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OFF-MARKET PRESENTLY
ADU (Alternative Dwelling Unit) Construction / Factory / Consulting
San Jose, CA – (Santa Clara County)
The thought leader in the space is seeking to become a fully vertically integrated ADU manufacturing plant to capture margin efficiencies at all levels. Presently working with a non-profit that is working on a Purchase Order in the range of ~ 600 units at $170k per unit, the time is now to secure a supportive capital partner that can help the Company scale. $1-$5MM target check size(s), a gradual milestone was driven release is OK, willing to let go of majority stake for the right partner also.
We’ve approached the market with the philosophy that there should be a single resource that handles everything and uses prefab solutions to make the process more predictable, faster and cheaper. We have been working on this for the last 13 years and feel we have spent enough time working out the details on what people want, what works for within the cities rules and what prefab solutions are a good fit. Why now: Affordable housing is one of the most talked about topic in the state of California. Simply put, we don’t have enough and there are very few solutions out there that don’t require significant costs for infrastructure while getting the approval from the community. ADU’s are a rare solution to housing since they do not require any state funding, new infrastructure and homeowners build them on their own properties. The demand is growing and we are already considered to be the most knowledgeable resource for ADU’s in the state.
Our strategy is based on an in-depth study of the market of the last 13 years working as an ADU builder. Standardized plans that are built using some form of prefab construction reduces design and construction time which in turn contains costs. On average we see that our solutions are 18%-28% lower than the conventional method of hiring an architect and then bidding out the project to several contractors. Also by engaging the client with a more affordable design solution we establish a relationship the ensures they will build with us. We currently maintain an active design backlog of 40-50 projects with 2025 active builds going on at any given time. This is with no real marketing other than our Google AdWords campaign which is limited to the local area and roughly $200/month. We have been on a growth pattern of over 100% annually for the last 3 years. We expect this to continue as we partner with organizations looking to provide financial solutions and cities willing to use our solutions as “pre-approved” designs to speed up the approval process.
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This company is positioned to be a leader in this fast-evolving ADU market within California. Considered as a knowledgeable resource actively building ADU’s by organizations such as the Bay Area Council, Turner Research Center of UC Berkeley, Portland State University, Housing Trust Silicon Valley, Santa Clara County Association of Realtors and so many others.
The company will continue to expand operations, improve ADU market growth thru local and state legislative efforts while improving product offerings while looking to expand into other markets.
is company has been working on this for the last 13 years and has spent enough time working out the details on what people want, what works for within the cities rules and what prefab solutions are a good fit.
In the Bay Area alone there are more than 750,000 properties that meet the minimum qualifications for an ADU. Last year applications were up almost 1000% according to a recent San Jose Mercury news article. LA and San Diego represent similarly sized markets Portland and Seattle are smaller markets but have also introduced legislation to ease ADU builds so they are very active as well.
Competition falls into two categories for the company. Contractors and other factories. Contractors are very interested in building ADU’s but usually lack the internal expertise to assist the client with the whole process. They prefer to get involved once the plans are done and approved. They also don’t have any real experience with prefab. This company usually does not compete because they offer a full turnkey solution and the prefab options make customers feel more comfortable with the process. The company also has more experience with over 120 units built and an active project list of 20-25 units.
Factories have also expressed interest in ADU’s but when we look at their ability to build them, the cost is often higher than expected as the unit sizes go down. The reason is that these large factories have such high overhead that the cost to run the production line is greater than the value of the smaller units. They also do not spend any money on marketing since they rely on their dealers to market and interface with the customer.
Initially, the company is offering a panelized solution for nine plans internally. Panels will consist of framed walls with windows and exterior plywood and roof system. The smaller production facility is geared to deliver this product at the right price point. As the company works thru state certification introduction of a new product that sits between the basic panel package and a Modular home. This product will consist of the same base panels that also have the plumbing, electrical, insulation and sheetrock installed.
Experience shows that these panel solutions work for all locations where the Modular solutions are limited to roughly 25% of the projects we have built over the years due to limited access to the rear yard. The company is working towards delivering a full Modular solution over the next few years to round out the solution offerings.
OFF-MARKET-ADU (Alternative Dwelling Unit) Construction / Factory / Consulting
