American Housing Corporation wants to cut on-site labor by 95% and deliver fixed-price row homes nationwide

Great to have you. Big uh big week in your world.

Yes, I saw I mean, fantastic roll out. I saw so many censored logos and I was building a lot of intrigue and when I saw the final word removed, it was very clear what was going on. But why don't you introduce yourself and the company? Uh, I'm Bobby Fia and I'm one of the co-founders of the American Housing Corporation and we're building row homes designed for young families all across the country, God willing.

Amazing. And what's uh what's the approach? I imagine that you want to do things faster, cheaper, improve some aspect of the building process. Do you want to build them in a factory? Do you want to use 3D printing? Like do you want to use traditional uh uh building tools and materials? What are you thinking?

Definitely not anything typical. No, we are a we're a vertically integrated which is obviously like a a magic word today but we are a a manufacturer, a general contractor and a real estate development company which we think is the only way you can actually tackle the problem. So I mean you've obvious seen our our beautiful stuff and I think the only way we can do that is in a factory which we have in Austin. So we have a big team and that's what they're doing now. So we're building the machines that build the panels that build the parts that build the houses and those houses are going to go everywhere. And uh just for those who don't know, what what's the history of a row home? What's the definition of a row home? What's what what's special and what's standardized about that?

Row home, row house, town home, townhouse. They're all kind of the same thing and yet I think they just give different ideas of it. We use row home and row house because I think it has the it has the closest definition to the communal aspect of what we want to build. Again, we I I think the uh the central um shame about cities is that people move to places, San Francisco, New York, Washington DC, elsewhere in order to join new companies, start new companies, um to go to school. Um and the shame is that if and when they choose they want to have kids, they leave. And so we're building for people in that exact um time frame,

have kids and stay.

Yeah.

Uh what uh the the verticalization makes sense. talk about the actual process of building timelines, how you're speeding that up.

Yeah.

Well, I'd say um a lot of that can be described better by some of my by by my co-founder Riley, who is the brilliant engineer on this point. Um I'd say

how it actually like translates um as the company is that we can build and reduce um in the field uh labor hours on site by 95%. And that's the thing we can already do. I'd say the innovation as it applies to the real estate field is that that manufacturing with the press and our panels with everything being done in the factory which will eventually be more automated means that we can deliver those pieces for a fixed price um across the country. And the problem with real estate right now is that construction in a typical manner is more expensive in some areas than other places. And that's because it is so labor reliant. So in San Francisco for example, it costs a lot more than it than it does in Houston. And so with our method, it can be the same.

Who's on the team and how'd you meet?

I met Riley through Twitter um and through my co-founder, Gimily Land, right? Wills, who I think a lot of other people know. He's been out there um shilling for this thing a long time. So, we all got connected um a little more than or I guess just about two years ago all around the idea of Riley um was I'd say intent on the on using industrial manufacturing to build like awesome homes. I was intent on the fact of tackling this very particular demographic problem of saying I know from a supply side, I know from investment side, this product ought to exist and it doesn't exist because the costs just aren't done right and will uh just wants there to be more housing in America. and he's a brilliant engineer. So, I'd say that's how we got connected, the three of us. Harris joined two and the four of us have been building this company together for the last 18 months

unofficially. Officially, I think about 16. And um

we uh we finished our first house.

Yeah. So, how how many and and what's the goal for this year? What like how do you think about uh scaling?

The biggest part of scaling this year is like moving from the factor they're in now into the factor in later. So, um, our current facility can do, um, about 40 homes a year.

Mhm.

Um, and the next one will be able to do a thousand. So, that's we're adding team members before. That's what we are, um, fundraising for is to scale from this current factory where we are, I'd say, already sold out of different projects that we're going to build into the next one. And honestly, kind of after the last few days, I uh I don't think we'll have I don't think we'll have more capacity than what we can already build for uh 26 and 27 either. So, God willing, you know, I don't know, hundreds or maybe a thousand next year. Uh dozens this year.

Yeah. What does the financing on a new build look like? I imagine you have to build it before you actually get paid by a buyer and they get a loan. But

but if you can decrease the timeline, you're you're paying less interest on a construction loan. There's like

Yeah. Yeah.

How deep do you want me to explain that?

Super deep. Go as deep as you want.

Super deep. All right. I'd say okay. So if you look at the indiv So like like some different like vertically integrated companies nowadays like we are we are what's called like an opco prop code, right? So there is the operating company which is for our inventure investors and where the technology goes in order to reduce the cost by you know 90 95%. And then there is the propco where we have investors who are investing like traditionally into individual real estate projects and and the combination of those two different things makes things work. So I'd say on the individual deal level you're going to have typically you know um construction debt at you know 65 to 70% and then real estate equity. And I'd say from the get-go, one thing that makes our company different is that we want or not we want all of our projects are going to pencil to our real estate investors. Um because I fundamentally our company is a vehicle through which very large institutional capital can deploy into real estate in building a product that's needed.

Mhm. Uh what lessons have you taken from history, other attempts at uh you know uh obviously you know you're not the first person to try to fix housing. Obviously we need a lot more people. Uh what have you learned from kind of previous ventureback startups that have made different attempts uh at kind of manufacturing homes and speeding up this process?

I'd say the biggest one is being vertically integrated. there are not that many who have done that before and there also not that many who have also done it with the um with the discipline of using real estate capital from the beginning.

So um that is the uh that that is the biggest differentiating factor of course like there is there is individual technology that is that we have a slight twist on but ultimately um we are a company who wants to build like a really great product and the only way that can be done is with vertical integration. other people have made the error of um building something, but then they have to sell it essentially to an intermediary like a real estate developer who wants things differently here than they do there. And that

you're asking like a third party, you're asking a third party to take on a ton of risk that they may not be comfortable with like let's say like a builder and saying, "Hey, instead of doing things the way you've always done them, why don't you do them this why don't you do it this new way?" And so I think yeah, own, you know, owning the risk all the way through uh makes a lot of sense. Well, I I the other part I think that's important in that is like it people need to understand like the actual asset or investment class of what real estate is. Like real estate is very very good at deploying a large amount of money into inflation adjusted like inflation risk adjusted returns, right? Like you fix your debt and then if there's inflation, the rents are going to go up.

Mhm.

Um venture capital is obviously trying to take a small amount of money and making a lot. Um no one would waste their time raising a $20 million real estate fund. Um, but people raise $20 million seed and preede funds all the time, but real estate is about investing tens of billions of dollars.

Yeah.

Last question. Just want to make sure you fully understand. Are you planning to sell the end uh the end the end product or is these more for uh the rental market leasing them out?

The golden rule, right? The person with the gold mix rules. [laughter] I would say um both. The answer is both. fundamentally like we want to build homes so that people can own them because I think that's how um they are most uh connected to

communities and they can build equity to that but um it is also the case that um real estate capital wants to build and own long-term assets. So in the short term all of our stuff is going to be for sale because since we are doing manufacturing and installing and development we don't also want to do property management and fixing toilets.

Sure.

Um makes sense.

Yeah, makes sense.

Yeah, you you've been off a lot. That makes a ton of sense. Well, very exciting. Congratulations on the progress.

Yeah, great to meet. Very uh great launch and uh yeah, everything you've