YOU'VE GOT ANOTHER IDEA, NOW WHAT?

If you are in the construction business and don't have a million ideas and plans running around inside your head....then your not meant to be in this business. How do you know which ones to act on and which ones are best left running around in your mind?  With the economy in the crapper, sometimes all we have are ideas.

If you've ever had more ideas than time or energy will allow, here are some simple steps to help you decide which ideas are the ones that will help put money in the bank.

1.  Keep a notebook with you.  From Monday through Friday write down every idea that pops into your head.  Then either Friday afternoon or early Monday, pull out the list and see if any of them still make sense. 

2.  If some of them still do, write them on another page and put down how much money you think they will add to your business in one column.  Then in another column, write down how much it will cost to implement.  Now we're getting somewhere.

3.  By now you might have an idea that could make money and not cost you an arm and a leg to get started.  Then you have to ask yourself if the idea is something that will benefit your business in the long term.

4.  If you started with 20 ideas and 3 make sense and only 1 of those is worth pursuing, you now have an idea that just might make it to fruition.  BUT not yet!

5.  If you are a sole proprietor, who are you going to bounce this idea off of to see if it is good idea or just something you rationalized to make it a good idea?  Here is where you need a good friend or colleague.  Make sure they are brutally honest. Corporations have their own set of problems.

Depending how high up the corporate ladder you are, your ideas will either be killed quickly or acted upon as gospel.  Either way, your ideas still have to be written down in the notebook and looked at in the same way any entrepreneur would look at them.....naked in the cold light of reality!

6.  If the idea is a good one, it has potential to make money and your friend likes it, you need to put your idea into an action plan.  Here is where some hidden obstacles arise that make you go ...."Damn, I forgot about that!".  Once you get an action plan completed, you now have to implement it.  Good Luck!

7.  Make sure you keep a log of what you've done to this point.  It's hard to find your way back without the breadcrumbs. 

Here is the fun part.  That was week one, you only have 51 more weeks to go this year.  How many more ideas are coming your way?  Isn't this fun!

NOW IS THE BEST TIME TO BECOME A MODULAR BUILDER

With all the gloom and doom you hear from Wall Street and the rising costs of gas and food, you would think that now is NOT the time to start about thinking about getting into the new home construction business.

For most people that certainly is true, but for the entrepreneur, this could be the best time. 

If you are in or around the construction business as a remodeler, designer, stick built contractor or Realtor, you know that it's tough to make a living right now.  But what about tomorrow?  What do see for the future of construction in the United States?

If you believe that the downward cycle is hitting the bottom and should start climbing back up in the next 6 - 18 months, then there really is no better time to get started on preparing for your future.

When it comes to modular single family homes, I've found that there three main types of builder/dealers.  First is the "Street Dealer" that sets up shop along a highway, stocks the lot with manufactured homes and adds a couple of "Modular" homes to the mix.  These homes are usually sold and marketed by companies that manufacture double wide mobile homes and don't want to lose market share to the competing modular home builder.  So they sell modulars under different names.  Champion Homes and Clayton Homes are good examples of this.

The second type is the "Builder" that is or was a stick builder and has a good working knowledge of construction.  He or she buy their homes from dedicated modular home factories and are able to add porches, garages, decks and just about anything else the customer wants.  They use the modular company to supply the "core house" and then add everything else themselves. 

The last type is the builder/dealer.  This is where I see the biggest increase in home sales.  They don't have a set crew, laborers, a warehouse full of tools and building materials.  What they usually have is a good #2 person that can double as the foreman, salesman, permit getter and everything in between.  With the owner, they subcontract everything needed to complete a CUSTOM home.  They know who to call to get things done!

Why is now the best time to get into this business?  Because it takes from 6-12 months to prepare a business plan, visit factories, develop a marketing strategy and get your advertising ready.  If you were to start right this minute, you will be ready to order your first home just about the time that the economy should start it's recovery. 

Skeptical?  You have a right to be, but remember, this is a cyclical business and if you want to ride the next wave of house sales, start planning today.

POTENTIAL PROBLEM FOR MODULAR HOME INDUSTRY

IMPORTANT NOTICE

I've been following a story that I reported earlier this week about a house fire in MA.  It seems that a fire  started on the front porch of a modular home, spread to the porch roof where it entered the home.  There it ignited adhesive foam that bonds the drywall to the ceiling joists and then spread through the cavity between the first and second floors.

Our industry could get some bad PR over this and in that light, here are some screenshots of the website article.

Here is a link to the whole article -   Keep the heat on fire inquiry

ANOTHER DAMAGING REPORT ABOUT SADDLEBROOK AND MODULAR HOMES

I've been following the Sawtooth Homes and Saddlebrook Development court battle since the beginning and thought that it had been put to rest.  I was wrong, but not for the reason you're thinking.

My battle is just beginning!!!!!

KTRV, a Fox TV affiliate in Boise, Idaho is just the latest to join my list of people that are IGNORANT about modular housing.  By now anyone reading this blog understands that modular and manufactured are two different things.  Modular is IDENTICAL to conventional stick built housing only better.  They are built to the same tough building codes as "regular" housing.  Manufactured housing is built to HUD code which is more lenient but still tough.  Manufactured homes are what everyone calls trailers, singlewides and doublewides and are typically found in mobile home parks.

As long as ignorant reporters and editors keep using these terms without regard to the facts, the general public will continue to confuse these two types of homes.

Here is the article on KTRV's website site and you'll clearly see why I get angry with stories like this one. 

Yes, you can read the article and think that the developer chose lower priced models of modular homes instead of higher priced modulars that are similar to stick built homes in the development but I don't think Dan Hamilton gave that a thought!  If the developer/builder was building smaller and less expensive stick built homes, nobody would even care. He's seems to be another reporter looking at the bottom of his shoe to see if anything is stuck to it!

Then in another part of the story he reports that the reason the developer went modular was the $150,000 price tag for the homes compared to the much higher priced homes in the original part of the development.  Again that is wrong.  Modular housing can and does bring the same prices as stick built housing.  In this particular development, 110 lots in a newer section had been standing empty for years and the only way to sell homes there was to offer smaller homes with less square footage than the original homes thus selling for less.  If people can't afford to buy overpriced homes why not build a smaller home at a more affordable price? 

I completely understand the emotions of the Saddlebrook Home Owners Association.  They should have been approached by the builder about the new homes but with erroneous information out there about modular housing, no wonder the builder didn't meet with them. 

LOTSA LUCK FINDING GOOD SET CREWS

The housing crunch is hitting another side of the modular housing business very hard, the modular set crew.  If your factory has a "factory" set crew, make sure you don't make them angry when they're setting one of your homes.  They might not come back.

If you don't have access to a factory set crew, you are at the mercy of the few remaining "good" set crews left.  They are disbanding like cockroaches in daylight. 

Red Barnette, owner of Modular Home Set, a Rock Hill, SC business that contracts with modular home dealers to assemble houses, lost half of his staff when his work load dropped from one house every week to less than one a month. Four of his employees quit because there wasn't enough work. A fifth was laid off.

"I did have a good crew. But I understand they've got families and mouths to feed. They had to move on," he said. "Right now, we're just trying to make it through the hard times. That's all you can do.

"This whole thing is so far above us. We don't have anything to do with it," Barnette said from the roof of a garage he was building. "If people can't get credit, we can't build houses."

I watched a crew set a house the other week in Virginia and from what I saw it looked like the men were "day laborers" sitting on a street corner earlier in the day.  Only the head guy on the job and one other man had any experience in setting houses.  The others couldn't speak English which made it hard for the foreman or the Dealer to get them coordinated in their tasks.  But before you say that they are taking our jobs, the head guy said he couldn't find anybody else that would take just one day's work.

They didn't do a bad job.  It's set.  But I didn't see them use a "come along", insulate between the sections, properly fasten the house to the foundation or clean up the site after the set.  I talked to the Dealer and he was just happy to find a crew to put up the house.  He and his partner were going to spend the next day making sure it was weather tight.  Thank goodness it didn't rain overnight.

If your sales are down 75%, so are the Set Crew's business and a lot of them have turned to remodeling, so they can't just drop everything and work for you for a day or two.  This will correct itself when the economy turns around in a year or two.  Until then, GOOD LUCK!

CAN SELF HELP BOOKS MAKE MORE SALES?

I tend to smile every time I see an ad for a self help book promoting “How to sell …....whatever”. I’ve read Tom Hopkins, Zig Ziglar and if you’re in the manufactured or modular home business, you've read Jerry Rouleau's books.   After these, all the others seem to be rehashing the same theme.

I’ve sat in on sales meetings for some of my customers when I was actively a Sales Rep for modular manufacturers and I almost laughed myself under the table when the Sales Manager or Owner would have read one of the newest self help books and bought one for each of their salespeople. Usually the books were about 150 pages of boring crap.

Here’s what I usually heard the owner say.  “I just read this great book and I think it will bring us more sales if we just follow what he (or she) is saying. I have one for each of you. Read it and let’s get started on making more money!”

That is usually the last time it is mentioned. PERIOD!  Salespeople look through the Chapters and maybe read about 5 pages and then keep it out of sight in the bottom drawer. Managers are reluctant to question anyone about the book because they haven’t read it either. Just the act of buying it for others seems to imply that sales will go up. Like we’ve all seen that happen!

The reason I’m bringing this up is to let you know that sales don’t happen JUST because you read a book. If that happened, why would Jerry Rouleau and Tom Hopkins continue to attract such large audiences when they speak?  People need refreshed on how to close the sale.

But there’s more to closing the sale than just this one step. There are really three things that have to be addressed before someone signs on the dotted line. They are Marketing, Advertising and Sales. Some of the fresh batches of  "sales self help books" blur the lines between them and nothing could be further from the truth.

It doesn’t matter if you are a one person show or a builder/dealer with sales managers and a sales staff, these three principles apply to everyone.

Marketing is an ongoing process of planning and executing the marketing mix for products, services or ideas to create exchange between individuals and organizations.

Advertising is a form of communication that typically attempts to persuade potential customers to purchase or to consume more of a particular brand of product or service

Sales are the activities involved in selling products or services in return for money or other compensation. It is an act of completion of a commercial activity.

Can the same person do all three?   YES!   

Even if you’re a larger company, typically these are handled be the same person and that’s usually the Sales Manager. If sales don’t improve, management blames the Sales Manager, if the advertising isn’t generating leads, guess who gets the blame?

The problem is not that the Sales Manager can’t do the job; it’s that they are looking at  Marketing, Advertising and Sales as one entity. Part of a Business Plan is to identify each of these areas, prepare a strategic plan for each and then interconnect them to produce a closed sale.

If sales are slow, you could blame it on the economy and you’d probably be right….almost. Part of the blame goes to builders, dealers and manufacturers that are looking to get sales without any real thought to marketing and advertising.

An example of unique thinking is from Excel Homes when they announced their $100,000 giveaway.   I’m surprised no else has followed their lead. Is it working for them?   I don’t know, but I’m sure they got a lot of builders eager to get more information.   That involved both Marketing and Advertising.   Someone at the factory didn’t just get up one morning and say “I’m going to spend $100,000 of Excel’s money today”.   No, there were discussions about the marketing aspect of this offer and then they worked out the details of how to advertise the offer.   It’s up to the Sale Manager for Excel to make sure that he has a plan to convert inquiring builders into Excel Builders.   Marketing, Advertising and Sales working toward a common goal….more builders!

I do find it interesting that no mention of it can be found on their website.  Maybe it wasn't working after all!

There are some really good books out there, but the best for our industry is Jerry Rouleau's "Selling New Homes".

If you are looking for a one-on-one approach that can help you get focused quickly in creating a three prong approach to closing a sale, email me today at modularcoach@yahoo.com.

MAKING A GREAT "FIRST IMPRESSION"

This article is for the modular home builder that has an office or model home separate from their home address. I have been in about a 1,000 offices and model homes during my tenure in this business and I could always tell which builder would still be in business the next year.

What sets the successful builder from the “also ran” builders is attention to details. You only have a couple of seconds to make your business appealing to your prospect. Here is my list of FIRST IMPRESSIONS that will help keep your prospect looking to you to build their new home.

CLEAN THE PARKING LOT. When your prospects drive into your parking lot, what should they expect to see?  Broken bottles, subcontractor’s trucks parked at the front door and weeds growing through the asphalt.  No, they expect your parking lot to be clean with the parking spaces at the front door open and waiting for them to park their car.

PERFECT LANDSCAPE. Even if you only have one flower in one container at the front of your model or office, make sure it’s the absolutely prettiest one in the county! Look at the shrubs, lawn and flowers in front of your office. Are there cigarette butts in the containers (Employees should NOT smoke at the front door) and are the shrubs and lawn perfect? If you are going to be building someone’s new home, don’t you think they want to see a nice front facade on your office?

 

Clean your front door. This is an easy one. I’ve been in hundreds of offices where the front door has remnants of scotch tape where the “Be back in 15 minutes” sign was taped to it. The doors had brass knobs and coach lights that were tarnished and sometimes broken. A nice clean door works wonders. If you have a model home, replace the 6 panel steel door with a full glass one lite one. Nothing says uncomfortable like a big blank door!

GREAT RECEPTION. Assuming you know the people are coming for an appointment, either meet them at the door or if you have a receptionist, make sure they are greeted with a smile. Again, I’ve walked into many offices where I’ve had an appointment and the receptionist was on her cell phone talking with a friend about what where they were going after work. I waited in one office for a full two minutes for the receptionist to get off her cell. I turned to leave and she yelled for me to just have a seat for a couple of minutes. Classic!

GIVE THEM A PLEASANT WAITING ROOM. If you have a waiting room or even just a small alcove, don’t stock it with women’s magazines, health books and hunting magazines. They’re there to talk about a new house, not get a root canal! Have something that compliments your homes like your brochure or handouts. Better yet, get one of the digital picture frames and have it display your homes. I guarantee that if you do, they will spend most of their time watching it.

KEEP YOUR OFFICE NEAT. I have seen some very nice offices and sales offices throughout my travels and I’ve seen some real outhouses! Take a look at your desk. Can you see the top of it? If you can’t, clean it off before your appointment. Dust the furniture. And here’s a real nice touch….put a manila folder on your desk with their name printed on the front. Put the literature and other things you want them to have inside. That’s impressive.

KEEP YOUR SHOWROOM FRESH. Make sure your showroom is clean and neat. Put up samples of as many of your options as you can beg, borrow or steal from your suppliers and vendors. Put some fresh flowers on a table in the middle of the room. Best $4 you’ll spend. Also make sure the lighting compliments the samples. You’re a builder for crying out loud, build a great showroom!

GOOD LITERATURE. Almost all modular companies have good literature. How you use it however is appalling. Most of you just hand it over like you don’t even know what’s in it. AvisAmerica, Ritz Craft and Signature Homes have some of the best literature on the market, but they mean nothing if you don’t sit down and go through it with the prospects. Show them the different series of homes and how they differ from each other. Explain how the factory will build their home. Don’t blow a good thing!

GIVE THEM A “SEE YOU LATER” PACKET. Prepare a package of information about your company. Include your brochure, pictures of your completed homes, recommendations from well recognized vendors and suppliers, letters from customers telling how great you are to work with and anything else you can think of. Give them a time when their quote will be finished and make the next appointment before they leave and mark in both your folder and on their “See You Later” packet.

LOW UNEMPLOYMENT CAUSE FOR FACTORY CLOSING IN TEXAS

Big Spring Manufactured Homes, more commonly known as Solitaire Homes, is closing it's Big Spring, TX plant in August, laying off over 100 people.

The company is not closing because it doesn't have the business, it's closing because of very low unemployment!  Big Spring's unemployment rate is just under 4%.  That is considered full employment said town officials.

Finding and keeping skilled workers has been increasingly hard since the factory reopened in 2002 after a fire that completely destroyed the factory.  At that time there were about 160 people employed.

It never reached that employee number after it reopened even though production was available.  A lot of the skilled labor went to work for the wind farm industry and depleted the pool of workers available to Solitaire Homes.

"There is a problem with workers not showing up", said Nick Anderson, a plant manager.

Reports say the company is getting ready to open a factory in Mexico, but they say that has nothing to do with the Big Spring, TX having problems.

UPGRADES VS OPTIONS

Yes, there is a difference and a large one at that.  I've seen many builders that were unsure of themselves and their selling abilities try to sell on price alone.  That only gets you the customers that are shopping for the lowest price.  And we've all had our fill of those!

The real situation lies with the modular industry.  After repping for some of the biggest manufacturers in the industry and working with over 200 builders, there are some things I need to share with you about standard features.

Some factories use 2x4s for their exterior walls to hold down their costs.  While 2x4 walls are OK for some areas, they may not be right for you.  Therefore you have to upgrade to 2x6 walls.  Then some factories actually make you pay to upgrade the insulation from R-11 to R-19 even though the 2x6 walls need it.

The same thing with vinyl siding and windows; lowest priced products!  If you live in an area that needs DP50 windows and your factory doesn't offer them as standard, you have to upgrade!  Do you really think that they are giving you even the middle grade of vinyl siding?

And don't get me started on carpet and vinyl.  Here most companies don't even offer upgrades, it's just "take it or delete it".

So what are you to do?  First, make a list of YOUR STANDARDS and then have the factory rep include these items in every house he quotes for you.  I used to call these "standards over standard".  Double check it!  They are human and sometimes they will forget to add them.  Some modular companies have programs where they want you to give them your standards and then their software program converts all your homes and quotes to these new standards.  Your customer should not under any circumstance have to have you add an upgrade to the house to make it pass local building codes. 

Now to options.   These can be everything from simple recessed lighting and hardwood floors to curved walls and special kitchen cabinets and bath fixtures.  These should NOT be part of your basic home quote!  These items are called OPTIONS and they need to be listed separately on the quote.

Typically, options tend to add between a 5 -30%  to the price of the basic home.  Your job when selling this home is to explain to them that after they get the price of the home (without options), they should consider options that fit their budget and lifestyle.  They get to choose what they want without having to feel embarrassed that they've gone over their budget.  If you've ever had change orders during the construction of a home, you know that they will change everything and then want to try to beat you up later when it comes time to pay for them.

Get the options up front and have the factory build them into the module and the price.  Sweet!

Consider packaging options much like the car companies do.  These could include "appliance, home theatre, security and deck packages that could save your customers money and also make you more profit.

STUFF ON THE BOTTOM OF YOUR SHOE

Just about every day I hear someone using the terms "modular home", "trailer" and "double wide" as if they were interchangeable.

Today as I was reading the news from around the country, I came across an article that made me rip snorting angry!  The article that caught my attention was from The Chattanoogan, a newspaper in in Chattanooga, TN.

The headline read "Modular Home Burns On Hickory Valley Road" and the story is about a vacant home that burned at 2834 Hickory Valley Road in Chattanooga.

Why am I so angry about this?  When I read it, I thought, here we go again confusing a modular and a manufactured HUD home.  I could forgive that, almost.  That happens all the time.  Then I "mapquested" it and could not find a single or double wide home anywhere near the address.  I have absolutely nothing against HUD homes, in fact I used to be a sales rep for a HUD code factory.  It's just that when they do burn, it seems that it's the reporter's duty to write that they were this type of home.

What I did find where non-HUD houses in what looked like a nice neighborhood.  Here is where I came off the top rope.  Why did they have to write that it was a "modular" home as if maybe that it was less than an ordinary home.  Why mention it at all?  If it had been a "traditional stick built home" would it have been mentioned....NO!

I could almost see the reporter who wrote the article looking at the bottom of his or her shoe to check if anything was sticking to it.  Here is the mapquest view of the address and a link to the article.  If I'm overreacting to this, let me know. 

Click here for the article.

HOMEWAY HOMES READY TO INVEST A MILLION DOLLARS IN MODEL CENTER

Homeway Homes, a modular homes manufacturer based in Deer Creek, IL east of Peoria is preparing to open a new Model Center in Galesburg, IL but by September. 

They build modular homes for the Midwest market and have decided that now is the right time to expand the number of factory home centers.  Aaron Collins, sales manager for the Galesburg Division, said the design center will be built so the company can grow here.  Another sales center will be added in Springfield later.   The site will have an office/design center and two homes.  Collins expects to employ about 15 people as the business grows.

Originally Homeway contracted with another factory to build their homes but in 2005 they built the 60,000 sq ft Deer Park plant.  This is another example of a builder believing in the modular so much that they built their own factory.

YOU'LL BE WAITING FOR YOUR NEW 2009 F150

Ford Motor Company announced it will push back the 2009 Ford F150 pickup for a couple of months to help dealers clear their lots of leftover 2008s.

So any of you waiting to get your hands on the newly designed truck including the cargo package, you'll just have to do with some pictures .

RISING GAS PRICES BRING OPPORTUNITIES FOR MORE PROFIT

I talked about Generation Y last week.  This week I'd like to talk about Baby Boomers for a minute.  I've been talking to quite a few Boomers lately about the high cost of gasoline and what they are doing in the face of $5 a gallon.

I asked them if they were building a new house in today's economic climate, what are some features they would look into adding to their home.  Three things came up quite often.

ALL of them said they would add a home office.  Not just a spare bedroom turned into one, but rather a room designed to be an office.  Some of them are anticipating their employers wanting them to work from home.  Having High Speed connections and cables for everything from phone to TV were an absolute minimum.  A walk-in closet for paper storage and possible a built-in fire proof sale.  Recessed lighting and floor electrical receptacles along with an exterior door were on their wish lists.

TYPICAL HOME OFFICE

EXTERIOR HOME OFFICE (kit building)

Next was a small home theatre room.  Nothing too big, just enough room for 6-8 people. This is an option you should have already designed.

The last item was wanted by half of the Boomers and caught me off guard!  An outdoor yard shed with potting benches, a hothouse, sinks and tool storage. This is something that I've always wanted but to hear it from others was quite a surprise. 

POTTING SHED WITH HOT HOUSE (another kit)

Create designs for these three wishes and offer several choices for each, priced with floorplans and you may be surprised how many you can include in your homes.  The home theatre and home office can both be built in the factory as part of the home.

ADHESIVES USED IN MODULAR HOME MAY HAVE CONTRIBUTATED TO HOME FIRE

The Massachusetts Department of Public Safety's Board of Building Regulations and Standards is starting an inquiry into the adhesives used by Superior Homes of PA that contributed to the spread of a fire in January of this year in Acushnet, MA.

The 2 story home had a front porch where a lit cigarette started a fire and spread to the main structure.  From there it spread through the space between the 1st and 2nd floors, igniting the flammable adhesive.

The fire was NOT caused by any manufacturing defect! 

The Board of Building Regulations and Standards has sent letters to independent third party inspectors that do house inspections in the factories where modular homes are manufactured.  They are seeking answers to two questions from the inspectors.  First is why factories are using that particular adhesives to glue drywall to the interior walls and ceilings and if there is an alternative.  The second question is why there is such an open space between the first and second story of homes. 

Answers are to be back to the Board by June 30.

HOW TO APPROACH THE SUBJECT OF ADA

The architect's saying of  "Design for the young and you exclude the old; design for the old and you exclude the young" has never been more apropos then when you're talking about ADA Compliant kitchens and baths.

When you sit down with Baby Boomers and start designing their home, I'll bet that you hardly ever ask about "handicap appliances".  The problem is that when people think of safety features, visions of hospital medical supply equipment and "ADA compliant" fixtures come to mind.  Just the thought of asking that question seems absurd especially if the people sitting across from you look healthy, wealthy and drive a new convertible!  That could send the wrong message to them, make them feel just a little insecure about their age and look at you with scorn.

If you said that to my wife, who is a card carrying AARP member, you better hide under the table because something would be flying towards your head.  She is always the prettiest girl in our circle of friends and looks FABULOUS!

But guess what?  I've talked to her about ADA and her insights about the subject should help you approach the subject with more confidence.

She was reading an article about "Inclusive Design" that addresses this very subject and it will give you an insight into a different approach to the question "Have you thought about handicap fixtures for your home".

According to Roger Coleman, a  Professor of Inclusive Design and co-Director of the Helen Hamlyn Centre at the Royal College of Art,

"Inclusive design is not a new genre of design, nor a separate specialism, but an approach to design in general and an element of business strategy that seeks to ensure that mainstream products, services and environments are accessible to the largest number of people."

I'll go into more depth about this and discuss a checklist for working this into a design session with your customer in a later article.  In the meantime, click on the link in Red above to learn more about Roger and Inclusive Design.

WHEN 80-90% COMPLETE ISN'T

I've been in the construction business for almost 30 years and have stick built homes as well as panelized.  I was also a sales rep for several of the biggest modular and HUD manufacturers in the industry.  With that as a background, let me tell you a fairy tale that some in the industry still cling to!

Years ago, both the HUD (manufactured) and modular companies out there were building two box ranch style homes.  Sometimes the only difference between the two was if the floor joists were wood or had a steel frame.  Manufactured homes were sold like cars and the salesperson needed a state auto license to sell them.  Modulars were inspected using the same rules and regulations as a stick built home.

Telling prospective builders that their homes were 80-90% complete when delivered was very accurate then.  The foundation for a modular ranch could be either a full basement or a crawl space.  Finishing it was easy and the front porch was usually the same stair systems that were used on the HUD product.

Well, times have changed, even though some manufacturers haven't.  I've been looking through a lot of manufacturer's websites lately and there is starting to be quite a difference between them.  Yes, there are still some factories turning out mostly two box ranch homes.  But now there is a whole new breed of homes that have come into the market from the modular guys and management and sales reps are still using that 80-90% complete line!

I've seen 4, 6 and even 13 box houses arriving at the job site.  Some of these take two days to set and another day to finish the weathering-in phase.  These home require more than the manufacturer supplies.  Most companies don't want to ship garage or porch packages.  Another truck needed for them means very high freight expense. 

Then there is the finishing of these homes.  If you have an 6 box home delivered with 4 dormers and custom stairs, you could be 45 - 90 days just finishing the interior marriage walls, the exterior siding, porches and garage. And Lord help you if your factory can't build the attached master bedroom because it can't be factory built and you've got to stick build it, adding even more time.

The old adage of 80-90% complete from the foundation up is now more likely to be 60-70% complete.  This is not a bad thing, it simply means that you can't take that saying as gospel!

When you have a plan that calls for 30-40% of the home to be completed on-site, you are starting to lose that 10-20% savings that you are told you have by using modular.  You still have the speed advantage of having it factory built!

If you are a modular builder that has never done stick building before, you really need to get your numbers down and make sure you won't be losing your shirt.

Modular is still the way to go to make money in this industry, just take that "80-90% complete" stuff with a grain of salt.

OBSERVATIONS AT WALMART

Yes, I shop at Walmart.  There are two of them within 5 miles of my home.  I not only shop there, I observe the people, both the customer and the store personnel.

People watching at Walmart is like sitting at an open air cafe.  Depending on the time of day, you will see quite the cross section of America.  Early mornings seem to be the time when the AARP crowd hits the store.  They move slowly through the aisles, meeting friends and talking about grandkids.  Their shopping carts are filled with cereal, small loaves of bread, Depends and some fresh vegetables.  Most seem to be from blue collar backgrounds.

About mid morning, the younger crowd starts to show up wearing their long shorts and exposed briefs pushing carts with big packages of diapers and milk, and looking through the CD and Game Cartridge racks.  The young girls are rummaging through the clothing racks like Sherman through Georgia.  The hotter the weather, the more exposed skin you see!

The evening crowd seems to be mostly family people buying their groceries, hardware and clothing.  It's not unusual to see their carts piled high with frozen food, snacks, clothing, toys and a couple of lawn chairs.

Why do these people like Walmart?  I think there is a two fold answer.  First, it's the place to meet friends and talk and second is the pricing.  If minimum wage were actually keeping pace with the cost of living, I believe Walmart's days would be numbered.

I was in a convenience store the other day and a woman got $5 worth of gas but bought a carton of cigarettes for $58.00 and then complained about the high cost of gas!  Do we have our priorities screwed up?

Back in 1960 (yes, I'm that old!), I knew a man in our town that worked as a sales person in a locally owned shoe store.  His wife did not work outside the home.  He owned a beautiful brick 2 story home, had 2 kids who both went to college and the whole family went to Church every Sunday.  He bought a new car and saved for retirement.  AND HE WORKED IN A SHOE STORE!  I heard he made over $3.00 per hour!

Today that is a minimum wage job.  At $5.85 an hour, how can anyone buy one of your custom built homes? 

Here is a chart that illustrates the problem with minimum wage:

1960	Price	Time needed to buy
New Home	$16,500	8 yrs 3 months
New Car	$1,800	11 months
First Class Stamp	$0.04	2 min 30 seconds
Gallon of Gas	$0.31	18 minutes
Dozen Eggs	$0.57	34 minutes
Gallon of Milk	$0.49	30 minutes
Pack of Cigarettes	$0.27	16 minutes
Minimum Wage	$1.00 per hour
2008	Price	Time needed to buy
New Home	$250,000	20 yrs 4 months
New Car	$24,000	5 yrs 7 months
First Class Stamp	$0.42	4 min 30 seconds
Gallon of Gas	$4.10	42 minutes
Dozen Eggs	$2.55	27 minutes
Gallon of Milk	$3.99	40 minutes
Pack of Cigarettes	$5.25	54 minutes
Minimum Wage	$5.85 per hour

 

In order to keep pace with 1960, the minimum wage would have at be at least $14.17.  Now that's an issue I'd like to see Obama and McCain tackle!

I can almost guarantee that very few of your carpenters, handymen or office staff makes over $14 per hour.  And even if they did, they still wouldn't be able to buy one of your homes!

PA TO TAX HOMEOWNERS LIVING "OFF THE GRID"

Whenever you decide that you've had it with the electric company and want to live "off the grid" by using a wind turbine generator, think again.

In the Cambria - Somerset region of southwestern PA, the municipalities have begun adopting windmill ordinances which would impose permitting fees and annual renewals.

Local officials are taking some criticism for their actions because the proposed annual charges appear as though the local governments want to cash in on new energy sources.

To install an industrial-sized wind turbine, the permit fee is $1,500 per megawatt of electricity produced. For a residential system, called “Premises-Use Wind Turbine Generators,” the permit fee is $500.

For that fee, township employees make certain that setback requirements and height requirements are met, as with any other new installation or building or road for which a permit is required.

Beyond that, annual fees would depend on whether a system produced more electricity than a household requires, and whether that excess went on what’s known as “the utility grid” and the homeowner is paid for it.

But selling any excess power produced by a windmill is not simple.
According to spokeswoman Denise DiNunzio of the Pennsylvania Utility Commission, these are the steps required :

Customers must contact local government agencies to verify windmill ordinances, and also contact the local utility company to request a site visit to determine if an interconnection is feasible.

The utility company, after a visit, provides an estimate of feasibility, cost and engineering requirements.

The utility must approve any interconnection, and the windmill must be permitted by the local government.

Called “net metering,” small wind projects must be compensated for excess power generation at full retail value, but the Public Utility Commission is in the process of finalizing the definition of “full retail value,”

Other county governments in PA are watching to see if this is a practical approach to "regulating" wind turbines.

We sure wouldn't want people getting free electricity and not being able to tax them.

GENERATION "Y" BUYERS

To understand who you're new first time buyers are, you need to know what the term Generation Y means.  They are individuals born from 1977 to 1995.

They have never known a world without computers, Starbucks, reality shows and specialty clothing stores.  They were enrolled in dance classes, music classes and watched Nickelodeon.   Their parents made sure they went to soccer practice and if their parents didn't think little Brad or Britney got enough playing time, they would get in the coaches face. 

They don't know who Frankie Valli or Meadowlark Lemon are.  When asked questions like...Who was the President of the Confederacy or who invented the steamboat?; they look like deer caught in headlights.

They don’t believe in paying their dues at work. They want respect at the office now and if they don’t get it, they’ll move on. Similarly, they don’t wait to buy homes.

They invented MySpace and FaceBook and play Halo and have online virtual lives.  Cell phones are their main method of communicating and they really do understand how they work.

I find myself calling my 28 year old daughter to ask how to work my phone and her fiance how to get my new stereo and LCD TV to work together.

Now GEN Yer's want to buy  homes and there you are stuck with plans that work well for people in their late 30s and older.  OOPS!  Where's the media room, gourmet kitchen, high speed routers, cable connections and other things they want?  They want it all!  Except large yards and trees and vegetable gardens.  Sleek and efficient is their mantra. 

The only thing that keeps them excited is looking for the latest flat screen and if their Netflix DVD has arrived in the mail.

Am I putting them down?  Absolutely NOT!  Do I wish I was 30 again?  NO!  Could I sell them their first new home?  I don't know!

I look at homes with nice green yards and patios and a swimming pool with a big BBQ area and go...I could live there!  They look at the same house and see a lot of work that would cut into their entertainment time.

If you really want to go after the GEN Y people, you've got to move fast.  They won't wait around a week for your quote, they won't understand when you say you don't use a computer and they will not tolerate being ignored.

You need to brush up on what they want in a home and with the help of your factory, come up with a couple of easily modified plans that can be ordered and built quickly.  You may also want to go to some of the local real estate investors with plans for multifamily modulars and show them that you understand what the GEN Y people are looking for and you've got it.   They are the next hot market.

RATING FACTORY WEBSITES #6

I rate the sites from 0 to 5 for both the builder and consumer content. This is just my opinion.

0. Non-Existent

1. Amateurish, low quality pages and lackluster

2. Somewhat boring and hardly kept my interest

3. Average with a nice presentation

4. Very nice presentation, makes me want to look around the site for awhile

5. WOW! Somebody put together a great site that features not only their product but gives a unique insight into their business.

Here are my picks for this week!

MODULAR HOME (click on the name to visit site)

OAK CREEK HOMES - Texas has a lot of things going for it.  One of these is Oak Creek Homes.  Their website is easy to explore with information about modulars and manufactured housing.  They offer a lot of choices for the consumer and information and an email and phone number for prospective builders.  Click on the "Super Size" button and watch a very nice professional video about adding space to a home.  It's a little weak for the builder but as I said, there is a way to get to the builder side of their business directly.

Consumer 3   Builder 2

PROBUILT HOMES - Here is a site that at best I'd call average.  There are things to see on the site but it isn't very interesting for the prospective new home buyer.   As for the builder looking to convert to modular homes, there is almost nothing except for a small blurb in the last line of the last paragraph of the company history.  They may build good homes, but their site really doesn't look sharp or hold your interest.

Consumer 3   Builder 1

ROCHESTER HOMES - All I can say about this website is YUCK!  It looks like it was put together by an intern with nothing better to do than put something on a website.  The wording style is annoying, the faded background pictures interfere with the wording and the pictures of the "home set" are terrible.  Why show a winter set?  I was depressed just looking at it.  If this is one of the biggest modular home manufacturers in Indiana, the website should reflect that.

Consumer 1   Builder 1

PLEASANT VALLEY MODULAR HOMES - This is a site that will keep your interest because of the pictures.  They have them everywhere!  The biggest problem I have with the site is that it is very wordy.  I don't like like reading stories on every page and the font style and size is irritating.  The have a very nice builder page that gives quite a bit of information if you're looking for a factory to hook up with.  Overall it's better than most.  Love the kitchens!

Consumer 4   Builder  3

CREST HOMES- When you're one of the biggest modular home builders in the US, you should have a website to match.  Does it?  Not exactly.  It tends to look regal and the pages are filled with useful information.  Pictures are crisp and clean.  The Builder Section is "Under Construction" which bothers me as this company has been around a long time and that should be completed by now!  Overall it's a nice site with but with no imagination.  They can do better.

Consumer 4   Builder  0

BUDDY, CAN I MOW YOUR GRASS FOR $400?

In more and more towns and communities across America you will see houses with the grass growing over a foot high and utility notices attached to the front door.  When the grass gets to the point of needing cut, the municipal governing bodies are either sending out their own workers to cut it or hiring outside contractors.  The cost of cutting grass at a foreclosed home is typically $400 or more!  The cost is then billed to the homeowner or levied against the property.  Having this done 5 times over the spring and summer could add $2,000 to the levied costs on the home.

These houses have been setting empty for more than a year, victims of foreclosure and abandonment.  From swimming pools filled with murky green water to patio and decks falling apart, these houses are eyesores in nice neighborhoods.  If you are trying to sell a home next to one of these abandoned homes, you are in for many months and perhaps years of nobody making an offer on your home. 

Now some states, like Ohio, are speeding up the process of foreclosure sales to 30 days hoping to cut the red tape that has held up transfers of these homes.

If the abandoned homes happen to be in a state that has hard winters and there is no heat in the house, pipes burst and when spring arrives, the black mold grows on everything.  Again, if you had your house for sale next to one like this, do you really think anyone would buy yours, let alone the moldy one next door?

Even if the housing market hits bottom today, it will take years to fully recover from this problem of foreclosed housing.

WHERE CAN CONSUMERS LOOK FOR ANSWERS?

I opened my email today and found a comment for one of the articles I wrote awhile back.  I was just going to post it like I do others but then I started to think about the question they asked and thought that the real answer to their question was so complicated that I should spend just a little more time on it.

The comment:

Has anyone had any problems with Westchester homes? My wife and I are thinking about buying one and I can't find anything on line about problems.

If I were trying to find the answer to that in this information age, the first place I would look is on the Internet.  That's where these people turned to find help with their question.  It's great that they are looking to go modular.

Here is where this can go in many different directions.  Assuming that Westchester Homes builds a good modular home and also assuming that their authorized builder has a good reputation and everything they've found out so far is good, then why go to the Internet?

There are a lot of reasons that people go there, but in this instance, I think that even though they believe they are making a good decision, they want it confirmed by someone else.  And they believe that "someone" can be found on the Internet.

If you were going to invest hundreds of thousands of dollars into what could be your biggest investment ever, you would probably do the same thing these people did.  But what you find on the Internet can range from nothing about a manufacture having problems to some really "pissed off" person ranting online for everyone to read.

Usually the ranting is aimed at the modular manufacturer but in reality the blame is usually the fault of the builder or in the consumer themselves.

If a modular manufacturer does build a shoddy product, it would not be long before they were forced out of business by better built modular home factories or by lawsuits.  Deliberately building crappy homes has never been any business owners plan to make a profit.  Every modular factory has a service department dedicated to fixing things that are the factory's fault.

Most modular home builders are local people that really have a lot invested in their business as far as trucks, equipment, offices and payroll.  But sometimes the builder will fall on hard times and work on a customer's home may suffer.  Then the customer and the builder start to have problems.  In most cases, both the builder and the customer blame the factory for problems with the home that are not the factory's fault.  I've seen builders blame the factory for missing parts to the front porch when none was ordered from them.  Builders will look to any excuse that keeps the customer off their backs until they can fix the problem.  It's just human nature to pass the buck.

Back to the comment; instead of asking if anyone had a problem with a Westchester Home, which is a self fulfilling prophesy, they should be asking to meet some of the people the builder has built houses for in the past.  If they find that previous customers were unhappy with the builder, then and only then should they call the factory and ask if there is another builder they could work with.

I am sure that they chose Westchester Homes because of their good reputation and I wish you a long and happy life in your new home.

HOMEOWNERS DENIED INJUNCTION BY JUDGE

The homeowners in the Saddlebrook subdivision in Star, Idaho have lost the fight for an injunction against Saw Tooth Custom Homes on Thursday.

The injunction would have stopped construction of 110 "modular homes" from being built in one of the newer phases of the subdivision.  Homeowners last week attempted to stop the trucks hauling the homes into the subdivision by blocking driveways but the police made them move their cars.

The homeowners are now headed to Federal Court with a request for an injunction.  We'll continue to monitor the situation.

EMBEZZLEMENT CHECKLIST

Let's hope that none of you have had an employee that has stolen something from you or your company.  It hasn't happened to you? 

All I can say is "WAKE UP!".

Embezzle means to  take for personal use money or property that has been given on trust by others, without their knowledge or permission.

Embezzlers come in many forms, from the accountant with a gambling problem, a staff person that is having a tough time keeping things together at home to the people working on your houses taking materials and tools for their own use.

Here are some of the most common types of embezzlers:

• Stealing Cash. In the simplest situation, cash is received and the employee merely pockets it without making a record of the transaction.  This is rare in our business because most of our transactions are by check.  Make sure your petty cash fund is secure however.
• Check Kiting. Check kiting takes advantage of the time period between deposit of a check and collection of funds. The check kiter steals money from the company and deposits the money in an account. He then writes checks back and forth between two bank accounts, his own and that of the business, each time escalating the amount of the check. This has been made more difficult since the banking commission has moved to digital banking.  An example of this is the email scam of sending you a check for lottery winnings and then having you deposit the check in your account and sending a service fee amount to the scammer.  Everything hits the fan when their check bounces.
• Payroll Fraud. Enterprising embezzler sometimes add relatives or fictitious individuals to the company payroll and thus enjoy several salary checks each week instead of one.   I have personally seen this one at a company I worked for about 25 years ago.  The payroll clerk got away with it for almost a year.
• Fake Loans. Taking out a loan for a business and not telling the owner is a common way for embezzlers to get their hands on cash quickly. When the loan eventually comes due, the embezzler is long gone.
• Purchases. This is a hard one to find. Your bookkeeper sets up a dummy business account and starts invoicing the business for expenses.  They are paid to the "fake" account which is really your bookkeeper and the money is gone.  The more trusted the employee, the more likely this could happen.  I've read recently about accountants and bookkeepers stealing hundreds of thousands of dollars.
• Kickbacks. Purchasing agents can accept kickbacks from suppliers from purchasing goods at inflated prices.  This is another prime target for embezzlers.  Having their buddy add 10% to an invoice and then authorizing payment and splitting the money is very common in our industry.  I've even seen owners do this to get out of paying taxes!
• Bogus Expense Receipts. Salespeople and others can pad their expense reimbursement requests. Alternatively, personal items can be bought and charged to the company.
• Stealing Company Supplies. Employees can make personal use of company tools, supplies and equipment, as well as abusing company credit cards and cell phones using both for personal expenses.

If I were to start looking for an embezzler, I'd start with the Expense reports and then start tracking company tools and materials.  Next would be the kick-back scheme.  And have your bookkeeper audited.  It's just good business practice to audit anyone with their hand on your checkbook.

Is this happening in your company?  I don't know.  But you should!  Take the time to safeguard your business against theft by your employees.  The fact is that customers only account for about 20% of what is actually stolen every year from retail stores, the employees steal the rest!

SAFEWAY HOMES EARNS FORTIFIED HOME DESIGNATION

Safeway Homes, a modular home manufacturer in Lexington, Mississippi is the first modular company to earn the Fortified Home designation in the state.

Safeway Homes is one of two companies that moved into the closed Fleetwood manufacturing facilities in Lexington.  In 2004, Lexington Homes, a manufactured housing company bought Fleetwood's Plant One and started production.  In 200r, they bought Plant Two and in four short years have produced 4,000 homes!

Safeway Homes opened in 2005 in Plant Three and has produced over 400 homes.  They build affordable housing engineered to withstand 150 mph winds.  The homes can be built on either foundations or slab.

Fortified…for safer living® is a new-home construction designation program of the Institute for Business & Home Safety (IBHS), a national nonprofit organization established and supported by insurance company members.

“Fortified” techniques and construction materials raise a home’s overall disaster-resistance above the minimum requirement of local building codes.  Extra attention is given to areas especially vulnerable to harsh elements, including doors and windows, roof construction and the foundation.

"The desire was to build a home that was very strong, but also very low-cost to maintain," said Dan Hobbs, CEO of Safeway Homes in Lexington, Miss. "The whole purpose was to build excellent quality work-force housing. It's cost-efficient housing."

Safeway Homes is an example of modular housing meeting the needs of an area.  Affordable and safe housing!

EXCEL HOMES READY TO ADD ANOTHER FACTORY

Excel Homes has announced plans to purchase and restart the 40,000 sq ft factory recently occupied by Oxford Homes in Oxford, Maine.  The company has been looking to expand into the New England market for some time and this is their opportunity.

Excel Homes will use their AvisAmerica Custom Homes division as the name for the homes produced in the plant.  This will give AvisAmerica two manufacturing facilities, in Avis, PA, in addition to the two Excel factories in Liverpool, PA and Ghent, WV.  The Ghent plant has been closed in recent months awaiting the housing turnaround in that area.

This is welcome news to both the town of Oxford, Maine and builders throughout the New England area.

HOMEOWNERS CLASH WITH MODULAR BUILDER IN IDAHO

Homeowners in the Saddlebrook subdivision in the town of Star, Idaho are up in arms today because of modular homes being brought into their community.  It seems that the development had two phases setting for some time with the utilities in and ready to go. 

Then last Thursday evening, 4 trucks showed up with modular homes for the foundations that had been put in previously in one of these phases.  Homeowners jumped in their cars and blocked the trucks from delivering the homes.  The police were called at 10:30 PM and told the homeowners that this is a civil case and they had to let the trucks through.  The police have given the truckers citations because they violated some road ordinances.

On Friday the first two homes were set and two more are reportedly on the way to the development today.  An RV was parked beside the two modulars with what might have been guards inside for the weekend.  The homeowner's association is trying to get a restraining order today.

Sawtooth Custom Homes, the manufacturer, shows a very limited number of floorplans on their website and they do look like true modular construction.  They are manufactured in the former Superior Modular Systems (SMS) plant.  The address on the Sawtooth Custom Homes website is Star, Idaho.

At first glance, this would appear to be an open and shut case against the homeowners but from what the pictures below show and  after looking at the roof pitch, they almost look like manufactured housing without the steel frame! You be the judge!

And here is a picture of the RV

RATING FACTORY WEBSITES #5

I rate the sites from 0 to 5 for both the builder and consumer content.

0. Non-Existent

1. Amateurish, low quality pages and lackluster

2. Somewhat boring and hardly kept my interest

3. Average with a nice presentation

4. Very nice presentation, makes me want to look around the site for awhile

5. WOW! Somebody put together a great site that features not only their product but gives a unique insight into their business.

Here are my picks for this week!

MODULAR HOME

BERACAH HOMES - This is an interesting site.  The site is targeted toward the consumer only.  The reason I really don't find this objectionable is that they have a unique way of doing business.  They use a "preferred dealer" base with a map showing each builder's territory.  They also link to each builder.  They only market in an area called the Delmarva Peninsula, which covers all of Delaware and the eastern parts of MD and VA; about 100 mile radius of the factory.  Because they are relatively small and do not compete in a large area, most people in their territory know them and their builders.  Nice, clean website!

Consumer 4  Builder N/A

STRATFORD HOMES - Stratford Homes has a website with all the elements that a consumer would want to learn more information about their homes. Two big drawbacks... one is their floorplans.  You must pick a state to get to the "E-catalog of homes" and when you do get there, you must download a 2 meg PDF file for each one.  I stopped at two!  The other drawback is that there is absolutely no information or contact for a builder wanting to become a modular builder.  There is plenty for the consumer, so I guess a builder has to go through the consumer channel to get to someone.  And did I mention that the site is rather DULL!

Consumer 4    Builder 0

R-ANELL HOMES - Their site is probably what you would call average.  There are many things for the consumer to browse through and lots of floorplans.  The site has names and addresses of its builders and adequate contact information to contact the factory.  There is even a picture of Dennis Jones, the president of the company!  What is missing for the builder is anything geared to them.  Yes, there is a builder area but when you get there, you find it's just for existing builders.  Prospective builders use the same form and call the same phone numbers as the consumer.

Consumer 3    Builder 1

KEISER HOMES - This site POPS out at you.  For one thing, the print is huge.  That's neat but a little over the top.  After that, it becomes a very nice site with lots of info for the consumer along with a list of their builder's websites and floorplans.  For the builder, there is a list of sales people and an application but not much else.  I do like the way the floorplans come up and the ease of printing them out.  Overall, this is a nice site without a whole lot of needless information.

Consumer 4    Builder 2

LOG HOME

OLD VIRGINIA LOG HOMES - I went to this site expecting just another log home factory.  Boy, was I surprised.  This is how you'd expect 'good ol boys' from the south to build a website; music and all!  At first I thought I had taken a wrong turn somewhere, but after exploring the site, reading the information and seeing the owner's picture along with the entire personnel of the factory, I realized they are building homes with great pride and love for their craft.  I can't imagine them wanting to mass produce their homes.   Here's an "atta boy" from me to you!  It does not appear they use a builder network, but if you are a builder in their territory, I'd look into doing the finish work for them.

Consumer 5    Builder 0

BLUE RIDGE LOG CABINS - Here is a rarity in the log home business; a log home built in a modular plant.  NO! It's not a modular home with wood trim, it's a real log home!  All I can say is visit their site and watch the video.  That says it all.  Again, here is a factory that either has no builder network or doesn't want one; I can't tell from their site.  Nice overall site but a little lite on on information that would keep a consumer on the site for more than 5-10 minutes.

Consumer 4    Builder 0

MORTGAGE LENDERS TRY NEW TACTIC

Mortgage lenders now own so much foreclosed property that getting it sold has been a big problem.  Their solution....cut the prices until the property sells. 

The trend is most dramatic in many parts of California, Florida, Nevada and Arizona, where prices skyrocketed during the housing boom and are now falling precipitously.  Since January, 25% of all real estate sales have been distressed properties.  Some areas such as Las Vegas and Detroit have seen a houses selling for about 50% of pre-recession pricing.  Many areas are seeing 10-20 bidders on each discounted house and some are actually selling for more than the mortgage lender needs!

In developments across the US, speculators bought housing 3-5 years ago hoping to make money when they flipped them.  They are now in foreclosure and some of these are selling up to a 90% discounted price.  New condos selling for 60-70% off the original listed prices are coming soon!

Who are the winners?  Three people are the true winners in this housing sell-off; first time people looking to buy a home that have a good credit rating and cash for the down payment.  Investors looking for good property at a cheap price.  They usually have the cash to wait out the recession and will probably rent the houses until that time.  And the last group of people are the mortgage lenders!  They are dumping properties and then financing the sale.  They'll still lose money on the transaction but will stop bleeding cash and start putting some back into their coffers.

Who are the losers?  Again there are three.  The first are the people that have been foreclosed upon and now can't qualify for another home purchase.  They will be able to find more affordable rentals however.  The second group of people are the ones that need to move because of their job or want to retire to another state.  They are now competing with discounted homes in their area and a lot of these folks will be  "upside down" if they have a mortgage on their property.  The last group is us!  Lowering the sale prices means that property taxes collected by municipalities will be less which has the effect of raising existing homeowner's real estate tax!

How can homebuilders benefit from this trend? EASY!  Turn part of your business into remodeling!  A lot of the properties that the investors are buying have been left to the elements and need sprucing up.  Properties bought by first time buyers will need new decks, patios and porches as well as kitchens and baths.  And don't forget the mortgage lenders that are holding foreclosed property; they need to make sure that the property is properly maintained until a sale.

ARE YOUR KITCHENS STUCK IN THE 60's?

If you buy your homes from a manufacturer that doesn't have the services of a kitchen designer available, you may be stuck with designs that haven't changed much since they built the factory.   Do you have to supply the kitchen layout for them?

Here are some examples of kitchens over the last 60 years and one that could be in your future.

 1950  (this looks my my mom's!)

 1960 1970 1980 1990 2000 2010??????

AND AWAY GOES YOUR EQUITY DOWN THE DRAIN

I've been reading disturbing news about foreclosures and bankruptcies in the US and then I came across this tidbit of information from a leading economic advisor.  I can't add anything to this guy's story, so here it is:

At the end of March, nearly 8.5 million homeowners had negative or no equity in their homes, representing more than 16 percent of all homeowners with a mortgage, according to Moody's Economy.com Chief Economist Mark Zandi. By June 2009, he estimates that will increase to 12.2 million, or almost one out of every four homeowners with a mortgage.

Zandi said, "For most, their home is their key asset. If they have no equity in their home, likely their net worth is negative too. Their entire balance sheet will be underwater."

SKYLINE TO CLOSE BOSSIER, LA PLANT BY MID JUNE

The town of Bossier, LA has another 80 people on the unemployment rolls as Skyline Corp has closed it's manufacturing plant there.  The factory will say operational long enough to finish homes already sold.  Company officials have had no comments about the closing.

The Louisiana Department of Labor has brought in its rapid response team to help those displaced workers find jobs.

ADDING EXTRA SERVICES GIVES YOU AN ADVANTAGE

When times get tough, the tough DON'T lower their prices!

I pick up one of the local "penny shoppers" every week and go through it looking at what the "Street Dealers" are discounting today.  I define "Street Dealer" as an authorized dealer for both manufactured (double wide) and modular homes and a "penny shopper" is what we call a bargain sheet here on the east coast.

For the most part, Street Dealers offer both types of homes, displayed with furniture and have one or more sales people sitting at desks near a window to see who drives onto the lot.  Then they usually look around and see if any other sales person is getting up to greet them and if not, they finally pull themselves away from the Internet and go out to greet them.  I've also seen street dealer's sales person stay in their office and wait until the customer comes into the model home or showroom, look around for a minute and then come out to greet them.

"Have a look around and if you have any questions, just stop back in and I'll try to answer them.  Oh by the way, could you sign our guest book?"  This is a very common greeting in that industry.  They have been worn down by tire kickers over the years that just drive up to the sales lot for an hour of entertainment.

And did I mention that if the prospective buyer had a real construction question, the sales person looks like a deer caught in headlights.  Aside from knowing that "the model at the end of the row has an advertised discount price of $69,000, that's $20,000 off our regular price", they really are just like car salesmen.

When someone makes an appointment with you, they have either seen your ad in the local media, were given your name by the factory or maybe they've seen one of your new homes.  No matter how they get to you, it's up to you to give them a reason to purchase their next home from you.  One of the best ways to get them to swing to one of your homes is to offer services and features that add value but doesn't cut too deeply into your bottom line.  This allows you to offer homes without discounting to match a street dealer's price.

Here are just some of the services you can offer that are included with every new home purchased from your company:

• FREE LOT INSPECTION
• FREE STAKE OUT AND EXCAVATION INSPECTION
• AQUIRING ALL BUILDING AND ZONING PERMITS (customer pays for permit costs)
• AQUIRING ALL UTILITY PERMITS (customer pays for permit costs)
• FREE CRANE SERVICE (include a basic setup  in house price)
• FREE SET-UP CREW (include a basic setup in house price)
• FREE MATERIAL INSPECTION AFTER HOME DELIVERY
• FREE INSPECTIONS THOUGHOUT BUILDING PROCESS
• FREE HOME WARRANTY PACKAGE
• FREE APPLIANCE UPGRADE (usually less than a $1,000)
• FREE BACK FILLING AND TOPSOIL SPREADING
• FREE GRASS AND SELECTED SHRUBS
• FREE STONE DRIVEWAY AND SIDEWALK

How much did all this cost?  Not much when you consider that it should be under $5,000 and you didn't discount your price against the street dealer.  Do the street dealers do these things for the customer?  For the most part, YES.  Do they tell the customer? NO!

The final step is to put a DOLLAR amount on every item, sum them up and put that on the list of the services you offer.  Don't skimp.  If your time is worth $100 an hour, how many hours will be involved in getting permits?  Probably 5-10 hours and that's $500 -$1,000.  It adds up quickly.  Be sure to tell the customer that all this is included in your price, not added after they get their mortgage and the extra money comes out of their own pocket!

Come up with your own list and you'll quickly be surprised how much value your actually add to your homes.

GAS PRICES FORCE PEOPLE TO STAY HOME FOR THEIR VACATION

Most of the tourist attractions are reporting a downturn this Spring because of the gas prices.  People are even vacationing at home.  I heard the term Staycation used to describe this.

My son is a sales rep for a large company that sells hardware to landscaping businesses throughout MD, DE and VA.  He told me that he is seeing more people creating backyard sanctuaries and it makes perfect sense in today's climate of rising prices.

He is selling landscape designers products for their customers upgraded patios and decks.  And it's not just a new BBQ grill and some lawn chairs.  Some of these projects are in the $100,000 and up range with hot tubs, new and bigger patios, waterfalls and even grottos!  He is busier this year than last by about 50%.

If you have been having a down year, you might want to consider looking at upscale backyard patio and decks upgrades.

 

IT'S YOUR HORN....TOOT IT!

Today, it is more important than ever for smaller builders to TOOT THEIR OWN HORN and set themselves apart from the competition.  I have discussed many ways to get your name out there, including dropping business cards everywhere, signs on trucks, hosting a local radio show and others.

Let's assume that this works and somebody calls you and sets up a meeting to go over your homes and get a quote.  Here's where the tire meets the road!

I have never given a custom quote at the first meeting.  I have given the base price of homes but always wanted to see their lot before given them an estimated quote.  Then you send them home with some "Stuff" to look over while you prepare their quote.

The stuff you give them will either be so generic that it looks like everyone's "stuff" or in most cases it's just some thrown together papers and brochures.  What are you trying to say to these prospects and how do I set yourself apart from other builders?

You need to put together a marketing package that highlights not only your homes but you and your business. 

Your marketing package should include some combination of the following information:

What sets you apart from the others:  This single page should highlight what you do that sets you head and shoulders above your competitors.  Be specific!  Go over your "hands on" approach to their home, the 15 point inspection at each phase of the construction process, your policy of $200 a day for every day your past the completion date, etc.  You don't have to tell them how you do things better, only that you do.

Manufacturer's brochures and literature:  You have to give your prospects something tangible to take with them.  People are visual.  Give them something of everything you have.  This is why your factory printed them, to give away.  If your manufacturer has a DVD, that's a plus!

List your services: This is where you tell your prospective customers what you do.  Go into detail about processes such as being responsible for obtaining permits, clearing and excavation, foundations, house delivery and set, and all the finish items including custom decks, garages and patios.  Each of your services can have a separate page.

Tell your story:  People buy homes from people they trust.  Have a page with your picture and history of your business.  Try to be lighthearted and put a bright light on you and your business.

Testimonials and Completed houses:  Everybody like to look at success stories.  Get some of your past customers to write a one paragraph article about their relationship with you during the building process.  Take pictures of their homes, both inside and out!

The home building process:  Use these pages to review the steps in building a home with your company highlighting all the standard features and benefits that better than your competitors.

Do you need a marketing company to help you?  NO!  The individual pieces of your marketing package can, in many cases, consist of word-processed files that are laser-printed and put in the package.  Make sure you always have 5 packages available to give out.

Will your prospects really take the time to read this?  Some will and some won't.  The ones that do will be impressed with the depth of your attention to details.  They are the most likely to buy from you.  The ones that don't read it are probably shopping for the cheapest price and they usually get what they pay for!

If you give out 50 packages a year and  and quote 25 prospects and 15 buy a home from you, isn't that what you wanted!

RATING FACTORY WEBSITES #4

Starting this week I'll only be reviewing Modular and Log Home manufacturer's websites.

A manufacturer's comment in an earlier article about rating websites mentions that this is not really the place that they want to attract builders; that they use an Extranet website for communicating with builders. If I were a builder looking for a new factory, I would like to know more about the company's builder efforts before I met with their sales rep. And as always, this is just my opinion.

I rate the sites from 0 to 5 for both the builder and consumer content.

0. Non-Existent

1. Amateurish, low quality pages and lackluster

2. Somewhat boring and hardly kept my interest

3. Average with a nice presentation

4. Very nice presentation, makes me want to look around the site for awhile

5. WOW! Somebody put together a great site that features not only their product but gives a unique insight into their business.

Here are my picks for this week!

Click on names to visit the sites

MODULAR HOMES

BARVISTA - The company was started in 2002 and I'm sure the website was launched about the same time. Consumers will find an average site with some confusing and missing links. If I were a prospective home buyer, I would probably just call one of their builders listed on the site instead of trying to figure out what is happening on the website. There is no information for builders looking to join Barvista; no emails, no contact person and no inquiry form. Prospective builders must have to use the Vulcan Mind merge to get information from them.

Consumer 3 Builder 0

GUERDON HOMES - This manufacturer's website is above average for the consumer with videos and floorplans. A couple of things set it apart for both the consumer and builder shopping for a modular home manufacturer. First is the link to "Our People" featuring photos of the owners and everybody else from the receptionist to the floor workers! And did I mention they've included names and titles!!!!! Second, there is a HOT button for changing the entire site to Spanish. What a great idea! Prospective builders have little information beyond what the consumer sees but there is a form for them to complete and email.

Consumer 3 Builder 1

INTEGRITY BUILDING SYSTEMS - Now here is a site that presents both the consumer and prospective builder with enough information to help make a decision. Though not a superior website, it will keep you interested for some time. Pictures and videos are good. A Builder Zone opens to more information about the company. The one downside I found was the link to the builder brochure in PDF. It turns out to be their mailing form with a page for an address and such. Tacky! This was their chance to give the builder something extra and they blew it.

Consumer 4 Builder 3

LOG HOMES

ROCKY MOUNTAIN LOG HOMES - Another great log home manufacturer. Their website is first rate for the consumer and the video about how they prep logs on that saw system is absolutely amazing! The only lightweight area is for the builder. But when you realize that a lot of builders live in their model home, it's understandable why the consumer side knocks your socks off. Did I mention that there is a picture of the owners!

Consumer 5 Builder 3

WARD CEDAR LOG HOMES - If you're looking for a very nice site that gives you all the information in a very easy to follow and straight forward approach, then you've found it. I was very impressed with the simplistic style. It didn't overpower you with lots of unnecessary stuff. There is an abundance of floorplans, email contact forms and lots of pictures. A prospective builder link opens to a full page of features and benefits for the builder along with a real person's name - Dana Delano - Director of Sales and Marketing. You can call, snail mail or email Dana!

Consumer 4 Builder 4

WHAT IS YOUR VIEWPOINT?

How do each of these people view the modular home building process?

The Builder Viewpoint

• Simple floor plans with little problems. Try to keep customers interested in ranch and cape cods. No 2^nd floor build out of Cape Cod homes. Do you know how many problems I get myself into when I try to match multiple roof lines and install dormers?
• Easy to assemble. Only 2 boxes. No bump outs, additions, mixed roof lines or dormers. If I wanted to do these, I would have become a custom builder.
• Cooperative trucking and crane companies. Truckers can get into any site with a little work on their part. They pay for all damages. Crane operators can lift anything, anytime and in any weather. Time is money!
• Good set crews. They arrive early and stay until the set work is completed. Never take over one day to complete the set. I didn’t figure any overnight stays. Factory should pay for that.
• Good finish crews. Preferably one crew to completely finish the home. Turnaround time is under 2 weeks. Factory said that almost everything is complete and I don’t understand why the finish crew needs so much time. Time is money!
• Lots or rebates and co-op advertising. The manufacturers give model home allowances, rebates on total sales, lots of literature and promotional material and help pay for advertising through a co-op advertising program. I’ll have that model home up one of these days and now they want to see copies of my newspaper ads. They don’t believe anything I say.
• Direct line to GM and Sales Manager. When I need to talk to someone about how screwed up things are at the plant, I should have the right to bypass their sales rep and go directly to the Sales Manager and preferably to the General Manager. It’s the sales rep’s fault anyway!
• Estimates obtained within minutes. These are simple homes and the manufacturer should be able to give me pricing while I’m on the phone. If the sales rep can’t give the builder the prices immediately, I usually call General Manager directly. I can’t believe I’m the first person to ask for that option.

Builder’s Salesperson Viewpoint

• Lots of floorplans. 40 is way too few. 100 is getting close but 200+ is great. If the customer can’t find anything in the manufacturer’s standard lineup, then I'll have my boss call the General Manager to complain about the miniscule number of house plans.
• Build anything for anybody. “Draw it on a paper napkin, we can build it.” Let the manufacturer create a new floorplan just for us to quote. Keep sending custom plans to the manufacturer every time the customer brings in a new napkin.
• Low pricing. I compete on price! Features and benefits are rarely discussed because I know the customer is only interested in the lowest price possible. Why would anyone buy from me when they can get it at the “dealer” down the street for $10,000 less?
• Lots of options. No matter what the customer wants, we can supply it. Kohler fixtures, Viking appliances, ceramic tile baths, custom windows and slate roofs are no problem if the customer really wants them. “I’ll get you a price on that by this afternoon” is my the theme song.
• Modify everything. Don’t like the look of that cabinet? Don’t worry, I know someone at the factory that will make that change? “We buy enough homes from them that they will do anything for us.”
• Be competitive with the lowest prices. Sell on price alone. Cut the costs on options if you must. Everyone knows that the low price sells everything.
• Lots of display materials. It is the manufacturer’s responsibility to supply not only material samples, but ones worthy of a Lowe’s or Home Depot.
• Instant answers from factory Sales Person. The factory rep knows all the answers to the customer’s questions. I call the sales rep while the customer is sitting directly across the table and I put the sales rep on the speaker phone so that the customer and the sales rep can talk directly. Why get me involved in this?
• Engineering department draws and redraws plans until customer happy. Redraws are made for the customer’s benefit any time they want them. There should be no charge from the manufacturer for this.

Manufacturer's Viewpoint

• Build from our existing floorplans. Every builder loves our floorplans even though I never ask  for their input. I know what sells!
• No change orders. The builder’s sales person has to keep control of this situation. Why would a customer want to make changes after the house is in the production cycle? It was fine then, why change it?
• No special order items in the house. I can’t be bothered with special order items even though they may be from the same suppliers we currently use. They don’t have approved SKU numbers and creating a new one involves a lot of work.
• Payment received on time. I expect payment on time….period!
• Take delivery as soon as the house is built, cleaned and inspected. I don’t want this house sitting on my yard gathering dust after it’s finished. I don’t care that you’ve just had 2’ of snow, a flood or anything else; I’ve got a pile of bills to pay and lots of money invested in that house and I want your money now.
• No service calls or nit-picking by builder. I build great houses. They are inspected by an independent 3^rd party and completely checked and cleaned before I ship them to the builder. Wouldn’t I have noticed if something wasn’t right?

Factory Reps Viewpoint

• Easy to Understand Options. I don’t understand why the builder and their sales person can’t understand our book. If they would just read they wouldn’t be asking me how to figure a 9/12 roof with storage with 16” o.c. and windows in exchange for our standard 5/12 roof. Everything is so easy to price. The roof pitch is on page 5; the 16” o.c. is on page 6; the windows (marked gable style) are found on page 27 and the engineering fees are found on page 45 under “special changes and features”. They must be idiots.
• I can’t change the price. No matter how hard I try, I can’t lower any prices. Oh, you talked to my Sales Manager and he said I could give you a better price. Did he happen to mention if he is going to pay my commission on the old price or is he just going to buy me another pizza?
• I don’t set the production date. I submitted all the paperwork on time. Engineering said that they are backed up and can’t get to it for a couple of days. I really don’t care that your customers are living in a Motel 6. Sounds like bad planning on your part.
• Did you sign the order yet? And why not? You didn’t get a building permit yet and the customer is still waiting on mortgage approval. This house is ready for production. Why did I bust my butt to get it ready for you?
• I have a builder that wants something special. Why does my Sales Manager always laugh like that when I tell him about your requests?

Engineering Viewpoint

• Use standard plans. Do you know how many man hours it takes to redraw a floorplan? And then you have to change all the elevations and foundation drawings. Can I back charge for this?
• No change orders. If the change order involves a redraw after it is released to production, then the sales rep and the builder’s sales person are idiots. Didn’t they know about the change before they signed the prints?
• No special code considerations. I design and build everything for IRC2000. Having to submit them to the state and have them reviewed by local inspectors is nuts because I always follow the rules and I have all our plans stamped.
• No talking to the builder, builder’s sales person or customer. I never want to talk to the builder or the builder’s sales person. They aren’t engineers and besides I am very busy all the time.
• One preliminary drawing and one stamped drawing. That’s all the engineering department gives the builder. Anything else should be charged to the builder no matter how many houses a year they do with us. I get it right the first time and it must have been bad communications between the customer and the builder that caused the problem.

Customer Viewpoint

• Build anything cheaper than anybody. The builder’s sales person said we could let our imagination run wild. Now they’re telling us that a 34’ wide home isn’t possible. What gives here? And how much does the factory want for that Kohler faucet? Hell, I can get it myself at Lowe’s for 1/3 that price.
• Factory builds it as soon as they get the order. We figured since the factory had already priced the custom circle top windows for us, they went ahead and ordered them for when we ordered the home. Now I understand that we have to wait an extra 2 weeks and we can’t get our home for 12 weeks. That’s not what the builder said.
• Call factory for details. The builder said that if we had a question, we could call the sales rep and ask him anything. The builder said he would just have to call the sales rep anyway and it would eliminate any misunderstanding if we talked directly to the sales rep ourselves.
• Visit factory and factory showroom anytime. We decided over the weekend to visit the factory on Monday. Were we supposed to call first? Never mind, we’re already here and showing us through shouldn’t be too much of an inconvenience. And since we have a little extra time, we would like to go over a couple of changes with the engineering department.
• Change orders up until it actually goes on line. It’s our house and we want what we want. What do you mean that adding a ½ bath to the 1^st floor will add another 3 weeks to our order? Our house is scheduled to go to the production line in 3 days; we can’t wait an extra 3 weeks.
• House is complete as shipped from factory, very little to assemble on site. The builder said that almost everything is finished at the factory. This place looks terrible and the builder says that it is “weathered in”, whatever that means. It looks like a hurricane hit and left all the debris inside our house.

UNSETTLING TIMES FOR HOMEOWNERS

As I mentioned in an earlier post, my wife drags me along to Yard Sales most Saturday mornings.  This week we visited some of the more upscale communities.  What I noticed started me wondering if this is happening in other areas of the country.

Almost without exception, a full one quarter of the houses were for sale.  Many of them had yard and garage sales.  I asked a couple of the homeowners about the number of homes for sale in the neighborhood and found out that a lot of homeowners were downsized by their employers and/or told they had to transfer to another city.

Some of the people holding the sales also pointed out houses that were either in foreclosure or just about there!  Home prices for resales have dropped so much in our area that several investors from out of town are making lowball offers on these homes.  And some of the homeowners are selling to them, for up to 50% off the listing price!

It was sad to see people trying to sell what was obviously not "leftovers" but rather newer computers, very nice furniture and even newer HD flat screen TVs.  I missed a 42" for $200 by a couple of minutes!  I told my wife we would have to start bringing more cash with us as most of these yardsalers.

One yard sale had a 2001 Grand Voyager for sale for $1,500!  It looked great!  I would have bought it if I could have bought the TV.