I've been building houses in the Toledo, Ohio, area since
1987. For most of that time, my focus was on custom homes in
the $250,000-$300,000 range. But over the past few years, a
worsening shortage of qualified trade contractors was making it
more and more difficult to thrive in that area of the market.
Since I had no crew of my own and subbed out most of the work,
I was faced with drawn-out build schedules and cost
fluctuations that made me uncomfortable.
After six months of researching some possible alternatives by
reading, surfing the web, and touring several modular-home
plants and talking with factory representatives, I decided that
the best way to speed production and reduce uncertainty was to
begin building custom modular homes instead of stick-built
homes.
My research also convinced me to move into the less expensive
first-time-buyer market, which in my area means building houses
that sell for $150,000 to $175,000. Few builders move from more
expensive to less expensive homes -- the usual progression goes
the other way -- but strong local demand for lower-priced
housing made that the best way to take advantage of the speed
and simplicity of modular construction. Although my per-house
income would decline, I'd be able to build more houses in the
course of a year, boosting my overall profits.
Today, with about ten modular projects under my belt, things
have worked out every bit as well as I'd hoped. Going modular
has also freed up my time enough to allow me to spend much of
the past year putting together a local 100-house development.
Once the construction phase starts, I plan to build modular
houses in the development as well, which will give me the
benefit of volume purchasing and allow me to offer buyers a
very attractive price.
Each module arrives on the building site
on a steel carrier towed by a tractor-trailer rig. Pitched roof
sections are folded down for shipment. Windows, doors, and most
exterior trim are already installed, and the front and back
walls are covered with vinyl siding enclosed in a protective
wrap. The gable ends will be sided after the installation is
complete. After the modules are delivered, two or more carriers
can be stacked for the return trip to the factory. The rear
module is craned onto the foundation first, with its roof still
in the folded position. The set crew powder-fastens support
posts to the basement slab and bolts them to the central LVL
girder.
Cost and Quality
Modular construction allows me to take advantage of the
manufacturer's volume discounts on materials, and the
accelerated build schedules help keep the price affordable for
both buyer and me. When all the bills are paid, I've found that
a modular costs about 10% less to build than a comparable
stick-framed home. In addition to offering a variety of plans,
each manufacturer also provides a range of options for
good-quality fixtures, trim, cabinets, and other
features.
Most of the modular companies I work with, for example, use
Merillat cabinets, GE appliances, and windows from major
manufacturers like Andersen and Pella that are better than the
low-cost generic windows found in many stick-built houses in
the same price range. Buying these items through a modular
manufacturer gives me the benefit of volume discounts on
name-brand products, so I don't have to compete with stick
builders on price and quality.
The bottom line is that modern modular houses are as good as
or better than comparable stick-built houses. I often take
potential buyers through a local development of about 70 homes,
about a third of which are modulars. No one has yet been able
to distinguish the modular homes from their stick-built
neighbors.
In addition, the controlled environment of a manufacturing
facility reduces quality-control problems and makes concern
about variables like bad weather and finding good help a
memory. Because the factory is always dry, there's no chance
that rain-soaked framing members will warp or plywood will
swell or delaminate. As a result, I get straighter,
better-looking walls and floors.
Business Advantages
While material prices for stick builders can change from one
day to the next, modular manufacturers only increase their
prices every two to four years. That price stability allows me
to write very tight estimates. When I send a set of drawings to
a manufacturer, I generally have a firm price in hand within a
matter of days. After I enter the costs of site work and
finish, I have an accurate cost figure that isn't subject to
unexpected change.
Less is more. Depending on the manufacturer, the
time of year, and the complexity of the plan, the time between
placing an order and taking delivery of the completed house
runs from as little as two weeks to several months. Besides the
advantages of shorter build schedules and the benefits of
building in a manufacturing facility, this system has other
benefits. I no longer have to deal with a framing, roofing,
insulation, or drywall sub because all that work is done by the
manufacturer. As a result, I no longer have to spend hours
researching materials invoices to make sure they're accurate. I
have fewer phone calls to make, fewer 1099 forms to prepare,
and fewer insurance certificates to collect for the annual
insurance audit.
All this translates into much less time spent on
administration. As an example, the last custom home I built
required me to write 149 checks, while the last modular home I
built required only 33. Because the projects are completed much
faster, I also enjoy reduced insurance costs. My waste-removal
costs are minimal, and the homeowner pays less interest while
waiting for the house to be finished.
