have to admit that they have been very aggressive when it comes to marketing themselves. I have even given them good press.
If they were to go out of business in the next few years, and I sincerely hope not, what will happen to any other investors looking to make money with pre-fab homes. If the self proclaimed “inventor of pre-fab housing” in the US, Michelle Kaufman, couldn’t keep her little factory running, why would anyone think that her designs, which Blu Homes acquired, could sustain an entire industry?
If they lose their $60M investment, why would any other investor even look at modular or pre-fab?
If Blu Homes is even a little successful, it won’t be long before the more traditional modular factories begin building pre-fab style homes and at a much lower price to the consumer. If that $60M was earmarked for the sales and marketing efforts of Blu Homes as was reported by the company, wouldn’t it have been a better investment to look into working to establish a marketing program for the entire modular and pre-fab industry instead of just one factory that even in it’s best year might have a gross profit of a million dollars?
It’s just one of those things that makes you go HUH?
