Elon Musk Once lived and may still live in a boxable casita in Texas a 50 000 home that promises to revolutionize the real estate industry and folks you know, I'm a big fan of revolutionizing real estate. In fact: I have a housing startup that would benefit from working in partnership with a company like Boxable because we were really excited about the idea of potentially having affordable homes that we could add to the backyards of properties that we own or in the future we'll own so we can increase the amount of affordable housing that exists in. America The premise of Boxable is fantastic and being not only a real estate broker, but also a licensed financial advisor, having an actively managed ETF and a real estate startup I'm a big fan of teaching people about real estate and affordable housing. However, that's where my excitement ends because unfortunately some of the things that I realized with Boxable just weren't what I thought they would be.

Now it's taken me a bit of time to put this video together because I wanted to make sure it was as transparent as possible. I Think I and our communities would benefit from partnering with companies that could manufacture affordable guest units. They would make permitting so much easier to have one consistent plan to be able to permit guest units, buy them, deliver them, build them done. It would be phenomenal.

The dream is excellent and it's necessary to help solve the housing crisis in America But unfortunately, what I ended up finding out was that Boxable is nowhere close to helping us on that mission. and that's unfortunate because I wanted to love everything about the company, but instead what I found is that one of the three co-founders one of the sons is dumping their shares in the company over five million dollars of shares of the company. The patents the company says they have they don't actually have, and the valuation of the company makes me very concerned for a product that isn't ready for prime time at all. In fact, the current version of the boxable Casita is permitted as an RV God is a home because they can't get it through permitting and that means all of the existing intellectual property they have isn't anywhere close to Prime Time and likely will never be.

That's because at every step of the process in my boxable factory tour, I was told that here's how we're doing things now. But don't worry, we're completely changing how we're doing things now and we're going to Casita version 2.0 and we're going to do it all better in the next version. Well, where is the next version? There is no next version yet. That's because even though the company spends millions of dollars a year on research and development, at one point in my interview, one of the co-founders told me the only research and development team are the three co-founders So it seems to me that the three co-founders are actually funneling research and development money right into their own Pockets because they are the R D Department Despite the fact that they are already taking hundreds of thousands of dollars in salaries and many millions of dollars in stock based compensation, that at already an extreme valuation.

Now let's understand valuation. for a moment. If you invested one million dollars into a startup valued at one million dollars, the startup would get one million dollars. And technically your cash is worth one million dollars because you invested at net asset value.

Basically, the value of the company equals cash. That's extremely rare to find a company doing that because generally the company will sell you shares at some kind of diluted value. Because the company is getting paid for having established itself as a company, it's very rare to see a one-to-one ratio in valuations. It's something that I'm doing with my startup.

But again, my startup would benefit from working with a company like Boxable. We're not in competition at all. Now here's how normally startups work. Let's say you invest a million dollars into an AI startup worth 10 million dollars.

The startup gets one million dollars and you get 10 ownership. Well, technically that 10 percent is worth one million dollars, right? It technically is worth that. But what you're really doing is you're saying ninety percent of your investment has gone to Brand value at the company and 10 percent has gone to actual cash because of that valuation. Step up.

At 10 mil. Only 10 percent is cash at the company and so therefore ninety percent of your money is going towards brand value. This is called dilution. A ten to one dilution.

This is actually extremely normal in the stock market to see stuff like this any kind of private. Equity Public Equity Dilution is extremely normal because you're paying for the existence of the company. Okay, now there's flexible. If you invest one million dollars into Boxable at the over three billion dollar valuation they have, Boxable gets one million dollars in cash, but your cash is only worth 318 dollars.

That's because you're over 99.9 diluted by the valuation that Boxable has. Now that's our opinion. You should check your math yourself on your public filings. But let's just say the owner who's just so one of the co-founders who just sold five million dollars of shares to normal investors did so at that three billion dollar valuation.

Now they say that the company has backers like a DR Horton really big institutional real estate players. But they don't tell you that those backers actually invested via Preferred and convertible shares at a valuation of around seven cents per share. And now people are paying about 77 cents per share. So in other words, that Institutional partner invested at one-tenth the valuation and was getting paid about 10 interest in Preferred shares to make that investment.

So when we look at Boxable and you listen to this interview I Want you to pay specific attention to Red Flags most of the products we believe that Boxable sources are from China Of course, Box Will tells us that they Source things from all over the place. The company also tells us that they have over 60 different patents for their technology that they're actually going to redo because it's not good enough. but that's actually not true and is borderline dare I say fraudulent when you advertise saying the company has over 60 different patents, but you don't actually say that it's actually one of the co-founders LLCs that owns all of the patents and they take one percent of all the revenue that Box Will makes. and Boxable itself has zero on its balance sheet for intellectual property.

It kind of susses me out a little bit. Boxable only had two customers in 2022 and 2021, and this year they're only selling to certain Partners who are willing to take Boxable Casitas as RVs for temporary workplace sites. That's because you can't permit them right now as they are for homes. And what's important to look at as well is how much of the property that is.

The Boxable Casita still needs to be built after it's delivered and unfolded. It's not just the finish work of drywall and baseboards, but it's also the sewer, the electrical lines, the foundation for the property, the roof, the siding and cladding. Now, some of the siding and cladding may actually be waterproof and blasted from as tested by Boxable as they say. that could be believable.

but I don't know if it would actually meet code yet and that's probably why this is being permitted as an RV Keep in mind also that when you see the factory, this is a company that says they have an over three billion dollar valuation, but has equipment on their floor of less than 10 million dollars. and in 2022, the cost to manufacture a casita was about seventy seven thousand dollars. So it's no surprise that the boxable Casita costs are going up, but that's just cost Minus cost of goods sold. The company also has operating costs, so it's going to be a while I think before they're profitable, but not just a while before their prop.

Profitable. Probably going to be quite a while before they actually have a casita that an individual could take delivery on. So I'm not very enthusiastic for a company that appears to be selling for over 167 times Revenue with a massive dilutivist expense and owners that are actually dumping shares on retail investors at this insane valuation. So I'm very skeptical.

While I think that there is hope for something like this, it is not an investment that I personally would make. Now keep in mind none of the information in this video is personalized. Invest investing advice for you and my opinions on valuation should not at all be construed as fact. Any of the information that you gather from this video regarding permitting or investing or valuation or multiples or costs should be deemed my opinion.

In other words, don't sue me bro. Do your own research. Read through the investing pieces the way I did ask their investor relations the questions that you have for Boxable and let them answer these. But I think Boxable should be transparent about all of the inventions and discussions that I just made and I actually think they are because towards the end of the video, none of this is hidden.

It's in their investor relations documents with the exception of the fact that they run ads saying that they hold patents when it doesn't look like they do. Other than that, this information is available in their documents and beyond that. It's also worth noting that in my interview with the co-founders they are willing to be transparent when asked. So I don't think they're trying to purposely hide these things I Just think nobody's actually given them a solid once over and that's what I'm doing.

We are at the home of the manufacturer of the home that Elon Musk allegedly lives in in Texas Boxable. We are here with the co-founder How did you guys get Elon to live in a box? Twitter Obviously Oh my gosh, No, actually he did find out about us through Twitter one of the channels he follows I Believe posted our video of our house unfolding back in the early days before we had a factory. We just had a few prototypes and uh, turned out he wanted to buy one so we sold him a house. Wow! so he got one of your initial prototypes essentially yeah, one of the first three uh, boxable casinos made.

um, he wanted to buy them I said I said I have three I can give you one and uh, gave him the the one of the first prototypes which we installed at SpaceX in Boca Chica Texas Wow, that's incredible. Well I'm excited to learn more about boxable. Yeah! excited to give you a tour All right. I mean we spent a lot of time like kind of scouring the Earth for all different building materials and Manufacturing methods because you know there's all different requirements for buildings all over the place and we wanted one universal solution that would like fit everywhere exceed everything so that makes sense.

Where did you guys get it all from? Like the mines out here in St George They were mining like crazy over there. yeah, um, you know, really all all over all over. Uh, and as we scale up, we're going to try to kind of vertically integrate some of that supply chain and bring more stuff in-house Do you guys want to let go mining yourself? or like putting together the laminates or the yeah I mean we laminate our own panels here. Um, but definitely you know mining raw materials I think that's in the future because because what we're trying to do the scale is so crazy that I don't think it's even possible to buy the quantities of parts we want from things.

Is it a steel frame or aluminum frame? Uh, it doesn't really have a frame? Oh on the inside, even. Uh yeah, because it's It's basically a structurally insulated panel. Oh, so it's uh, it's uh, that's your EPS yeah EPS foam. Uh, it does have a lumber frame around the perimeter, but that's not actually actually structural.

Okay, that just serves as something for us to kind of grab into with screws when we connect the panel to panel. That makes sense. Okay, yeah, got it. Okay, so so you don't need like a like on an RV which has a laminated wall panel.

You don't actually need the aluminum frames for the foam panels to sit in because it's sitting within that wood frame? basically? Yeah, we. We're kind of continuing to refine the design, but definitely you know, very different than the way people traditionally think about. you know, buildings and stuff. Excited to see it! Um yeah and you know one thing I'll mention as well is we are starting out with the Casita product.

but the company is not a tiny house company. We have kind of a Grand Vision for a building system where different sized rooms can stack and connect to build most building types. But Casita is is seemed like a good place to start and it turned out to be a good place to start. And we have this crazy interest so we're running with that right now.

So in the future for example, maybe you could get to that point where like a Lennar home builder comes to you and says hey, you guys deliver You know, six, seven, eight pods per property we want to sell They put it together, do all the finishes and build our communities like that. It's a sort of a vision that you have exactly the plan and we actually already have DR Horton which is the largest home builder in the country. Yeah! I Talked about number two. Yeah, Oh, Dr is your number one? That's awesome.

Yeah, they're an investor. They ordered 100 units and that's exactly what they want because they're basically a big contractor. They don't directly employ any of their Builders Sure, and they don't want to be in a six-month build. They don't want to have dozens of subcontractors.

They don't want to have weather delays if there was an easier way for all the work to be done before they receive any of it. They love that. So that's why they invested in this now. now.

do they sort of like get stock option after placing a big order or how does that usually work? Uh, so so they just, you know, invested. you know, cash in the company at the same terms as everyone else at the same terms There's all their keys a million dollars. Okay. And then they uh, place an order for 100 units and then they also hooked us into a bunch of other resources at their company.

like including their supply chain. Okay, so for example, we can now buy stuff at their pricing. They're the biggest builder of like cabinets toilets. so it's it's pretty good.

That's for like your bathrooms and like you said, cabinets toilets. You can yeah, buy in bulk like they do pretty much like I Didn't expect it when we first met them, but they've been extremely like helpful, bending over backwards and uh, anything we need we can call them and say hey, do you have a source for copper, wire or wood or whatever Wow and jump right. what are you guys largest like supply chain hurdles right now Uh so we were kind of Born Into the the fire because we started we started manufacturing. uh right when covet was going on there.

There's historic, you know, supply chain issues and price inflation and it was totally crazy. Uh so it was good though because we weren't like an established company. hit with that all of a sudden. Uh, we were right.

as we were ramping up and gearing up, we were like oh this is what it's like. Wow, Okay, shipping containers are 25 000 from China and uh uh. the big one for us for quite a while was the EPS foam which is like the core of of the wall and all the panels. um they you.

We were not able to get it anywhere. we were like desperate to find it. but things are changing now and the suppliers are now coming to us like Hey We're ready to sell you stuff. We have the foam available for you.

Okay, oh that's awesome. Wow. Now how do you uh, insulate them on the outside? Because obviously it's it's uh, you know you've got your what. it's like a one mil laminate on the outside.

How do you insulate those joints? Um so when you look at our wall panel and for example, like the front wall of the house, it's it's one big panel, all laminated, one piece, basically uninterrupted EPS foam through through the whole core of the wall. So that gives you you know the thermal barrier. Uh that's better than a traditional wall because the traditional wall you have like Lumber stud where energy is transmitting through the low R value of the of the lumber stud. Uh and then we're about to transition into a next-gen of the product because of the Aps of the whole product.

Oh the way you've designed sort of the wall, basically the wall. Yeah, so like what we're running with right now is the same version that you know myself. uh Paolo and Kyle the Three Founders. Yeah, Drew on a napkin.

And and guessed that before we had done anything. Got it? And luckily you know we. We've got a big Factory hired hundreds of people, a million dollars in equipment, ordered hundreds of units worth of stuff, and Luckily everything fit together and worked and the product's great. But now we have like a year of real world experience with the combined brain power of everyone here and we're kind of re-engineering it and we're going to come out with this next Gen that's going to push everything in the right direction.

as far as like Simplicity to design, streamlining manufacturing, it's going to be great. Yeah, that's awesome. Yeah, let's go take a look. Yeah, we'll go check out the factory.

uh before this I had a marijuana farm and before that I had a Bitcoin exchange business. Basically I'm just seeing opportunities, jumping on things, kind of mastering. You know all the all the info and then uh, you know doing pretty well for myself. and and this is one where I was doing that marijuana business while I started this at a certain point I just realized like this is a crazy opportunity here and I need to chase this down full time.

So I took my family and moved to Vegas to do it. Yeah, this is the the first factory. this is the first thing. Okay okay where's two.

The next building is like um right over there. We can go outside later. Oh so you have one and two here on the same block? Yeah yeah, it was pretty cool. Like the amount of Warehouse development that's going on in Vegas Sure, there was just opportunity to grab these buildings that were right next door and I was like we got to get these buildings next door.

So as we scale up, Um okay and the the grand plan is that this is actually just really a proof of concept Factory and that we need to achieve like true mass production scale to really Crush down the costs. And when you look at like you know, modern mass production, the best example is like Automobiles and and that's what we want to copy here. and that's what we think we can get to. So what? how? How are the margins right now on them? Because they're selling for what 50, 60k, 60k or something like that right now? Well, there's no margins right now.

No, you go sure because they're just ramping up. but what do you think you can get them to? I mean I think what with the well? So obviously we'll talk about with the Guantanamos y'all were I Mean think you're spending like 77k or so to build them right? So the people getting them are getting a good deal. Yeah, and and uh, since we started the costs have come down, the labor hours have come down I Don't want to jump into specific numbers, but I believe you know we will get to profitability. Uh, you know relatively soon.

Uh, right now you know we're doing a huge overhaul like I mentioned before the uh, the next Gen product. We're also putting in about 15 million dollars in manufacturing equipment. Uh, opening the second building. All that's going to come together later this year.

We're also getting better at buying stuff. sure, Um, you know, just even just increasing the size of the assembly line. It's all kind of getting massaged into place. And the idea is that we will have the lowest cost building system ever done.

and if we don't, the whole company's just didn't work and it's a failure. So sure? I Guess right here I mean uh, where? Where does Where does it start? It looks like you've got it all labeled out here. So staging raw materials in on this side or what do we got? Yeah, so this is a really important part of the factory right here. This is the kind of the lamination area where all the parts of the Wall come together into the finished wall.

do CNC route those here? Yeah, so that's a CNC I've got two other Cnc's over there and we've got more on our way for the next. Uh, the next upgrade that I mentioned. how long have you been in this uh building already? You were just over the last year you've been ramping this uh in in production here. Less than 18 months.

Oh less than 18 months? Okay, okay, and right now we produce two houses per ship, two per and you do one shift a day right now? I Imagine Yes. Okay, yeah. so uh. and then how did that compare to last year? 22.

Faster? Faster? Yeah? I don't know exactly I think if I remember looking I think you were 143 for the first six months. So closer to about one a day. Maybe somewhere on there? Yeah, that would make sense. And right now we're not really focused on going faster because what we're doing here is this is a totally new product type experimental.

There's a huge amount of unknowns, a huge amount of risk, and we have to really make sure everything's perfect before we got it before we ramp up. So you know we're going through all these changes with the manufacturing equipment and the next gen. and at a certain point we're going to say, you know what? We're ready. We've had enough real world testing Now we're going to focus on on ramping up.

and I suspect that happens towards the end of this year and we expect that we'll be able to hit 5 000 Casitas between these two buildings once we're ramped up. Wow. So 2500 each per year. Which then you're looking at Three? six? what? Seven? eight a day? Uh, per per building? Almost.

Yeah, the new Factory building is not necessarily just. it's more of an extreme version of this. So what we're doing is, we're moving things around like a lot of the shelving in here is going into the new building for holding your raw materials. Yeah, a lot of the parts manufacturing, like the Cmcs are going to the new building, Then the assembly line here is getting longer, and we're just going to kind of move things around and get more efficient.

So this might be sort of the core line so to speak. and then all the racks with the raw materials might go over there so you could forklift drive across the parking lot, pick up the parts, put them at the beginning of the line here, and go through. Yep, Yep, Yep. got it.

Really excited about that. And you know, like some of that equipment, we're getting this whole, uh, manufacturing equipment here. that's all getting swapped out with new stuff. So this is where the panels are getting laminated.

Right now. we make one wall Like, so like, for example, the front wall of the house takes about 20 minutes. Okay, and of course that's way faster than you can do it the traditional method. but once this, that's the laminated part, right? Or is it with the phone.

Uh, so that's like a fully finished wall going from this kit of Parts Okay, into a wall. That's then going to get connected to a floor or something and built into the final. and that's with your wood frame where they're connected. Basically, those are at the corners.

Got it? Got it? Yep, and then so. So right now, 20 minutes and then we'll be going to about under five minutes per panel. Wow. and yeah.

Forexing. Yeah, yeah. and uh. that will happen with that with very little human interaction throughout the process.

So we're going to speed up. We're going to cut down the labor. Basically, we're going to be dropping off pallets of wall board on this side and finish picking up finished painted panels on the other side. So it's gonna be pretty cool.

Nice. So how much equipment? I Mean this looks impressive. We've barely walked. You know how much equipment would you say you have here right now? I Think we're at about five million dollars in equipment.

Okay, and then we're doing another about 15 million. That's the the. So the next 15 is more equipment here. More equipment there as well.

And you said you're replacing some of these machines. Yeah, a whole lot of this stuff is getting swapped out, just upgrade or whatever. Yeah, and basically we got in here and said let's use the the minimum money we can spend on equipment possible. Get everything done as manual as possible so that we can make sure we are.

The process is going to stay the same before we invest in this automated stuff. And that's why you're saying hey, you've sort of just come up with the Gen 2 version. So Gen 2 When when do you think that goes into production? All this stuff is going to kind of come together. Uh, later this year so that'll be new building, new equipment next gen.

Okay, and that's going to massage everything into place. You know, Labor costs, material costs, assembly feed, all that. Really exciting. For example.

one of the changes we have is we're going from the current payload design to what we're calling a universal panel. So right now each house has maybe 12 separate panels. Okay, on each of those panels has its own separate kit of Parts Sure, what we're doing next is we're going to one panel that's cut down at a later their stage into the right size and we're able to do that with any waste. and then that dramatically reduces the the components that the number of components that go into making those panels.

Lots of different stuff like that that is going to contribute to these like really big improvements that we think we're going to see. That makes sense. Now in the front you have some of the examples and they don't have siding on them. I Know, is there any issue with like elements potentially going in the gaps for hitting that foam? Whether it's icing or rain? Uh, it's funny you ask that because we're going through our modular certification that we have to do state by state to get these approved.

and just now I got back word that we passed the water intrusion test. Okay uh so we already knew that it water wouldn't go through it. but now we have the official third-party test out that's great. Water won't go through it.

Yeah that's awesome. It's good. And then you know those units out front. We have just the stock units set up which I'll show you later and then we have some that are kind of dressed up so we have one with you know stone veneer, one some with different roof pitches.

So you can start to understand that it's more than just this little Casita product. So how many people you have right here right now? Um I think maybe like about 130. Okay, currently working uh and then probably probably another 30 or so in in the office. Nice.

um nice. So you know you can see the these these parts. these are your end panels. Yeah yeah these are the the End Lumber pieces.

um and lumber pieces with the vinyl on top? is that? Yeah and and so like you know a lot of this stuff is is changing but you can see this is um this is like that's a vinyl end piece. Yeah yeah nice. So you know a few different reasons to have this shape. um and this is engineered which is great so it's strong Lumber that you have anyway.

yeah and one of the reasons yeah one of the that's the main reason we wanted Engineered Lumber is because everything is precision cut by CNC I Mean you don't want to do this at Home Depot anymore and the other thing is it just wouldn't fit. Yeah, it needed to be like, you know it's always crooked when you go to Home Depot and pick up a two-way so that that makes sense. Yep, that's why we picked that stuff. Okay, and then you know, Uh, these end caps create just like like a shape for for the panels to lock into place.

Sure they do things like allow for gaskets in there. we have a shape where like if water was to come in here it wouldn't go up and then over and you'll kind of see that how that goes together later on. So that way the wall could almost breathe basically out of your laminate. Yeah, um and and then you know all these parts are are cut by CNC including you know, these various shapes on the EPS foam.

So you have these delivered uh from someone else then. So you order the EPS the way you need it basically. Uh, we were at first okay and then we realized we need to be cutting this ourselves because you're cutting these? Yes, yeah, we can save thousands per unit. So we just got that equipment.

it's just been being put into use recently. Wow, that's over this way. Yeah, we have the. We have the big blocks of foam.

We cut them down ourselves and then eventually we'll make the big blocks of foam as well. Wow. Wow. Okay, all right, that's very cool.

Cool. So now getting into making the foam you think will be profitable is it it? just? it seems like making the foam would be or just get the block kind of thing. But you all think there's a potential there. So there's there's two issues.

One is our plans to to grow and scale the company. We get to a point quickly where we can't even find enough. I Get it? Uh, because we're yeah, we're talking about and shipping it. That's hard too.

It's huge, So that's the second issue. EPS Foam is like 98 air and that's one of the reasons it's a great product, but also, we don't want to ship air. Uh, so we're going to ship in the beads, expand it ourselves, and that'll save us another thousand bucks per unit of materials. Wow.

Wow, That's awesome. Yeah, everything we're doing is focused on pushing down the cost without compromising on anything Nice. So nice. Okay Okay, so is it like lunch right now? because I mean there are few.

There are fewer people here right now. What do we got? 20? Maybe on the floor? There's more. There's okay. Okay, okay so this is your CNC for the laminates.

Uh, so these cut down? No these. Yeah. Um, that one over there cuts the interior wall. Oh, you're doing the vinyl attachments here.

Yeah, how are you attaching the vinyl to the wood? Just glue glue. Yeah, okay, yeah, that makes sense. Actually, it's another Improvement we're doing where we kind of realized in most cases we don't even need the vinyl. so we're taking it out of the process completely for the next gen.

Oh wow. we're just going to shape the lumber. okay, the equipment. so that'll be another cost savings.

Nice. Nice. Yeah, well, hey, less products the better. And then you don't have to glue it exactly.

Actually, this is an example where we're prototyping that idea so you can see the lumber on this cart already has those shapes in them without having to steer your channels. And that's your Machinery here that's running the channels through exactly that's going to cut down this. Um, so you know you have kind of the same shapes we saw before. Um, this is.

this is this little spot for where the rubber gaskets will get inserted in to seal the whole thing off. The smell of sawdust reminds me of my childhood because I would always sit after school in my dad's Workshop I was always saw this. You made kitchen cabinets. So what do you think of the future? You'll make your own cabinets.

It seems like you want a vertical interview. No, uh, we kind of already are. Oh wow, Oh yeah uh. Originally we went to Home Depot bought some calories.

It was like six grand per house. Yeah, it's a lot. Yeah, Then we went to China and bought our own cabinets. The price went down.

Now we've actually re-engineered all the cabinets to do two things. one reduce material and the other uh uh. speed up the assembly time. Okay, so it's going to be really amazing and like simple changes.

Like for example, if you went and bought two cabinets and you stick them together in your house, yeah, you then have a wall in this cabinet and a wall in this cabinet. Sure, but we only need one wall. Yeah. and then the back wall because you already know the design you're making.

So yeah, Exactly exactly okay. And then the back wall. Well, that's going against the wall of the house. You don't need a back wall.

Okay, um. the way the screws and the Fasteners go in, we want everything to click together really quickly. Sure. so you're always just hanging them.

Yeah, Exactly. The cost keeps going down and down on that. Uh, we're just kind of continuing to to fight against and push everything into place. That's awesome.

That's great. Yeah, because you don't use drywall in these because the inside is. is it another laminate on the inside? Yeah. So right now we have what's called magnesium oxide board on the interior wall and in the Next Generation we'll just be switching to like party board fiber cement.

Oh okay, yeah yeah. like for showers and that exactly. Yeah. okay and it gives us a whole bunch of different benefits to do it that way.

But one big one is, you know, sheetrock. If you get a flood in your house, you see Rockets damage really quickly. Sure, mold, you got to rip it out. Yeah, our houses.

if they flood, the water leaves you, dry it off and you're good. You don't have any significant damage, hence the heart. But Hardybacker is expensive. Don't tell me you're getting into the concrete business too.

Uh, you know it's funny. I have been. uh, definitely thinking about how that plays out in the term in the various companies that will need to either acquire or like really partner with really close. Yeah, because I it's been a while since I've bought sheets.

but I mean I think a sheet of drywall mold resistant was like eight bucks and Hardy was like 40 or 50 years. I mean it's up there like a sheet of plywood. Why don't you do plywood? If you look at our wall assembly. we've actually eliminated some parts.

so a traditional wall assembly you might have uh, exterior, you know, siding? uh OSB uh Lumber frame Nails insulation, sheetrock. um, maybe some plywood or whatever. Ours is just going to be concrete floor EPS concrete board. So you want to do the concrete board instead of the laminate.

Yeah, the next gen is just going to be concrete board laminated to EPS Foam laminated concrete. How thick is this Concrete board? 5 16 I think Okay, that's gonna be heavy. Yeah, it the. The total weight doesn't come in much more than where we're at now.

I'm impressed. Wow, Right now, we're at about 14 000 pounds per unit. Okay, which is dramatically less weight than a comparable sized modular home. Okay, okay, all right.

Uh, you know it's important to be lightweight for shipping costs and heavy equipment. Yeah, and so this is one of the it looks like your hinges or or where It Bolts together because I I There's half of a hinge here. Basically, so this is it. Looks like one of the wall units I'm guessing.

yeah. So actually this is kind of what we call the core of a unit. So this is a floor piece. You can see the floors.

uh and then uh, this is like a you know six eight foot section. Yeah, and then the other section is a 12 foot floor section that folds up. and yeah, this is this hinges. So what we've got here is the structural I-beam through the center of the similar to what you have here.

and the ceiling. Uh, this is just a pocket for us to stick forklifts in so we can lift up the whole house and move it around. Ah, Interesting. Okay, yeah.

okay, so these are your wider forklifts. Yeah, I've seen smaller forklifts. This is the big boy. This is the big forklift.

The whole house. Okay, um, and by the way, that's actually another part that's coming out in the next jet. What are you just gonna do? Wood on each side? We figured out a better way to lift it. Yeah, and that's that's gone because because it looks structural? Because yeah, I mean if you're just lifting it a few times, you don't need that much.

It's like twelve hundred dollars. Yeah. to just do something you're gonna do once and then and then the unit sits down and it never moves again. Um, but this is important I Mean this.

This is, uh, where you end up with a hinging eye beam. Yeah, and the hinge is stronger than the actual Ivory Oh my gosh. Yeah, yeah. yeah.

so you know all those parts come in there. They get fed into this. Uh, they get adhesive. This is your floor paneling section.

I'm assuming so the panels. the components in the panels get assembled together. They get adhesive. They go into this machine, which is a big vacuum press.

It puts like 100 000 plus pounds of pressure on while it cures. and then out come the Finish panels looking somewhat like this. and then we'll see the panel Library over there. After it comes out of here.

we roll it over there and continue the process. Got it? And right now you're doing everything's sort of going to be expected to be the same. The same. floor, the same cabinet, same bathroom, everything.

until you get a scale is the Assumption Yeah. I Mean when we started boxable I Thought maybe we would sell like a few hundred casinos. Never in a million years thought we would have a 160 000 plus people wanting these things. So we're in the fortunate position now where we don't have to do anything different.

We can just focus on this initial product, get really, really good at it, learn everything, and then in a future Factory expand to the full building system. Sure where we would not only have different Interiors but different size boxes that can stack and connect to build single families Apartments basically everything. Oh, go ahead I was gonna say and we're getting all the heavy lifting done for the Builder developer and then they're just taking these boxes, deploying them, putting some custom finishing touches on them. They can sell the upgrades then too.

Exactly exactly like for example, the neighborhood that I used to live in in Vegas we have. You know, you drive in the neighborhood, you see all these different houses, but you won't. What you won't realize right away is that they're all the same house. There's maybe two or three models in there.

Yeah, different veneers, exactly exactly the mirror image. um or whatever. Yeah, sure. and people don't need like a perfectly custom house.

And and and and then you know in return for that, blow the budget out of control and make housing unaffordable. So it's it. Sounds like it would be more efficient to start with larger customers, right? I Mean that I Think that's what you all started with right? 21 and 20? Yeah, 20 were One customer? Yeah, so uh, it's interesting and and we were fortunate to get these customers because without them it would have been really difficult to start. Well, they give you the capital to like.

Here's the large deposit to get the factory going right? Yeah, and and even things like the modular approvals that we need to deploy these to end users. We we don't have those yet. Okay, and it's taken so long. it's absolutely incredible.

It's blown my mind. and it's this regulatory process that is stopping Innovation And and we were lucky enough to find these initial customers. which by the way, one was the government right? They don't follow their own rules so they didn't need the money. Okay, so what happened? What? What would you say to the Nyt right now? Look, nobody really likes the Nyt I don't like him either.

They on me too man. I'm sorry, but you know. So uh, what happened in in the first order with Guantanamo We we shipped uh units down there and you know the crew that wasn't a boxable crew. Uh, set up a few units at a few of the units they forgot to put the roof on.

so we have what's called a TPO roofing membrane and and you're supposed to just roll it over and secure it down and they didn't do that for a few of the units it rained, some water went in, they realized that they fixed it and that was it. So that's what's pictured sort of on the Nyt cover where they show the the nailed boards around the edge with the the what looks like because instead of putting the TPO roofing membrane they just threw tarps on at the last minute to stop to stop the water. uh and the the the reporter of that article her whole job is to talk about Guantanamo Bay if you look at all her articles she's always making Guantanamo Bay look bad. oh um but but I after the article came out I messaged her and I was like hey you know you threw us under the bus and she was like she replied back to me and said I didn't mean to insinuate that it was your fault I meant to make it clear that it was their fault.

Interesting and actually if you look under one of the the pictures on there the caption of the picture it says you know workers at Guantanamo Bay incorrectly installed some of the units and it resulted in water getting in. Uh but luckily like I said the the houses are are mostly waterproof inside and the only thing that got damaged was some of the cabinets which we just swapped out and it was no big deal. So you initially delivered. What about I think 30 by the end of was it 21 and then did you finish? Or 2020 maybe? and you finished delivering last year? or are you still delivering to them? Uh, that order is delivered in full.

That's done 156 houses. So pretty pretty amazing. I Mean when we first got approached by the government, we had nothing. I had a few prototypes I didn't have this building.

Yeah, uh I brought them here before we even had the lease signed and it was an empty shell. Wow yeah. brand new empty shell and I was like guys like, you know, you understand that we've never done this before. We're not sure that we can do it.

We don't have a factory. uh you know here it is an empty building. Are you sure you want to do this and they were like yeah, let's do it and we managed to get in there. Uh, that was the government.

Yeah the government. YOLO Uh, pull the trigger on the building scale up, hire hundreds of people, turn on production of this fully experimental product. you know, order, Uh, hundreds of components from from all around the world and and pulling off and deliver in full. So I think it's it's amazing And you know the fact that we've continued to kind of, you know, execute on the vision and deliver on our promises I Think people see that when they look at the company and they see me starting off as a guy making these like you know, grandiose claims and then they're like oh, but then this happens.

Yeah and now we're here. Now we have two houses a day. Who are you? Where are the what units going to? Now it looked like uh, you were at two purchase orders in 2022. What? Where are you guys now? Uh so we ended up doing uh, just a few like onesie projects here and there but landed another order that was kind of a special order and it's for uh uh.

copper mine in Arizona The company is called uh Freeport McMoRan Uh, they're the ultimate recipient of the houses I Think they're like a a 50 billion dollar mining uh operation. they're one of their previous. Yeah, they're one of the biggest Employers in Arizona and they do copper. Mining And of course copper is needed for electric cars.

So they're growing and they need a Workforce housing solution. So we currently have units uh, shipping out to them. they're they're mid setup out in out in Arizona and so you'll have an installer Network that you refer people to. Then because you guys don't install them, you ship them.

Yeah, so what happened there was. We basically had a developer slash project manager that knew about Boxable, knew about the mines Workforce housing need, went to them and said hey guys, you should buy from Boxable We'll set it up. We'll do all the development. So our actual customers, this developer who's selling the project or who's who's doing the process completed for the for the mine.

Uh, so we're just shipping them units and they're doing the rest. Do you expect that mostly contractors will end up in your sort of sales force? You know, Uh, no matter, you know where these units go. There always needs to be someone doing the groundwork. The nature of housing is, you know their site prep required.

Yeah, for the most part I mean it's minimized with our with our product but uh yeah. I Think you know Builders developers. They're going to always kind of be the middleman. There's going to be added costs so you know the consumer wants you know to buy a casita for 60 000 for their backyard.

They're also going to need to pay for site prep permits any upgrades they want to do and so that's definitely part of the mix. What? Uh, what do you expect on average somebody else is spending for like you mentioned. uh, electrical lines Plumbing lines, water lines. uh you know Foundation Roof? whatever.

Yeah. I Think it. It varies like very dramatically based on the the end use case. Uh, for example, if you're doing a backyard unit where the sites already developed utilities are already there, you're connecting it to a main house.

Uh, it's not going to cost as much unless as if you do raw land. you got to bring in utilities from the street. Um, then there's other things like we have these certified right now as Park Model RVs with a park model. RV You don't need a foundation, right? You don't need to add any roof pitch to it.

You can almost plug it in with an extension cord. So that's like the lowest possible cost. You could take one of these right now. Uh, rent a telehandler, unfold it in your backyard, plug it in with an extension cord, hook up like a water tank, and be good to go.

But then, like you said, like an RV like you're not, it's personal property, You're not refinancing it. You're not getting a home equity line of credit or whatever. right? Yeah, yeah. Or you know you want to add in a foundation.

You want to dig a trench for real utilities. Maybe add some kind of roof pitch and get perm. It's you know, the the price kind of goes up. From there we'll see I mean it's uh, big.

Wide range of different scenarios. and for example, I'm also right now looking at uh, doing another project where we might buy an old uh mobile home park. Okay, and so the mobile home park is roughly I Think uh, eight hundred thousand dollars for a hundred spaces. They're all ready to go.

so you know, round up. Maybe we end up at 10 grand per space? Sure. And then you come and you connect the boxable Casitas in. There's not many more costs than that, so you know the Box will see the 60, maybe 70, 80, 90 something around there.

so you're going to be your all-in cost for that. And then when you talk about like a 30-year mortgage on 100 Grand, you know it gets to the point where this is a very low cost housing solution. As far as a monthly price, do you think that might be the direction you ultimately go? Where you can where you go get DMV registration rather than let's say housing registration. So we did that but only kind of as a reaction to the time it took us to get the modular cert.

So as the the government order was was getting closer to be finished I'm like oh we don't have modular cert we can't sell to anyone. how else can I get these approved I went out and certified us for Park Model RV We have Rbia that inspects our Factory and and approves them as as as RVs yeah and that kind of brings them more into the realm of like mobile home type type vehicles. and then there's lacks rules and regulations surrounding that and it's just another Avenue for the customer. and hopefully we'll have every Avenue for the customer covered.

So one day we'll have Park Model RV We'll have modular. Maybe we'll maybe we'll be able to get them approved through a panelized uh certification at the local level. Maybe we'll even do the Hub manufactured housing as well. So how long do you think until maybe somebody like a retail customer is looking at I can get a permit on this in my backyard I Think that we might be a few months away from Arizona State modular certification for the RV style? then no for a modular for regular customers.

Okay, and at that point we can actually sell to customers. Right now, the only way we can sell the customers is the Park model RV which isn't ideal. So once we get that modular cert, we can start shipping to end users. Then we'll quickly do uh California Nevada as well.

Sure, Uh, Unfortunately, it is a state by state thing. I Don't know why you know other products don't have to do a state by state approval and it's it's not. It's not good, but a big part of what Boxable is doing also is going to be fighting back and trying to change these regulations and also showcasing a project. A product that that doesn't need these regulations right? Well, because if you get to California they might turn around and go.

You need fire sprinklers? There's a whole new system that has to be put in, right? Oh, there's going to be stuff like that for sure. Okay, so okay. we'll work through it all. Yeah, yeah.

I mean that's part of the process. so what's Um, so right now it's really, hey, where can you get the temporary use cases like the mine? Maybe where they're good with? here's our industrial temporary power grid or whatever. Plug them in. That's sort of what you all thinking, right? Yeah, yeah.

and you know we're fortunate to have these two big customers that allowed us to run really fast and do this. but without those customers I don't know where we would be because we might be in a situation where we have this whole factory set up and we can't sell a single house. Yeah, and that could be the situation for like another competitor that was trying to start up unless they found these really special customers like Guantanamo Bay Cuba or uh, a huge you know copper mine that they would be sitting on their hands for over a year trying to get their buildings uh, modular certified. Wow.

so uh, what's what's back here but in this gray box? Yeah, let's keep going. That's it. So and where do you do all the research? I mean for like, the next Gen product YouTube you're ready to stop I Swear to God oh that's awesome YouTube Google Calling people asking weird questions. that's kind of what it's been the whole time and then testing stuff for real testing.

Okay, got it. Yeah, and you test that I imagine so it gets a little slippery here guys. So yeah, panels come out of the lamination system here and then we bring them up right here. where we kind of have a panel Library So you'll see the different uh panel, um, images there and and then what we're doing is uh, painting and sanding to get rid of the Interior seam and then we do some electrical work as well.

You're doing that with like drywall mud. but these are drywall my pants. Yeah, so you'll see like this is a panel. This is a panel as it comes out of the lamination machine.

Yeah, minus the electric? Sure. So what we want to do is get rid of like the seams between the wall board. yeah, um, and where we're actually trying to work on better solutions for that for the next gen, that's more more automated. Uh.

but right now, yeah, it's just drywall mud. And are you trying to finish it? Smooth with this? Yeah, you'll see how they look down here after they get some paint on them. Okay, so drywall mud, then paint and the paint. Blends It all in basically so so the end user doesn't know if they're touching this or drywall mud.

Yeah, Okay, okay. you know you can feel also like like how solid these are like you're not, you're not getting through them and this is the laminated you mentioned the Magnesium or whatever, right? It's also about another like yeah, it's very similar. It's very similar to Hardy Hardy's fiber cement board and then of course EPS foam in the in the core. uh and then you can see stuff like the electrical so there's a network Behind the Walls sure and that makes um, install of electrical easier in our Factory and uh, modifications easier in the field.

So and then I imagine you would just sort of train your existing employees on the electrical or whatever you don't like have need an electrician to come in to do that? Very important. Point Uh, we do not have skilled labor in our Factory Okay, we can take anyone off the street and just train them as a technician to do a do a job. Okay, and that's the only way you're going to be able to actually push push the cost down. Of course, if you can use just you know, regular Labor uh to do something for as part of mass production.

All right, huh? So is it mostly you and your dad who do the research or who all does the research so is uh me, uh Paulo my dad and Kyle Denman uh the three of us you know you guys together do the research. Yeah, we worked on it. um Paulo and Kyle are you know Engineers They're experts in like 3D modeling on the computer so Kyle has drawn up all of this in in great detail in the 3D model. Wow! And then we'll have meetings where we'll go back and forth.

We're finding the design and dialing it in. Um, you know, constantly trying to change things, improve them. Um and then I Imagine obviously you get a patent the like This new Casita design right? I Mean because you're giving all the tours, it's like I feel like you're like here's what we do. You know, how are you guys gonna protect it? Yeah, you know a lot of companies are like scared to show their stuff and I think it kind of holds you back from opportunities.

We have over 60 patent filings. Wow! On all the various stuff that we do here, Boxable has 16 patent filings, smokes, and uh, beyond that, there's a certain amount of barrier to entry just in the sheer amount of money you would need to do something like this. Uh, you know the the permitting like I said and then also what hasn't been filed yet? what hasn't been done yet? So we're actually having the pipeline right? Exactly? If someone comes in here and copies everything we do, they're already a year behind is what you're saying. Yeah, all of this is no good.

We already figured a way better way to do it all. Wow. So we'll be implementing all that and and that's uh. you're gonna sort of remake this facility here into the Gen 2 as you're ready to implement it.

Yeah, I Mean basically for the rest of this year we're going to be changing everything here, installing all this equipment. Um, you know, after that panel elimination line, we have a whole new paint system That's basically a tunnel where these panels come right out of the lamination system and get fed right through a tunnel and get painted automatically. And you know. And then we have, uh, the assembly line here where the payments go together.

You have a conveyor system, you've got the uh, the houses will sit on and they'll move automatically to the station. in the future. the conveyors upgrades that are going on I See Yeah, you can see how they end up getting getting painted here. So like there, they've mudded, they've mudded the seams.

Yeah, no, it's pretty good. Yeah, I mean you can't really tell I mean it just. I Mean a house has seams and then you can sometimes tell where the drywall is too so looks good. Cool.

Okay, and this is how you stack them up to hinge them together. Yeah, and just just be just careful around here. Be aware that there is stuff like hanging from cranes and stuff. so just please walk carefully in this area.

Um, huh. These are your mini splits. Yep, so this is your inside unit for your mini split. Exactly.

And And so that way you guys can install The Minis and then the outside units on a shelf. probably somewhere like getting outside. Yeah, the mini splits are great. energy efficient.

but I put mini spots ever. So I Love those things. Okay, so I mean you only really need one mini split for these? Oh, it's totally overpowered. Yeah, and then what? What's the tonnage on those suckers? What about? Um I You did a demo of a two-story How do you do a staircase in A in A? So actually the project we're doing for the workforce housing right now.

those are all two-story units, but they're separate. Apartments So they have an external therapist. Got it? Got it? And then that's a builder show. We connected three units together.

It was a two-story It's gonna show like one single house and that had an internal spiral stair. Okay, uh, we could do regular stairs. You just cut it out of the floor though. Yeah, it's really good.

Yeah, but but for demo unit for for these smaller units, it's kind of a waste of space to put in a really big staircase. But down the line when we have our bigger units because these are 20 by 20. but we'll go 20 by 30, 20 by 40, 20 by 60.. you think you can get these out wide and still get them in a container? basically? Well, so they'll all be 20 and that folds up to eight and a half.

But then on the length, we can keep going. Sure, and then on the bigger side of that, like a 60 by 1200 square feet in one room. Yeah, in most use cases, you're never going to need a room that big and you'll end up subdividing it so that makes sense. Um, but yeah.

So here's kind of where this assembly line starts and you have, uh, you know, these various stations where the the same task is being done on the different units. Uh, every time. So the guys are, you know, really good at it. We keep dialing in the process, we make sure the right tools are there.

Um, these are your backless cabs? No, they have bags. These are still their current version of cabs. This is like a middle generation. We have another Gen in the in the pipeline coming in.

Um, but you can see like these are kind of getting pre-assembled and then they'll be bolted in there pretty quickly. Um, another thing worth mentioning is that uh, this is what we call the core of the unit. So that's where all the all the magic happens in this section of the unit. and that's the part of the house that is not folded up.

This is where you guys are also water testing now. And yeah, they're doing for the PEX pump they're doing. They're doing testing and everything. And of course another advantage of factory production is the quality control level that you can have the Precision Yeah, ordinarily you just get a building inspector.

Plumbing works right? That's so you could actually test it here. Good? Yeah I mean the level of quality you could see in a factory using like CNC to cut is is on another planet. Then what is going to happen on on the site? Yeah, um yeah. I Agree with you.

and and you know at the end of the day our our pitch is you know, site construction is not sustainable. It's not scalable. You know you're never going to be able to achieve the amount of housing needed by doing it that way. It has to be done on an assembly line because assembly lines are proven to rapidly produce products at the lowest possible cost and that possible.

It was just about solving the problems that have stopped housing from working on the assembly line. of course. of course that's you know, shipping is the big one. and then there's a lot of other stuff because you do have manufactured homes that exist.

Yeah, but they just haven't gotten competitive with the shipping I think is your Edge that you're talking about? Yeah, so you have about 10 of the market that is actually Factory built housing. They've really kind of gotten stuck in stuck to gain market share and you'd assume that if it was better they would take over because they'd have a lower cost product right between the fact that they are shipping these wide loads which are incredibly expensive and that limits the size and scale of the factory because then they have a limited shipping radius. Uh, they're also just using the traditional methods. There's no innovation on the building materials.

Obviously, we have all different building materials they're just using Lumber frame. but doing it inside makes sense? Yeah, yeah. Okay, all right. anything else to see this way? Yeah, yeah.

um. another example of something we're doing ourselves is the shower. So you'll see in here. Uh, the shower's got the boxable logo on it.

so that's a fiberglass enclosure there. Oh, and then you guys, how did you get the custom boxable logo? Yeah, so so we didn't find a great solution I Want a custom logo in my shower? Yeah, right. Sorry, you were going to say you found a yeah, It's another example of us, you know, taking things in-house We didn't find any great Solutions out there and we said let's just engineer our own and we'll get a bunch of different advantages by doing it that way. Can I go in here? Oh thank you? huh? Yeah, that's awesome.

So you actually okay, this is your your vent right? Because you don't have a ducted mini split. It's just this is your exhaust vent. Yeah I Understand Okay, and then you're making fiberglass panels in house or how did you or did you you're doing The Impressions trying to shower from China But it's our design. Okay, Oh okay, you guys designed it I Understand I Understand Okay, yeah, okay, certain stuff.

It makes sense to build to actually manufacture ourselves. Sure, um, but a lot of stuff we need to design ourselves. And how do you end up finishing? like just with like a molding or something like that, the plumbing between them or because I know obviously there's bass missing here and the trim mold and that is. we'll see him in the next one deal.

Okay, all right, that's the best way to explain it. It's prettier. Yeah, we'll go look at it. Oh, and your your water heater is actually in the kitchen? Yeah, you know I wanted to use like a like a tankless, but they're expensive.

The power demands. That was the real issue really. So if you have a accessory dwelling unit yeah, then you're still working off the power that's already on existing on the house. So 200 amps or whatever.

Sure, and I didn't want to go and then have a really big Power demand and bump over that number and then it requires new power to run from the street and increase the cost. So that's how you're trying to keep that down. Okay, yeah, but now. okay.

um. Alternatively, if somebody did run another line then they could go Tangles or they just had enough power, you know? Okay, um. but right now this option is going to come with the 130 or whatever it is. Yeah, and we did, uh, all electric as well.

You know we could have done gas and that would have followed that issue as well. Wait, do would there be a cooktop? Yeah, yeah. We'll see. We'll see that in that.

Okay, all right. or in the demo unit out front. Okay, this is actually the Big. The big floor.

Oh uh. Interesting. Wait, So you're your? your water heater is actually behind the range. So you're not going to do a built-in range because you didn't do the countertop all the way.

Actually, we have to move it because the modular certs. Uh, based on the code. Yeah, it can't be there. You can't block the water heater.

You need access to