Episode 14 - Frank Vafaee and Zach Toering, Proto Homes

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Prefab Review

OK, hey, everyone, my name is Michael Frank, and welcome to the first live prefab meet-up. Thanks for hanging with us and the fact that our team here screwed up the link invite and hopefully that's the only thing we mess up tonight. But we're really glad you joined us. We have two amazing speakers tonight. We have the people from Proto Homes and the people from Clever Homes both here to tell you a bit about their company and answer questions you all have. My name is Michael Frank. I'm the founder of a company called Prefab Review. Some of you may be very experienced at the prefab and modular building thing. A few years ago, I had some experience as a real estate investor, but none with this space. And it's been a very educational ride. But I think there are some really amazing things about the industry, particularly if you happen to live in an area that is as expensive as the Bay Area or Southern California. So we're really excited you joined us. The way this is going to work is we're going to do a quick Q&A with the founders from Proto here, I'm going to kind of do my best to represent you all and the hundreds of thousands of people I sort of interact with on a monthly basis via our website, PrefabReview.Com. And then we're going to get a small quick presentation from Proto Homes, where they're going to run us through the process of actually what it's like to work with them. And then we're going to hopefully have like ten minutes for you to ask all your questions. And don't worry about any questions being too dumb or not dumb enough. I mean not smart enough because that's sort of part of this. And again, I've done a lot of these projects at this point, and I learn new things every day about permitting and HOAs and all sorts of silly stuff. So with that being said, I want to introduce the guys from Proto. So we have two people here. I don't know them very well, so I hopefully won't butcher their names. We have Frank Vafaee, who is the CEO and chairman of Proto and Zach Toering, who is the director of business development. How's it going, guys?

Proto Homes

It's going well. Thanks for having us.

Prefab Review

So you're in southern California?

Proto Homes

We're in downtown Los Angeles, if you know the downtown area, we are right next to the convention center.

Prefab Review

Great.

Proto Homes

And I guess I got someone, I got to get a cheer.

Prefab Review

Once again, as you have questions that come up, ask them in the chat, but we'll ask them towards the end. So hopefully that'll work. All right. With that being said, can you guys start by just telling me a little bit about what makes you, you? There's obviously, as you can see on our site, hundreds and hundreds of companies that do some variation of sort of not 100 percent site built construction and design. Where did you sort of see an opportunity in the market or a place to do things better?

Proto Homes

So I'll start. I'll let Frank chime in as well. But we're pretty unique in the space in that we aren't technically modular. We fall into the prefab umbrella but our system and what we call system built is really component driven. And so we do panelization for framing. We do systems for the foundation. We also do components for your infrastructure, for your electrical, plumbing systems, everything like that. So our technology is pretty unique. And it's not just the physical components that go to the job site, but there's an interconnected network of databases. We have a Proto app, which I can go through a little bit that ties the builders that we work with to our systems so they can directly communicate with us and bring up issues. And it gives the homeowner the final product insight into how the home is being built along the way, as well as access to the permitting and designs. And with that, there's really a comprehensive system that is foundation all the way to the exterior cladding and finish of the home while still allowing flexibility. So we end up in this hybrid space where we have some of the flexibility to the traditional home builders, or a custom home builder that will do whatever you want, total flexibility. But really, it's kind of a chaotic environment. And then we take some predictability from the modular and factory mentality and mix that in so you get predictability and flexibility.

Prefab Review

Got it. And yeah, so what's your background? How did you see this opportunity?

Proto Homes

Well, my background in architecture and construction, and so I started Proto Homes about almost 10 years ago, and this is right right after the, you know, the big crash. And before that, I used to develop, you know, big fancy homes on the west side in Griffith Park, Palisades and Riveros. And we used to build the biggest homes and we used to sell for anywhere between $7 - $10 million to about $15 - $20 million. And these are products that were sold and got our fiscal house back in time any day of the week. But at the same time, I used to do a small development on the side, crofter and also in Culver City, as you would never make money, it would make these 2,000 square foot homes and will spend almost the same amount of time, almost about a year or so. And at the end of the day, you make $40,000 or $20,000. But we made a killing on these bigger homes in the better neighborhood. And we could never figure out why it is that we make so much money on these bigger projects that we don't make money on the smaller projects. And it turns out that it's really the same exact construction technology actually used by the same set of subcontractors, same company, same two by fours. But the issue was that construction, the way it's practiced, is really calibrated for the high end of the market because it's very inefficient and only you can recover that inefficiency. You can't afford it only in the expensive neighborhoods, in neighborhoods that purchase the home. It's very emotional. It's not that there's no market driven service. So I started thinking, how can we calibrate the construction for the middle of the market or for the lower end of the market that it's feasible to build and to sell and get to build? It could make money. So that was the impetus to start the company back in 2010. And then we looked at various options. We are new to it. And thinking about the best methodology is compartmentalization, because the building industry, you know, has really gone on that trend. Basically, the natural trajectory of evolution and construction has been component innovation. If you look at it, we didn't have prefabricated fireplaces 30 years or 40 years ago. We didn't have windows not too long ago or prefabricated cabinets or pre-hung doors. So construction in general loves standardization, construction of these prefabricated components that we can pick up and just install however, most of the components to the local construction industry. They are what we call, you know, the generic component, the adaptive component, so they can fit many products in many markets. You don't get that much efficiency out of the components if it's adapted that once you make that component, you know, sort of specific or, you know, integrated, then you get efficiency. That's why cars, they use integrated components. So, you know, certain components from one manufacturer, wouldn't fit the other.

Prefab Review

So we see different versions of this componentization pretty regularly in Prefab. Right. We see some people who just make the shells, some people who are like prefabricated kits. What are the parts that are sort of integral to you componentizing or sort of systematizing before you get to site?

Proto Homes

We look at design all the way to delivery, all the way to post occupancy and we see that as one big continuum. So we do the design and we design everything algorithmically with the same components that we build. We don't design intuitively. So we have our own design in which we have the same components that we send to the site. And it starts with Zach and then goes all the way to post occupancy and delivery system and manufacturing. So there's a technology that runs through the whole entire process that will be totally integrated. So our delivery method is really completely useless for a typical construction because we categorize components and the construction process completely different than standards are, you know, 16, 20 division systems that, you know, everyone uses Are completely useless for somebody else. It's really meant to work with our framing. Our framing is completely useless for somebody else because it's meant to work with our foundations. Our rebars are completely useless for somebody else, because it's meant to work with our foundation system. All the way to the cladding system that we use all the way to the infrastructure and, you know, the way we take care of post occupancy. So when we say it's fully integrated and we call our technology integrated component base construction technology, it's because we integrate the entire process, all aspects of it, into one big continuum, basically.

Proto Homes

So I would say the one thing that Frank's touching on there is we're not a set of floor plans or kits that you call up and order plan C4 or whatever it is. Right. When you come to us, you're going to basically present your site and your wish list, what you're looking to build and what we can do in a completely original floor plan for that site. So that's one of the differences that we're the whole process from design to post occupancy is integrated. As far as physical components, we're sending foundational elements framing elements, infrastructure, exterior cladding. We allow the interior to be very flexible. So we're not limiting you to an interior package in any way. You're going to design that to your heart's content.

Prefab Review

Why don't we? So this is really interesting. And it's cool that, as I said, we see all different forms of this. And it sounds particularly in an area like L.A. with very, varied terrain, you know, it sounds like you guys have a lot of flexibility within your system. And you just tell me next slide, maybe we can start to run through the process of building with Proto Home. Then I can sort of follow up with some questions, if that sounds OK. Everyone can see my screen?

Proto Homes

The only problem is this is not going to show the animations. There is an animation of one slide. We can either run through it with this or I can try to pull it up on my own.

Prefab Review

But let's let's see how it goes.

Proto Homes

So this first slide is kind of, we've already touched on this, is our building technology and where we kind of fit between traditional stick built meaning a custom home builder measuring, cutting on site, figuring out things as you go. And on the right you have what we call volumetrics modular, which would be sort of your shipping container size units you know, 90 percent finished at the factory. The only thing you're doing on site is putting a foundation. In fact, you make components being brought in. So traditional gives you total flexibility. Generally, people will complain about lack of predictability. Right. There's going to be change orders. You're kind of figuring things out on the go. You're wasting a lot of lumber because you're cutting things, you're making errors on site, but total flexibility. When you get with modular approaches, it's sort of the other end of this. You get total predictability where they'll say, yeah, we're going to build these floor plans in this many months and we'll deliver on this date. But you're probably selecting from a limited number of floor plans and you don't have total flexibility. They may say here's our standard interior package or our luxury interior package or something like that. So kind of two ends of the spectrum. And when the team was looking at where Proto can fit in, what's the benefit of going with the componentized approach is that you can have the flexibility of traditional construction with the predictability of a factory controlled environment like modular. So this animation that we can't play in the center, what this is, is available on our website, which is Protohomes.com, this is going to show you a sequence of components going to the site. Right. Just in time delivery. Foundational elements - we're sending rebar, we're sending concrete, we're sending formwork, things like that. Then we're going to send out panels for your walls, the structure of the home and framing and lumber is going out in four flat panels. It creates a structure. Then you're going to see the module for your infrastructure, electrical, plumbing, everything like that go out dropped into place. And then we're going to wrap that building and we're going to put a cladding on the outside, exterior lighting, everything like that. On the inside. It's what we call southern rough-in. And at that point, it's able to be finished out again however you want as far as fixtures, finishes, appliances and things like that. So, again, flexibility is traditional with the predictability of modular. The other benefit of our system with components is we go through the same permitting inspections as a traditional home. When you go to sell a Proto home, there's nothing on it. There's no sticker saying it's prefab. As far as financing is concerned. Title is concerned, insurance is concerned. It's a traditionally built home. So that's a big deal for homeowners.

Prefab Review

So two questions about that and that's great. So does that mean that like when these get shipped, are they flat packed or do they look more like shipping containers going down?

Proto Homes

Well, some of the infrastructural items are volumetric. And then, you know, the rest of the stuff is pretty flat.

Prefab Review

And then one other question about the financing stuff. And by the way, I was going to say not to get too dorky about this, but the goal of this, by the way, everyone, is to get very dorky about this stuff. So one of the things that we see, which is interesting. And y interesting, I mean not that fun about the modular space is the draw schedules tend to be a bit different for modular providers. And for those who aren't aware, it's basically because they need more money before the wood hits the soil or whatever the correct way of saying that is. Does that mean when you were talking about traditional financing, does that mean that you are, are you still more like a modular company in that respect, in terms of schedules and stuff like that?Or would you be able to just use a standard like, Bank of America style loan?

Proto Homes

Traditional. We have flexibility to decide on how we structure it, but we follow traditional draw schedule. So any construction loan, if you want to work with a different lender, we've worked with a few different lenders, but if the client has a financing already lined up, just put them in touch with us. Will explain our system how it's treated as traditional and we can follow that same construction draw schedule.

Prefab Review

Got it. I think that's actually really helpful because there's a sort of a smaller subset that can do the modular draw schedule. Do you want me to keep going here?

Proto Homes

Yeah. So I thought we'd just sort of walk through the general process, focus on one specific project that's been completed. So this is going to be what we call the Proto Alvord, which is a project in Redondo Beach and I'll sort of talk about this project specifically. But it's going to be how you work with Proto Homes in general. So let's jump into the next slide. I sort of touched on it when I was speaking earlier, but you get started with Proto, the way you get started, we call it a Proto pass, which is sort of the initial design phase. You come to us with a site and you come to us with a wish list. So this image here just kind of shows, you know, we do some zoning research on setbacks and buildable area. And then we'd have you complete a wish list, which is just what it sounds like. It's how many square feet, bedrooms, bathrooms, what kind of layout do you want? You want to do a home and an accessory dwelling unit, sort of exactly what you want. On the right here is another animation. It's not playing right now. But this is going to scroll through a bunch of our previous floor plans and we're actually setting this up so you can access some of this through our app as well. But this would cycle through dozens and dozens of plans you don't have to select any floor plan. But when we start with most plans right now, we start with a blank slate where we're really saying, what's the requirements and possibilities on the site? What are your must haves? What do you want to build? Right. And therefore, we're finding the overlap in that and create an original floor plan that meets those needs. If you go to the next slide, you'll see the floor plan that was created for the Alvord project. So this client came to us. This is what they came up with. This is level one on the left and level two on the right, two storey a little over three thousand square feet, not including the garage. One interesting design element is they have a detached, not quite ADU. It doesn't have a kitchenette, but basically a suite with a bedroom and bathroom in the courtyard area. So this is what we come up with at the end of that process, right. The floor plan, it's two dimensional. It's going to give you the layout, square footage. We're going to lay out the bathroom half-bath, three quarter, this is four bedrooms, three and a half baths. So we get that sort of mapped out right. And the client says, "I like this. I want to move forward." We then go under contract and go into what we call design development. And the way to think about that is we take you from a two dimensional element and we move it up into three dimensions and start figuring out all the details. And one of the things Proto is always trying to do is figure out things up front so there's no changes down the road. What we come up with in our design development is what our factory is going to produce, it's what the team on site is going to assemble. So we want to figure out all the details up front. Getting to this floor plan is about a two week process. And if you go to the next slide for me, Michael, the design development is usually about four weeks. So what that means is we're going into three dimensions, right? We're going to figure out what's the layout, the cores, and then we're going to do the exterior cladding. So this is the rendering of the home where we're showing the cladding materials in place. The client is going to pick different colors. And I'll show you some options at the end of this.

Prefab Review

Do you mind if I ask a couple follow up questions on a slide?

Proto Homes

Absolutely.

Prefab Review

Which looks beautiful. So, yes, a couple of things that I noticed here that I had questions. One of the things you see a lot with the volumetric companies, right, is you see a lot of things that are 14 and 15 feet wide. This looks comparably on almost every dimension, much wider than that. So does that mean that this would be panelized instead of one that was volumetric modular?

Proto Homes

Everything we do is a panelized approach. The most module-like aspect we have is our infrastructure units, the cores, because everything else is panelized and flexible, so we're doing multi-unit projects. We're a unit, maybe only 15 to 16 feet wide but we can rotate the house to be 60 feet and basically if the lot can handle it.

Prefab Review

And then on the garage, so we've seen some panelized people who also say, like let the local builders do the garage side. Are you analyzing the garages as well?

Proto Homes

The garage is structure. It's part of the home. We can do attached or detached. A lot of time for space efficiency, attached is preferred, but it's part of our scope.

Prefab Review

Thanks for clearing that up.

Proto Homes

So to finish that slide, so we're finishing out the details and then is you have the permit set so we're going to create those architectural pages, aside from hearing your title 24 calculations, and help put that permit set together to submit to the city again goes through the same permitting as any traditional built house. We expect that to be, you know, the design and development about four weeks and then we usually start about two to three months for permitting. It's going to go through their corrections and make corrections to our structure. No charge. They've all, every jurisdiction we work with has seen our system. We use the same technology every time, same approach, each time they're familiar with it. I will say with the current coronavirus issue, that time lines are maybe a little bit stretched because it's a little bit more difficult process. But we look to move through quickly, get corrections back and get those final steps back to them.

Prefab Review

But so just to be clear and our audience is doing a great job of asking questions. So we'll cover a lot of your questions, everyone. Do you guys are able to consistently do two to three month time period on permitting?

Proto Homes

This project was, I think, a week over three months. So that three months is pretty typical. We've come in on the low end, closer to two months, and then sometimes it can be a little longer. You know, again, we go through the process of standard building materials. One thing is we're process driven. We're not changing what the house is filled with. We're changing how it's built. So and not just built, designed, submitted to permitting. Everything is a whole integrative process. We do it over and over. So we're not trying to figure things out. We're just applying our system to your design and your site.

Prefab Review

Right, Cool. And so that's really great, honestly, because we've experienced some projects that have gone that well at most that I've seen take a lot longer, which is great that you guys have this sort of more down to a science. In terms of the permitting, are you actually managing and taking care of that process with the local jurisdiction or who is managing that situation?

Proto Homes

So we cover projects throughout the state of California, in the Los Angeles area, we can provide more assistance and work with the clients on the building safety permit for homes or, you know, in a home and ADU. For bigger projects, where there's a little more complexity, we have outside architect partners that we'll bring in to work with us. And obviously, once you're outside the Los Angeles area, we don't consider ourselves experts. We've built in San Francisco and Santa Rosa. But when we're in a jurisdiction where we don't have dozens of projects completed, we'd always bring in an outside architect to assist with permitting. The only other scenario where we bring in an outside in Los Angeles is if you're in coastal commission or circle preservation overlay on HPOZ, then that's going to be a little bit of extra work and we'll typically bring in an outside partner. And anything that doesn't sort of fall under our umbrella, we always are, you know, we have a pretty solid network in our ecosystem that we can reach out to and help get over hurdles.

Prefab Review

Are you guys technically California architects or do you just work with outside ones.

Proto Homes

California.

Prefab Review

I mean, I know that you're able to get to permit stuff through just being California engineers, but some of the tonier areas that we've done projects and we've seen, you know, they require architects to stamp stuff and stuff like that. Cool. Yeah. Let's let's keep moving.

Proto Homes

So this next slide, this is giving you a little bit about what components are provided. So what's going to happen is there's going to be a partner contractor working on the project, whether it is in Los Angeles or up north out of our sort of backyard that's going to go in and prepare the site. So demolition of an existing home, grading, excavating, preparing for our components to be delivered. Once those are delivered, the first thing that's going to go out are the foundation and our standard foundation slab on grade. We're going to send those materials out to the site. And what you have there in the first picture on the left is a foundation being put into place where it's laying out the layout of the home as well as the sill plates, we're then going to send out panels for the structure of the home. So this shows you some panels stacked and ready to go out on a truck sort of flat shipping, as you mentioned, Michael. Everything's numbered, labeled. Our app has the instructions set built into it, which I'll touch on a moment. Everything's sort of dummy-proofed and connected. It's an image of a Core. So this is a Proto core in the sky. This is one of the few elements that, at least in the past, you need a little bit more equipment to put into place. These are large, two story, infrastructure units that have your utility connections HVAC, electrical, plumbing, all the systems of the home, water heater, everything like that in one location. Right. So that streamlines the process of building the home and that we can drop that in and do a lot of that skilled labor, electrical, plumbing at our factory rather than on site trying to coordinate things, finish in the factory, send it out and make the connections on site. From a homeowner or landlord perspective, it makes maintenance easier. It has an external door so you can access it without going through the tenant space, gets your water heater, gets your electrical panel items like that. We also keep most of the infrastructure and utility connections above the foundation, minimizing what we're running through that slab on grade so that if a pipe breaks, it's easier to address than having to dig up your foundation. And then on the right, you have an image of what I mentioned earlier, sort of studs and rough-in, the unfinished interior. And at that phase we move to the outside, which I'll talk about in a moment, and then your partner, general contractor, would come in and start working on the interior. And so I think the next slide is little snippets of the Proto Homes App. So the Proto Homes app, as we mention this is something that you get involved with from the beginning of the process, both as a builder, developer or the homeowner. So these are some shots of what kind of information you have. You have access to 3D models of the home and that model we can drill down to every individual component. Builders have the ability to schedule deliveries. You have a helpdesk. So either as a builder or as a homeowner later post occupancy, you have access to all these permit documents, all the steps that went through to assemble your home. And you can shoot Proto a message and say, hey, I have an issue with this or you're the builder, I am a little confused on what unit this is, but as I mentioned, you say numbers on all the components. They also have QR codes. So the app has a built-In scanner where a builder can basically just scan a package that was delivered to them and it'll list items in the package where that goes, what phase of the project that's required. And so this is kind of like a project manager in your pocket. You have access to all the information for the home and the homeowner can watch as the process goes along, as photos are taken and notes are put in and builders can contact us and have all the access. The scenario that comes up a lot as the inspector shows up and you realize you left the pertinent documents which you're supposed to require to have on site. You left those at home or you left them at another site. No problem. Pull up the phone, pull it up on the iPad, show the permit documents. And he says, I need a copy of an email, a PDF. So this is more, again, more than just physical components. You can't think of it just as physical components, but you have to think about it as an integrated technology. Again, ICBC integrated component-based construction from the beginning of the process of a blank empty lot to a finished home. OK, so then part of that app is being used to coordinate phases of the project. And this is a key phase. This is going to the exterior cladding. So I showed you a picture of Alvord. These are more shots of the Alvord project. On the outside, we use three cladding materials, our primary materials of PVC, which here is white. We use sort of the gray flat, which we call accent cladding, which is typically aluminum and uses corrugated steel. So these are all multi decade warranty items. Easily replaced if they're damaged, they're basically a rain screen. So creating a gap between that cladding and the Tyvek wrap that we protect the home with is for weatherproofing and waterproofing and moisture barrier. Very long life, easy maintenance. Nothing here needs to be painted. It comes with the colors you select and you basically just power wash to rinse it off. So form and function, quick process to assemble, but also long lived quality.On the inside, as I mentioned, that contractor partner, while our team is working on the outside or your cladding work on the outside, comes back and does the interior. So the next slide shows some of the interior. Again, you know, it's a platform personalization. You're not limited at all on what you do on the interior finishes of this home. You're going to give us the details of what you want to make sure there's enough wiring and boxes and everything, all the connection points to where they need to be. But how you finish it is completely up to you. It's not selecting an interior package. These are shots of the actual Alvord project.

Prefab Review

Are you prefabricating any of this offsite or is this all done onsite?

Proto Homes

The interior is primarily done as a standard finish. Right. So any general contractor or can contractor come in. You're going to do insulation, drywall fixtures and appliances just like they would in any other home. We do include some of the items. So we include an LED low voltage wiring, lighting system, recessed lighting, pancake lights that are really easy to place in different locations. That's included. But for the most part, the interior is left up to the client.

Prefab Review

In the chat, there's about 37 questions about price, but that means this part is probably going to be priced similar to a standard site built home?

Proto Homes

Yeah, your site work and your interior finishes are no different than a traditional built project, really on the cost range for the finishes is somewhere between $35 - $60 per square foot, depending on the type of finishes and, you know, the quality. But that's pretty much the range for inside finishes. That's insulation, drywall, paint, kitchen cabinets, you know, appliances. So then I'll jump back to Alvord but just before I just want to show the next slide has different looks for the home. So all the homes we do are a modern aesthetic, modern home, built in a modern way. But we do have different looks. So this slide shows some other completed projects, just to give you an idea of different looks you can do with the cladding, it's always going to be a flat roof. It's always going to be those right angles. Everything is done for a purpose. I can get into this whole spiel about the roof and waterproofing we used and how it's ready for solar and everything like that. But I won't get into it. There is a diversity of options in the approach you take. Right. And you can select different colors, different layouts. Again, original plan for your site and then the next slide again, all we're doing is kind of that canvas for the interior. These are all different projects' interiors. So you have a lot of options on how you go. You'll see one of the things that comes up in a lot of our projects is double height spaces, what we will call hyperspace. So that's kind of like a balloon or hybrid balloon framing where you have big entryways or common living spaces with double height ceilings and you bring in a lot of light with these double height windows. So total flexibility on the interior. And I'm showing you an Alvord. But I wanted to let people know that there's a lot of options in which direction you can take the interior finish as well as the aesthetic on the outside. And I'll tell you, since you said there's thirty seven questions on pricing, I will just follow up on my last slide. I think here I said in the last is just another shot of the Alvord project. So this project was completed. The price per square foot, including all the nuts and bolts, financing, his site work, and I will tell you that this project ran into a little bit of difficulty because it's hard to make up in the shop, but there's some slope to this site. So you can actually kind of see the driveway has some slope. that ended up having a retaining wall in the back. So prepping the site became a little bit more complex than maybe what we would advise a standard client, but they built for under a total of $300 per square foot. Right. So our components typically and assembly of our components in the Los Angeles area as a comparison are usually about $170 per square foot. So that design services, that architectural phase, structural engineering, title 24, that's components on the site. And that's assembled on site for our phase. Foundation, framing, infrastructure, cladding.

Prefab Review

Sorry. So you're saying they were able to do the foundation and finish the home for $130 a square foot.

Proto Homes

Yeah, exactly, yeah, so $170 for our scope and then doing the site work and the interior finishes about another $130, to end up around $300 per square foot. But this came in I think around $275 per square foot. But as we would usually give the guidance of around $300 a square foot and how that breaks out does shift a little, if you're say up in the Bay Area, we've done projects up there primarily we're still doing the design services, but we're also going to work with a local contractor for assembly and completing the project.

Prefab Review

Where was it?

Proto Homes

This is in Redondo Beach. So this house actually sold in the last year for $1.85 million. And again, if you look at the listing, there was nothing, it talked about Proto and that had this awesome infrastructure core. And it's a green house and it's ready for this and that. But it didn't say prefab because as far as permitting inspections, financing, title is concerned it's a traditionally built home.

Prefab Review

So it comped comparable to new construction or whatever?

Proto Homes

Exactly. Exactly.

Prefab Review

For perspective, three hundred dollars a square foot is definitely incredibly competitive of what we see for most, sort of middle to high end builders in your area of the world. So that's very good. I'm sure there's more to talk about. There's a lot of questions from our very engaged audience. So I'm going to throw a couple out here. Everyone, if we don't get to your question just because we have Toby coming up next, I have a feeling that if you're pretty interested in this, you can certainly email the people from Proto, and I'm sure they'll be happy to get back to you. Or send us an email at Prefab Review. And, you know, we can try to be helpful as well. All right. So I'm just looking at a couple of these. So we talked a little bit about costs already. It sounds like you think typically $170ish for your design and fabrication and on-site install and like, what do you say, $130ish, which again, is really, really good. Do you have a network of builders who you work with in at least Southern California already?

Proto Homes

We have yeah, we have partners in the Los Angeles area and we also have partners in the Bay Area and we're expanding that network. Now, we have a couple in San Diego that are kind of in the early stages of projects down there. So, again, the thing with you know, if there's general contractors, you know, watching today is we're using standard building materials. We offer training both through the app. The app is always there in your pocket ready to help. And we can also jump on calls or make a site visit if it comes down to it to give you more guidance and make sure you're on it step. But it's all standard building materials. The same story. General contractors, builders, developers come in and are skeptical, thinking we're using a 3-D printer or have some sort of weird glue we're putting houses together with. They walk the factory and they say, wait a minute, this is all the same material you would see on a standard job site. Brand name. We're changing the process. That's what we're changing, not the materials that go into so much.

Prefab Review

And then in terms of how you price the homes, when someone goes under contract with you, are you providing a price for the whole project or is it sort of for the stuff that you're doing and then?

Proto Homes

It would be on our scope. So what happens is that ProtoPass that comes up with a two dimensional floor plan that's going to set the contract for us. Right. That's going to determine how many square feet it is if they're doing any real big modifications or special requirements they have. And then that allows us to come up with a contract price. That contract price would just be for our scope. We're not a site general contractor. We're not going to do the interiors. So generally when we come up with that floor plan, then we can take the client to take that floor plan to the contractor and say, please give me a bid on this at this site and they can go visit the site and figure out those two other big components, the site cost and interior finishes.

Prefab Review

Looks like we have a few people who are interested in building outside of the Bay Area or L.A. So basically, how far does your geography stretch in terms of places you either have or are willing to do projects?

Proto Homes

We have built in Los Angeles, the whole metro area - Burbank, Pasadena, down to Beach City, South Bay, we've done San Francisco proper, city of San Francisco and Santa Rosa. So wine country. Yeah. And we have so that we're willing to cover the whole state of California. In the Los Angeles area, usually we can include shipping there for shipping way up somewhere remote, we can do it, but that is going to be an additional cost for us to look at. We have very good access. We don't need special access equipment. Sometimes other prefab spaces will say, well, there's power lines or if it's a windy day or it's a windy road, we can't get to it. Generally, given the nature of our component's system, we can get it there. But in the past, it's mainly been in the Bay Area and the Los Angeles area.

Prefab Review

So two questions. I mean, site feasibility is something we get asked questions about a lot. So do you still need to get a crane to the sites to install or are there alternative methods for doing that? And yeah, what do you evaluate in terms of someone saying, I own a piece of land or, I'm thinking about owning a piece of land. What's the sort of quick checklist for site feasibility?

Proto Homes

The first thing we usually tell people is pretty flat. We get a lot of people looking to do hillsides. You see hillside land for sale cheap. And the issue is that the cost is hidden. To get that to be a buildable site is going to take some work. So again, our standard foundation is slab on grade. We can work with other foundation types and we're doing a project on the podium. But generally a flat site is the best starting point. They've probably already had a home on it or has one to be demolished, and you have maybe a better indication utilities are in place and it's a buildable site. Other than that, we have a lot of flexibility. So an oddly shaped lot or maybe a lot on the smaller size, you know, zoning issues to get through. But our system could be adapted to it.

Prefab Review

That's awesome. Well, I want to be respectful of your time. Thank you so much, guys. It's been awesome learning a bit about Proto. And yeah, this has been great and hopefully we'll have a chance to learn more.

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