Yesterday I had lunch with several of the modular housing
industry’s most knowledgeable people. No, not Michele Kaufmann.
We discussed a lot of things about the current state of
modular housing and what the future might bring and a subject of great
importance to these men….older home builders.
Being an older former builder, I ask myself all the time
where the new builders are. I’ve looked in newspapers for their ads, on social
media sites, press releases about a new builder starting up business but I’m
discouraged at what I see. Younger men and women aren’t turning to new home
construction as a way of making a living.
With home builders aging, many turn to their sons and
daughters to keep the family business alive find they have absolutely no interest
in following in “the old man’s footsteps.” And who could blame them. Today a
General Contractor has be to versed in not only how to build a new home but
also with things like water management and runoff, energy efficiency,
hurricane, earthquake and tornado regulations, IRC Codes, new Energy
regulations and on and on and on.
If a builder was around prior to 2008 and still around
today, they have officially earned the honor of being an “Older Builder” even
though they may only be in their mid thirties. They are survivors that will continue to build
nice homes but without new people entering the field, the day of the small
single family builder will become the domain of the small groups like the Amish
who value handing down their business from generation to generation.
Let’s see what is happening out there in new home construction.
We are seeing expansion of the top 200 tract home builders, the ones that move
into an area, buy up 40 acres and more, level it, put in the infrastructure and
build conservative middle class homes for less than any small stick builder
could by using the least expensive materials and bidding out work to the lowest
bidder. They’re in and out, sometimes in
less than 2 years and leave behind modern day Levittowns. Sidewalks that nobody
uses and playgrounds with plastic slides that kids rarely play on. They don’t
let anybody else build in their developments.
That leaves what are called scattered lot builders. These
men and women are the bread and butter of the residential modular home factory
and this is the group that is not producing new builders. I mentioned to my
lunch mates that there are a lot of people franchising these days. For example,
a Red Robin franchise cost $1,000,000 to get started and will cost up to
$3,000,000 just to open the doors. The franchisor will put in about 100 hours a
week and maybe earn $100,000 a year after taxes. That’s a lot of hard work and
investment for little return.
For a lot less investment in time and money, people looking
for a new career could do a lot worse than becoming a modular home builder. Then
I started to ask myself what a person would need to get started in the modular
home business and how much could they make a year. Well, it turns out there are
college degrees for construction management but I have yet to hear of any
degree for modular home building. So let’s change that.
The factory owners across the
training seminars and each recruit people as “new to modular” builders. The factories could charge a fee for the
courses that would explain the codes, regulations and the building techniques
of modular home construction. It would
be a great way to restock the lake.
Once a ‘factory sponsored’ builder has earned his
certificate from this schooling, they become an authorized builder for that
factory. They would then be obligated to build a model home, either with or
without the factory’s financial assistance and feature the factory’s homes for
at least 10 years. The factory would have a continuing education program that helps
them with sales and marketing techniques. With full factory support, these
builders would be so far ahead of home builders that not only would there be a
lot more modular home builders filling the ranks, it would drive site builders
to take another look at becoming modular home builders.
But alas, it will probably never happen as the factory
owners never seem to be able to sit together and come up with a marketing plan
for their industry let alone this kind of program. Too bad though, as it could actually
work. Ford,
and the other car companies do it every day.
