By the end of 2011, Blu Homes, the Waltham, Mass.–based modular-home manufacturer, should be starting production at its second factory, a 250,000-square-foot former submarine plant on Mare Island in Vallejo, Calif.
Bill Haney, Blu’s founder and CEO, says this facility at full capacity will pump out more than 500 home modules per year. And it would seem that Blu can’t get this factory open fast enough to meet demand, which Haney says will increase his company’s revenue this year by 400% to around $7 million, and is expected to drive revenue up by another 200% to 400% in 2012.
The company, founded in 2007, currently operates a 150,000-square-foot factory in East Longmeadow, Mass. Last May, Blu Homes disclosed that it had raised $12.5 million from private investors, bringing total investments since 2007 to $25 million.
Haney says his optimism about future business—at a time when home sales in general have been on pace this year to be their lowest in 14 years, and when national modular home sales have been, at best, flat—is based on purchase orders and an aggressive marketing campaign that last year generated one billion ad impressions for Blu and its products. As a result, 20,000 prospective customers wrote the company about their interest in owning one of its houses.
The national brand it has established is one of three “differentiators” that Haney says separate Blu Homes from other modular manufacturers. The second is its application of technology that includes Blu’s proprietary 3D Configurator, which allows builders and home buyers to work with the company’s architects online to customize their homes and get a fixed price for free. Next year, customers will be able to do this without an architect’s assistance, says Haney.
The third differentiator is the building science that informs Blu’s manufacturing. Blu constructs its modules with structural steel framing, which Haney says “provides us with a tremendous range of benefits,” not the least being that Blu can more easily make homes for different climatic and seismic conditions. This kind of construction also allows Blu to produce homes with open floor plans whose widths extend to 34 feet and that incorporate 13- to 16-foot-high ceilings.
Unlike some modular manufacturers that still have contractors do a lot of the completion work in the field, Blu’s factory installs all of its modules’ electrical and plumbing (including sprinkler systems), windows, doors, flooring, HVAC, appliances, countertops, and bathroom fixtures. The factory also takes care of obtaining building permits and conducting inspections.
By doing most of the construction in the factory, Blu can drop its modules and have a house ready for move-in within seven days, on average. Compressing the time it takes to finish a house has been a big factor in Blu Homes being able to control construction costs and keep its prices competitive. (Blu Homes’ houses sell for between $100,000 and $500,000.)