Most people think it’s natural to see a new home constructed from scratch on its own lot. But not Paolo Tiramani, chief executive of modular home manufacturer Boxabl in North Las Vegas.
“It would be like ordering a car and a bunch of guys show up with steel panels and welders and say, ‘Where’s the garage? I’m going to put this together for you,’” Tiramani said. “It’s absurd. We put up with it (for homes) because buildings are big and they’ve been hard to put in a factory.”
Tiramani and his team at Boxabl say they’ve figured out how to construct homes in a factory setting by taking a cue from the auto industry — mass-producing homes on an assembly line. And they’ve started production on the homes, dubbed “casitas,” this week.
The four-year-old startup has an order from the Department of Defense for 156 units, an order it plans to fulfill by March 2022. The company said it would then tackle its wait list of more than 50,000 while also accepting more orders from the public.
Modular homes have been around for decades but turning it into a profitable business can be challenging. Look no further than SoftBank-backed startup Katerra Inc., founded by former Tesla Interim CEO Michael Marks; It tried to prefabricate buildings but filed for bankruptcy in June after raising more than $2 billion.
Tiramani admits the company faces some headwinds and the biggest one will be achieving enough scale to be a long-term business.
“It takes a lot of cash. It takes a lot of development,” he said. “As soon as we’re live and we get the factory to around 70 to 80 percent efficiency, we know what the costs of goods are, the overhead, everything — then we can scale.”
Neil Opfer, associate professor at UNLV, said Boxabl also will be competing with major builders.
“What you can’t do in a factory is you can’t do the foundation,” said Opfer. “Then there’s things like utilities, streets, a curb, driveway — obviously you can’t really prefab any of that. And one of the things you’re competing against when you decide to go modular is that you’re competing against the big merchant builders like Tri Pointe Homes and Lennar.”
And he noted any downturn in the housing market — as well as any fluctuations in consumer sentiment toward a pre-made home — could affect a company such as Boxabl.
“If things crash, you’re sitting there with an expensive factory with a whole bunch of automated equipment, or you don’t have enough demand. That’s also been one of the problems,” he said of the downturn risk.
Ready to ship
Boxabl’s casitas are about 400 square feet and cost just under $50,000.
The studio-style home has a nearly 10-foot ceiling with several large windows, two separate entrances and includes finishes such as a full-size stainless-steel refrigerator, a washer and dryer combo and HVAC.
The 20-by-20-foot casitas can be folded into a box and easily shipped worldwide or hitched to the back of a large pickup truck. Each can be set up in about an hour.
Tiramani also said the casita’s materials are more durable and energy efficient than traditional buildings, adding that it is mold, fire and water resistant. Boxabl also created its own standard of building codes.
“There’s the modular code, the HUD code, the trailer code — we don’t think any of them are good enough frankly,” said Tiramani. “We’ll be looking to build a federal level, Boxabl standard, which gives folks the codes they deserve in terms of strength, resistance, zero-net energy and insulation. There’s a whole new bunch of things that we can improve upon.”
He said the company has received numerous inquiries from organizations and companies interested in using its casitas for workforce housing, homeless and partnering with developers. Interest also is out there for using it during a natural disaster.
“Right now what happens is FEMA puts down trailer homes or they put down tents and they sort of build slums and they fall apart,” said Tiramani. “With Boxabl, they can put down Boxabl units that might be for a family just to take shelter. They would have a hot shower, have security because they can lock the door and when the disaster is over those Boxabls can be picked up and repurposed into small homes.”
Boxabl plans to create two additional sizes, 20 by 30 and 20 by 40, and allow for clients to be able to connect or even stack multiple casitas together.
‘That’s a mess…’
Boxabl got its start in 2017 and introduced its third-generation prototype at the International Builders’ Show in Las Vegas in 2019 and again in 2020.
Tiramani, whose background is in industrial and mechanical engineering, said he wanted to start a company that could “do some good” and that housing offered the most opportunity. He’s also founded intellectual property firm 500 Group and automotive company Supercar System.
“It was very statistical the way that we approached it, and we looked at housing and said, ‘Man, that’s a mess,’” he said.
Boxabl was previously operating out of a facility at the Las Vegas Motor Speedway before moving into its current 170,000-square-foot headquarters late July.
It has a team of 145 employees, though Tiramani expects to have 350 workers once the facility is fully operational. The company anticipates being able to build a casita every 90 minutes.
Boxabl already has its assembly line in place with machinery that includes large robot arms for making the walls of its units. Flags hang from the ceiling identifying each step in the building process, though Tiramani said that’s more for visitors. The company hopes to start doing public tours of its facility soon.
Seeking to raise more funds
Tiramani self-funded the company though it’s since taken on outside investment, including through crowdfunding platform StartEngine.
“I’m hoping we can probably raise around $100 million by the end of this year, and we’re probably at least a third of the way,” he said.
While the company is not yet profitable, Tiramani is unfazed, citing the large demand it has already received locally and internationally.
For example, Elon Musk is reportedly living in a Boxabl unit in Boca Chica, Texas, which he tweeted about renting from his company SpaceX in June. Tiramani would not comment, though the company did post a video last year announcing it would be building a unit for a “top secret” customer in Boca Chica.
He said that while profit is important, Boxabl’s current focus is growing the business and manufacturing a product that can help resolve issues are affordable housing.
“What the tiny homes, the container homes are an answer to is an absolutely desperate need for people to keep money in their pockets and have a sense of freedom,” Tiramani said. “If they’re spending all their money on housing it’s crushing. So if we can keep more money in their pocket it’s really (giving) freedom and also mobility.”