Earlier this week, someone reached out to me with what sounded like a solid, well-intentioned idea. He wanted to create a small community of ADU-style homes to be used as affordable housing. His question was simple and direct: Which factory should I buy from?
I told him the truth. I don’t recommend one factory over another. What I do instead is help people understand how to vet any factory they talk to—questions to ask, red flags to watch for, and expectations to set early. He appreciated that, but as the conversation went on, something else started to bother me.
If he thought choosing a factory was the most important part of the process, the project would probably fail—and fail quickly. Not because factories aren’t important, but because there are a dozen other questions that have to be answered long before you ever ask a factory for pricing.
That realization is what prompted this article.
Because too many ADU community ideas don’t die at the factory level. They die way before that.
Let’s start at the beginning—where most people should.
The first question isn’t about homes. It’s about land.
Do you already own the land, or are you still shopping for it? And if you’re shopping, are you looking at more than just price per acre? Location matters more than most spreadsheets will ever show. How close is the site to public transportation? Are utilities already available, or will extensions kill your budget before the first footing is poured? What about hospitals, schools, grocery stores, and basic services?
Affordable housing that’s isolated from everything else isn’t affordable for the people who have to live there.
Once you’ve found what you believe is the “right” site, congratulations—you’re still just getting started.
Now comes the part most people want to skip: the paperwork and the planning.
Have you created a real business plan? Not a napkin sketch, not a pitch deck full of buzzwords, but an actual business plan that explains how this community gets built, financed, operated, and maintained. Have you run a cash flow analysis? A proforma that shows what this project looks like over time, not just on opening day?
If you haven’t done those things, investors won’t touch it. And no, your Aunt Peggy’s goodwill check doesn’t count as capitalization—though bless her for offering.
At the same time, you need to be deep into zoning and code research. What does local zoning allow on that property right now? What does it not allow? Are ADUs permitted as-of-right, conditional, or not at all? What building codes apply, and are there local amendments that complicate modular or offsite construction? Is there enough remaining utility capacity for water, sewer, and power, or will upgrades be required?
Miss any one of those answers, and the project can stall for months—or die quietly in a planning office.
This is also where many ADU communities either gain traction or hit a wall: the PUD.
A PUD—Planned Unit Development—is a zoning tool that allows a community to be approved as a single, unified project rather than lot by lot. It gives municipalities flexibility in exchange for a comprehensive master plan. That flexibility can include varied housing types, shared infrastructure, adjusted setbacks, and higher densities—if it’s negotiated correctly.
For ADU communities, a PUD can be the difference between endless variances and a clear, enforceable path forward. But it doesn’t happen automatically. It has to be proposed, reviewed, approved, and locked in—before homes are ordered and schedules are promised.
Only after all of this—land, location, planning, financing, zoning, utilities, and approvals—does it make sense to seriously engage modular factories.
And even then, you’re not “shopping for the cheapest box.” You’re looking for a factory that understands your codes, your approval pathway, your production volumes, your delivery constraints, and your long-term goals. That’s a very different conversation than “How much is an ADU?”
If you do all of these things—all of them—you just might succeed. And if you do succeed and decide to build a second ADU community, here’s the part no one likes to hear:
You don’t get to skip the checklist next time.
Every site is different. Every jurisdiction is different. Every approval process has its own personality. The checklist doesn’t get shorter because you survived the first one. It gets more important.
Factories build homes. Developers build communities.
Confusing the two is where a lot of good ideas quietly disappear.
Gary Fleisher—known throughout the industry as The Modcoach—has been immersed in offsite and modular construction for over three decades. Beyond writing, he advises companies across the offsite ecosystem, offering practical marketing insight and strategic guidance grounded in real-world factory, builder, and market experience.
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