In this edition, we’re excited to share insights from our recent visit to a Champion Homes manufacturing plant in Northern Indiana.  Champion is a leader in the manufactured housing industry with over 40 facilities throughout North America.  They build a wide array of manufactured homes which owners across the country purchase and install in their communities. At this particular plant, we learned that they build almost 10 homes per day!

With an upcoming MHC acquisition, we plan to enhance the community by infilling 20+ new homes to occupy the vacant lots. As part of our strategy, we visited this local plant to gain a deeper understanding of the intricacies of home construction and the types of materials used and available.

At the MHI conference earlier in the year, we connected with one of their Midwest salesmen who promised to give us a tour of the manufacturing process from start to finish. It was remarkable to see the resemblance of these homes to traditional stick-built homes…

Before our tour began, the sales team helped educate us on how the process of building a manufactured home begins with extensive design and planning. Community owners and prospective homeowners are given many customization options, from floor plans to finishes. Once selections are made, the engineers and architects create detailed blueprints to ensure all preferences are incorporated and the home meets building HUD codes and standards.

The tour began with the floor construction phase, where we saw workers building the steel chassis, providing a sturdy foundation for the home. Currently, HUD requires manufactured homes to be constructed on a permanent chassis.

We were impressed with the skilled labor at the plant and learned that many earn $40-$50+/hour.

Next, the flooring system was added to the steel chassis, which includes a solid wood frame below subflooring made from plywood or OSB, insulation for energy efficiency, and various floor covering options like carpet, vinyl, or hardwood as specified by the customer. Plumbing lines are also installed at this stage, and the floor is prepped for the attachment of walls.

Next, we moved along to the wall assembly phase. We observed walls being constructed with precision, ensuring consistency and quality. This phase included framing with wood or metal studs, installing insulation for thermal efficiency and noise reduction, routing electrical wiring, attaching drywall, and applying exterior sheathing to enhance structural integrity and weather resistance. Once assembled, the walls were then lifted by cranes and securely fastened to the floor system, ensuring stability.

The roof construction phase follows, which was built separately from the main structure to ensure structural soundness. This process includes assembling trusses for the roof’s framework, installing decking, adding insulation for energy efficiency, applying roofing materials like shingles or metal roofing, and ensuring watertight joints with flashing and sealing. The completed roof was then lifted into place and securely attached to the walls.

Next, we moved to the Interior finishing phase which transformed the basic structure into a livable home. It includes connecting plumbing and electrical systems to fixtures and appliances, installing HVAC systems for heating, ventilation, and air conditioning, hanging and finishing interior walls, installing cabinets and countertops in kitchens and bathrooms, laying final floor coverings, and installing fixtures and fittings like lights, sinks, and toilets.

Finally, onto the exterior finishing phase to ensure the home is protected from weather and is visually appealing. This includes installing siding materials such as vinyl, wood, or metal, precisely fitting windows and doors for energy efficiency and security, adding exterior trim around windows, doors, and roof edges for a polished look, and conducting quality inspections throughout the process to ensure adherence to building codes and standards.

Throughout this entire process, we observed that homes underwent multiple inspections at various stages. This ensures compliance with HUD standards, covering all aspects of construction and safety, and maintains high quality and durability through regular inspections and tests. Once the home passes all inspections, it is prepared for transport to the home site, where it will be securely installed.

Conclusion

Manufactured homes offer numerous advantages over traditional site-built homes, including lower construction costs, faster build times, and consistent quality due to efficient factory processes and regular inspections. They are environmentally friendly, customizable and versatile, and can be placed in various locations. Additionally, they provide specialized financing options and comparable insurance rates, making them an accessible and practical housing choice. Because of these reasons, we believe manufactured housing will continue to play a vital part in making homeownership affordable for millions of Americans.  We were very impressed with the assembly line operation and the resulting quality during our tour. We are excited to finalize our order and integrate these homes into our community.

Stay tuned for future editions where we’ll explore more aspects of real estate investing. As always, feel free to reach out with any questions.

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Greenside Gazette

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^{What Might Chassis Removal Mean for the Market? - MHInsider}

When the U.S. Department of Housing and Urban Development receives Congressional approval to change the definition of manufactured housing and unveils its changes to the HUD Code, it likely will exclude the requirement that a manufactured home is constructed on a permanent chassis. The key phrases here are “requirement” and “permanent”.

“Despite their efficiency advantage, manufactured homes face discriminatory barriers to fair competition with site-built construction,” Andrew Justus and Alex Armlovich asserted in a February 2024 piece published by the Federation of American Scientists. “Many state laws and local zoning codes restrict or exclude manufactured homes, often based on architectural features common only on manufactured homes, like the Congressionally-mandated permanent chassis.”

Source: https://mhinsider.com/permanent-chassis-removal-hud-code/

Birdie Basics

HUD Code: A set of construction and safety standards that manufactured homes must comply with, established by the U.S. Department of Housing and Urban Development (HUD).

Chassis: The steel frame upon which a manufactured home is built, providing structural support.

Thank you for reading and for your interest in Gary Group Capital. We look forward to having you follow along. Feel free to reach out anytime with questions and connect with us further using the button below.

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