Parco Homes

All contestants:
Green Housing Technology
San Francisco, California, United States United States
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Company description

Parco Homes is reinventing the residential architecture business to create much more value for both clients and investors. Using proprietary integration and assembly techniques we combine existing best-in-class building components from commercial and residential building technologies. We offer a superior value package: innovative prefabricated green house kits that incorporate our expertise in resource efficient design and worldwide cost effective component sourcing. By selling our high-end, zero net energy houses (LEED certified by the U.S. Green Building Council), developers differentiate their offering and significantly increase returns on capital.  Because the value of these kits derives from our upfront investment in systematic design, we create powerful operating leverage and profit growth potential for our business.


Business model

The Problem

A growing segment of the consumer market is embracing environmentally efficient (“green”) technologies. Building green is popular: it can provide an advantage in land acquisition and entitlement.  Government regulations will increasingly push builders to build greener housing. While modern green homes sell faster and for more than traditional houses, few builders have invested in the designs necessary to serve this market. Neither their houses nor their production process is efficient.

 While many in the industry realize that prefabrication is the future of homebuilding, neither residential architects nor the homebuilders have the expertise to make the innovative leap to the comprehensive, more sophisticated solutions now possible.  None of the existing prefabrication products has successfully solved the full range of problems.

 The Value Proposition

Our unique, innovative green houses eliminate energy costs and offer consumers the ability to help reduce CO2 emissions.  Modern design features make our homes more livable, less costly to operate, and ecologically friendly.  When using our kits for their custom home, consumers get a higher quality house, built faster, and at a lower cost than if they built it using conventional methods.   Because our components will be configurable in many different ways, we can customize solutions for specific sites and environments - thereby maximizing value to our customers. 

For developers, our unique, high quality, green products will provide wider margins, faster build times and faster absorption. We also take away their warranty liabilities. The result is lower capital requirements and increased returns on capital with less risk. 

Business Model

Parco Homes will sell house kits based on our proprietary building components and provide project specific custom design services.  We combine sophisticated designs with international expertise in component sourcing to re-engineer not only the product, but the entire production process.  Our investment in boosting housing production productivity creates wider margins which are shared between Parco Homes and its customers. Our average margins per house range from $243,000 for premium kits in Hawaii to $43,000  for standard kits sold in California. 

By outsourcing production of kits and requiring customers to pay production costs as incurred, the company can scale up production and sales without corresponding increases in working capital.  The result is significant operating leverage, internally funded growth, and very high returns on capital.

Competitive advantage

We are targeting the high end of the market, not large tract home developments. Our competition can be divided into two categories, conventional wood frame housing and custom prefabricated housing. The first uses inferior designs and materials to achieve competitive costs in large-scale developments; the later provides higher quality design, but costs too much.

We will market the product to both end users and to developers - using open houses, trade shows, advertising, and press coverage to generate buzz and demand. Parco Homes branding will convey the key advantages of our houses:  superior design and materials, “Green” zero net energy homes, faster build time, faster absorption, and, lower building costs – locked in upfront.  For custom homes, Parco Homes will pay commissions to the developers selling lots as well as buyers’ brokers who sell our product to lot buyers.  We will also pay commissions to market facilitators who introduce our products to these influencers. 

Our system of metal frames and panels, designed for flat pack shipping and efficient assembly, is uniquely suited for our target customers. As the 1st to bring this technology to the U.S. market, Parco Homes will provide significant cost savings versus comparable quality alternatives. Besides this initial cost/quality advantage, our ongoing competitive advantage is the unique talents of our design team and our commitment to continuous improvement of our products and process to add value to client projects. Our patentable fast assembly techniques and exclusive distribution agreements provide additional advantages against our competitors’ entry into our market.