Monday, January 30, 2017

Drain Circling Blu Homes Plans “Back to the Future” Move

Just when you thought Maura McCarthy and Bill Haney, the founders of Blu Homes, didn’t have any cards to play in the modular home game, it appears they are going back to ‘Day One’.

They've been manufacturing their premium priced folding homes in their Vallejo factory for five years but is shifting back to outsourced production to make its homes more affordable outside the greater San Francisco Bay Area.

Once serving 22 states, they recently said that they would only sell their homes in northern California. I can’t remember which of the three CEO’s they’ve had in the past year made that announcement but apparently that is out the window in favor of once again marketing their homes to areas outside CA.

Two factories located outside CA that had once built their homes for them are back on the table as possible subcontractors to furnish their homes.

The move from only serving the northern CA market may have been prompted by the high price of a Blu Home, something that even those customers may have found too high. So along with outsourcing their production, they are moving their marketing efforts away from that area and going back to selling in other states.

They are also lowering their prices 15-25%, cutting back on staff to about 15 people and will use one of their model homes for offices.

At one time Blu Homes got more press exposure than the rest of the modular home industry combined. They proclaimed they were the face of the future for our industry. That was a bold claim for a company that has built approximately 250 homes over 8 years. I can’t believe any modular home manufacturer with over 100 production and marketing staff could survive on 30 homes a year. There are modular factories in the US with fewer workers that can turn out 250 custom homes a year.

With well over $100,000,000 in investor money, well over a 100 people working on all phases of production, a PR program that any modular factory would love to have and a series of Whine and Cheese Open Houses prove once again that when outsiders with no history in our industry try to teach the rest of us how to manufacture modular homes that failure just might be around the corner.

Welcome back to the future Blu Homes. Outsourcing your production, establishing a marketing program only for northern CA and lower pricing.

What’s next….Beer and Pizza Open Houses in local VFW’s?


PA Factory Owner said...

Coach, you have never been a big fan of Blu Homes as evidenced by your myriad of articles. I must say however that you presented us with a complete picture of how two people that bought a design from Michelle Kaufmann and began a company that went from small and obscure to rising high enough to attract millions of dollars from investors to what is happening today. These articles could be used to teach a course on what not to do in modular housing.

You also did a series of articles about the people that took over Excel Homes. People that knew little or nothing about modular homes, acquiring factory after factory while expanding all over the US only to find themselves in bankruptcy court and selling everything to CHampion.

As a long time reader and financial supporter of your blog I am continually amazed by your insight into what makes a builder and a factory a success. I have actually implemented a couple of your ideas about marketing and sales and they have proven to be very good for us.

When I finally met you at the MHBA meeting in Hershey last year I was a little surprised you were never in management at a modular home factory. Maybe that is why you can see things from the outside better than a lot of factory owners and managers.

Now I'm excited to see what factory you will begin following from start to demise.

Coach said...

I was going to follow Foremost Homes but they seem to have come and gone quickly under the new owner. I have my eye on another one but none will ever compare with what happened at Excel and what is currently happening at Blu Homes.

Steve L said...

Some learn the hard way that without land modular is not affordable. New developments and not one off land/Home construction is key to modular factory future and success. Lender's, Big Banks, FHA, Fannie and Freddie need loan program specifics to the underwriting guidelines for modular factories to succeed.
Local builders will come to modular factory in the future with tailored loan programs, proven low cost operating houses, quick build schedules then factory build construction will be accepted form of house building for the masses.