RSI The New House, a five-year-old home builder based in Newport Beach, Calif., is relaunching itself to focus on teardowns and rebuilds of older, dilapidated homes in southern California using a manufacturing system that the company claims is able to complete a house within 40 working days after permits are issued.
RSI is an offshoot of RSI Home Products—manufacturer of kitchen, bath, and home organizing merchandise—whose founder, Ron Simon, has pumped an estimated $100 million into the home building enterprise. Until recently, RSI’s business model has been to employ a customized manufacturing process to build new on-your-lot homes in existing communities. So far, it has built 103 houses in Menifee, Calif., which sold out in 10 months. It is finishing up 77 homes in Beaumont, Calif., and has 26 homes under contract in San Jacinto, Calif.
Martin Boyd, who three months ago joined RSI as its vice president of sales and marketing from Toyota’s industrial division, says those three development projects “proved that our manufacturing and construction processes work, helped us improve our speed, quality and cost; and demonstrated that we have a customer base for our products.”
RSI produces the external components for its homes at a factory in Mira Loma, Calif. Its eight house plans are designed so that plumbing, electrical, HVAC, hardware, cabinets, and other finish materials essentially can be installed quickly. RSI also does the landscaping.
While RSI has no immediate plans for new development, Boyd says the company is still open to opportunities from landowners.
As it has gotten its precision-built manufacturing system “down to a science,” says Boyd, RSI now is turning its attention to southern California’s aging housing stock. “There are a lot of late 1950s-, 1960s-style houses here that are small and falling apart,” says Boyd. Instead of opting for a costly and time-consuming renovation, homeowners can retain RSI to demolish their old homes and put up a new one on the same site at a cost that starts at $57 per square foot. (RSI uses its own framers and finish carpenters, but subcontracts foundation, stucco, drywall, and other “wet” trades, says Boyd.)
RSI brands its models and the manufacturing system that supports them as The New House and promotes them as efficient because materials from the teardowns are recycled into the reconstruction, and the construction itself produces minimal waste. The house plans range in size from 1,232 to 2,548 square feet, with two-car garages. Prices begin at $89,000, and Boyd says RSI will lock in a completed house price with customers before it starts building.
The company is marketing its relaunch via a revamped website and a YouTube video that features its first rebuild customer, the family of Dan Whitaker, who purchased a 1950s-style, 1,300-square-foot house in Costa Mesa, Calif., in 1997. That house had “a real bad foundation,” said Whitaker, and full renovation estimates were running as high as $200,000. Instead, he chose to go with RSI and its 2,401-square-foot model. From demolition to touch-up and final inspection took about 12 weeks. (RSI claims that the total time from move out to move in is averaging approximately 90 calendar days.)
Boyd says RSI is still studying the size of the rebuild market to determine potential demand. But he’s confident there are several thousand homeowners in the same boat as the Whitakers in Orange County alone, where RSI plans to build a model complex in the Santa Ana area within the next six to nine months. “We have to reach the customer and get them to believe in our message,” he says.
RSI also hopes to work more with a local investment company that specializes in teardowns that can be rezoned R-2, which allows for two houses to be placed onto one lot. “Their volume is pretty substantial,” says Boyd.
John Caulfield is a senior editor for BUILDER.