Has anyone reviewed S2A modular? Just doing my diligence

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Has anyone reviewed S2A modular? Just doing my diligence

Mark Caudill
Investor · Elizabeth, CO · Member since 2016 · 32 posts · 29 votes

There is a new green modular company out of hemet, ca. S2A Modular Went thru their presentation yesterday. Just wanted to see if anyone else has looked into them. Supposedly they can build a custom or one of their predesigned floor plans with tesla powerwall, graphene solar panels for a "net-zero" or "net-positive" house for $165 a sq ft. First units out by 2021.

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Artur Madej
Investor · Orlando, FL · Member since 2016 · 6 posts · 36 votes
6y

Please do your DD carefully. There are many companies out there offering similar solutions and ideas. I almost invested in a near identical scenario in Orlando a few years back. I listened to this particular webinar and it was a deja-vu experience, it was surreal. The company I evaluated in orlando claimed to be able to build "ecco homes" using pre-fabricated pieces with solar panels. They actually had a production line set up and I visited it. The concept was brilliant and exciting. The numbers looked too good to be true. However, I'm a seasoned investor and business man and have learnt over the years to be very skeptical of people with grand visions but not much of a track record, but great presentations. The company that I was seriously considering folded within a few months and there were accusations of nepotism, embezzlement, usurping of projects... the list goes on. Needless to say the house of cards collapsed and not a single house was built. I believe they are mired in lawsuits now. But oh my, what a great sales pitch they had!

Now... take a look at the webinar and look between the PR fluff. The tech guy knows his stuff but does the webinar from a bedroom with the bed right behind him. What professional person does that ? I get it that we are in a Covid induced environment and we are all working from home.... but how can you possibly think that is a positive image that gives the audience comfort? What does it say about his judgement?

A quick google search shows for S2A shows the following:

S2A Investments 2, LLC raised $300,000 from 2 investors on 2020-06-08.

S2A Investments 2, LLC Filings

DateFiling TypeOfferedSoldRemainingMin. investmentInvest. countExemption / Exlusions
2020-06-08New Form D$15,000,000$300,000$14,700,000$150,000206c[SEC Filing]

S2A Investments 2, LLC raised $300,000 in total.


So they managed to get 300k by mid June.
Look up the registered address for the LLC



This is where their registered office is.

Do you really want to send your 150k investment here?
Do you really believe it will be worth 2m in 5 years?

Now... they many be legit and I may be watering the wrong tree..BUT... I could write a book on all the shenanigans and screws up I have seen in my 30 years of adult life in a business setting. In reading some of the innocent comments from fellow investors I felt very strongly in posting this comment. I've seen this play out - in a bad way - too many times.

Proceed with great caution.
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  • Karen Salem
    Real Estate Agent · Palm Coast, FL · Member since 2018 · 39 posts · 10 votes
    5y

    @Raisa Rodriguez I’m in Palm Coast. This is something I’m super interested in too. Keep me posted if you find a modular company to work with

    0Reply
  • Stu Bidasso
    Member since 2020 · 3 posts · 3 votes
    5y

    S2A sounds good on the surface but if you want to check out an actual functioning operation, check out Guerdon industries. They are here in Boise Idaho and have commercial units as well as residential. I have actually been to their factory. The only problem is they are only in the western States.

    3Reply
  • Branden Bestgen
    Investor · Rapid City, SD · Member since 2016 · 11 posts · 5 votes
    5y

    @Karen Salem

    Depending on the size of your project, Best GEN Modular in South Dakota might be able to supply modular boxes for you.  They manufacture commercial modular units for multifamily and hotels.  

    0Reply
  • Michael Frank
    Specialist · San Francisco, CA · Member since 2019 · 51 posts · 39 votes
    5y

    Hey all. I'm pretty familiar with s2a. I interviewed their ceo on a podcast over a year ago (in 2019 I believe) and what they promise would be great - an affordable high end prefab company in CA. The suggested price point they suggested at the time ($160-$260 I believe) for a fully managed process would be outstanding if they could actually deliver it. However, i'd be very careful about using any prefab company that doesn't have a bunch of homes in the ground they can show. Back in 2019, they said they would start delivering homes in early 2020 and their PR firm regularly sends our team announcements, but we told them that we really need to see evidence of their homes being delivered before we cover them more and its now early 2021.

    There are a number of other great sounding prefab startups (Acre designs is one notable one) that have promised awesome product at great product that have not delivered. 

    6Reply
  • Martin Wellington
    Member since 2021 · 4 posts · 0 votes
    5y

    Good Evening All,,, I just signed up for a webinair with S2A on Monday 1st February and decided to probe a bit more. Thankfully, I came upon these comments. I am new to the Florida area, and looking at all available options. I would appreciate if anyone has any further updates re S2A, that can be shared. Much appreciated.

    0Reply
  • Jean Lacroix
    Member since 2021 · 5 posts · 0 votes
    5y

    Strongly suggest waiting until they actually build some houses. The proof is in the pudding. It's all puff in the air for now. Due diligence is a must. 

    0Reply
  • Martin Wellington
    Member since 2021 · 4 posts · 0 votes
    5y

    Okay thanks.. that seems to be the general feeling @Jean Lacroix

    0Reply
  • Scott Sprague
    Member since 2020 · 17 posts · 19 votes
    5y

    One easy DD step is to simply look at the very first messages on this thread posted over 7-months ago and then ask yourself, what has S2A actually built in this amount of time?  To my knowledge, the answer is nothing.  Have they delivered on any forecast made 7-months ago?  Not that I am aware of.  They promote and market like crazy on social media.  Their presentation appears to remain the same as 7-months ago, and it's primary goal is to obtain investors.  They seem to be finding individuals that will invest, which really surprises me.  WAY TOO many red flags here for my personal investment comfort level.

    1Reply
  • Martin Wellington
    Member since 2021 · 4 posts · 0 votes
    5y

    @Scott Sprague Appreciate your response. I have been trying to dig some more,, and the general trend appears to be as indicated. A warehouse was slated to open in Florida, but so far nothing. Thanks again.

    0Reply
  • Jean Lacroix
    Member since 2021 · 5 posts · 0 votes
    5y

    Does anyone know what happened to all the investor's funds from both California locations since they are not built yet? And the company supposedly now only want more investors for other proposed plants outside their state!

    0Reply
  • Jean Lacroix
    Member since 2021 · 5 posts · 0 votes
    5y

    Would also appreciate everyone's feedback or thoughts on their 50 / 50 ownership program? Also since nothing concrete to show up for it!

    0Reply
  • Marian Thompson
    Member since 2021 · 1 post · 0 votes
    5y

    @Artur Madej The background puzzled me too - thanks for a reminder to block out the noise.  Look forward to your feedback Mark. Thanks!

    0Reply
  • Howard Bernstein
    Member since 2021 · 2 posts · 0 votes
    5y

    I've just learned about S2A recently, and had a couple of zoom meetings after the webinar.  I heard a couple of things.  One is that they are expecting to pour a foundation in Patterson any day (so if someone were to drive by, I would expect to see (at least) a trench for foundation, and maybe forms.  The other thing is that they expected the Patterson factory to be online in the 3rd quarter, 4-7 months from today.  I am looking as a potential investor, but originally went to the webinar for information about building a house for myself.

    0Reply
  • Scott Sprague
    Member since 2020 · 17 posts · 19 votes
    5y

    I watched the S2A webinar presentation about 8-months ago. In the presentation forecasts were made. To my knowledge not single one of those forecasts has been attained in the past 8-months. It seems that the current webinar presentation remains similar to the presentation that I watched. In addition, the cost of a S2A home was presented as $169 psf plus some onsite construction costs. In my DD I learned that the additional costs to expect were not minimal. When all is said and done (onsite construction, delivery fees, permits, site work, exterior work, garage, driveway, etc.), the cost of the home is closer to $350+ psf and that doesn't include land cost. I really liked the S2A story and wished it to be true, but so far it appears to remain only a story.  Unfortunately, my belief is that the story is primarily about raising money from hopeful individuals. I hope that I am wrong.

    0Reply
  • Jean Lacroix
    Member since 2021 · 5 posts · 0 votes
    5y

    Yes, I believe they do have a great system in place to reel customers in but are missing actual proof of design and feasibility. Also no guarantees on investments and I think they are using investor's money to keep the mass payroll going etc. meantime. Does anyone have their financials since creating this company. That would be very interesting! Any suggestions?

    0Reply
  • NA Kalinan
    Member since 2021 · 2 posts · 0 votes
    5y

    @Federico Morales  Following up on COG$?

     Their website estimates apprx 140 "in CA" but I'm especially interested in why that $ is what it is...where does each element come from in Costs of Build? Likely driven up by solar/fancy equipos



    0Reply
  • NA Kalinan
    Member since 2021 · 2 posts · 0 votes
    5y
    Originally posted by @Artur Madej:

    Please do your DD carefully. There are many companies out there offering similar solutions and ideas. I almost invested in a near identical scenario in Orlando a few years back. I listened to this particular webinar and it was a deja-vu experience, it was surreal. The company I evaluated in orlando claimed to be able to build "ecco homes" using pre-fabricated pieces with solar panels. They actually had a production line set up and I visited it. The concept was brilliant and exciting. The numbers looked too good to be true. However, I'm a seasoned investor and business man and have learnt over the years to be very skeptical of people with grand visions but not much of a track record, but great presentations. The company that I was seriously considering folded within a few months and there were accusations of nepotism, embezzlement, usurping of projects... the list goes on. Needless to say the house of cards collapsed and not a single house was built. I believe they are mired in lawsuits now. But oh my, what a great sales pitch they had!

    Now... take a look at the webinar and look between the PR fluff. The tech guy knows his stuff but does the webinar from a bedroom with the bed right behind him. What professional person does that ? I get it that we are in a Covid induced environment and we are all working from home.... but how can you possibly think that is a positive image that gives the audience comfort? What does it say about his judgement?

    Thanks @Artur Madej

    I am also an FT investor albeit several dissimilar sectors. I noticed point 16 on the filing suggest a "management fee of $15K/month for 24 months"? what the heck? that's almost 300,000! Are they seriously forking over 300K for a 'management" fee and to what entity?

    Sorry for the wonky formatting I do not usually use biggerpockets.com :D thank you

    Thanks for the DD!

    0Reply
  • Martin Wellington
    Member since 2021 · 4 posts · 0 votes
    5y

    Wwwwweeeellll,,,, that about does it for me.... thanks everyone for the feed back.... much appreciated.

    0Reply
  • David Marc Walton
    Member since 2018 · 1 post · 0 votes
    5y

    I'm a very early investor in S2A.  I'm not an employee or executive.

    Someone here asked if CEO, Brian Kuzdas is honest.   I invested with him once before.  We hit some red tape and wound up cutting our losses.  We lost very little and my capital was returned to me promptly!  Brian was honest and maintained good communication through it all.  I had first met him a few years ago when I was a student in his property flipping course.

    Those of you on the East coast,  stay tuned.  S2A has plans to accommodate you. 

    Someone poo-pooed the idea of buying tesla trucks.  I'm actually a truck driver by trade and don't like the idea either.  Frankly I bought a share of S2A instead of my own truck, but John & Brian are smarter than me.   I guess the trucks are for image with the whole net zero idea and all. I bet they'll be a plus for the bigger picture. 

    Please watch the webinar.  It's very informative.   Brian and his growing staff are great with answering questions.  

    Dave Walton

    1Reply
  • Jamie Bailey
    Member since 2021 · 1 post · 1 vote
    5y

    I am following. I loved the presentation. I am a potential S2A investor,  mortgage lender, landlord and  real estate investor and was curious to be find out about being a sales agent for the company. I scheduled a phone meeting, they cancelled. I scheduled another and they cancelled and proposed new date/time. I have yet too reschedule, figured I too would do my DD. Pricing is high for me, I'm in Virginia so costs to build aren't as high. I would like to hear from the earlier investors about how things are going and what you're being told, etc. 

    1Reply
  • John Sayers
    Specialist · Austin, TX · Member since 2017 · 137 posts · 109 votes
    5y
    The Waco property is not showing that they own it.
    Maybe a JV with the Chamber/Waco Industrial Foundation/EDC groups exists?
    Maybe they have a purchase option on the dirt?
    No local announcement found that made news on a new manufacturing agreement. The chamber seems to announce them here:  https://wacochamber.com/catego...
    A lot more questions than answers.


    1Reply
  • Denis Ryan
    Flipper/Rehabber · Fort Walton Beach, FL · Member since 2019 · 9 posts · 8 votes
    5y

    I watched their webinar last week. I've been going through it since and it has more holes than Swiss cheese. A lot of the math doesn't add up.

    1. Brian says in factory module is 90% of cost, with 10% onsite, yet, slide 84 says $190 total cost with $105sq ft for modules (which is 55%) and $85sq ft for onsite (45%).

    2. You then add 25% profit for a total sq ft price of $237.50. I live in the Florida panhandle and even though lumber has skyrocketed, new 2000sq ft homes, land, and everything included are still being advertised for $145sq ft. I know this market is a lot cheaper than most others in the country, but they're not going to sell homes here for that price.

    3. The 170,000 homes in their "being negotiated" pipeline for the panhandle really intrigued me. Less than 800k people live in the 4 biggest counties in the panhandle. 17k homes would be a lot for this area, 170k is just ridiculous. There are not enough people here to live in them, let alone the infrastructure to accommodate them if there were enough. 

    4. 170k homes at a maximum yearly build rate for a factory of 2,000, would take 85yrs to build. 

    5. At $50k profit per home, it would also profit $8.5billion. Enough to build factories all over the world, yet there's no mention of building one here if this deal gets signed off on. Jacksonville is 5hrs away and would equate to $2,700 in transport costs for one module. They also don't mention the cost of the crane at any point.

    6. The Hemet, CA, factory is still on a slide (73) but was not mentioned at any point in the presentation. What's happened with that factory?

    7. For the Jacksonville factory, they are supposed to break ground in May and finish in December. Yet Brian says they will pay back investors in this factory from revenue in 2021 (which would be one month's worth). They would be lucky to be paid back in 2022, with the factory running at capacity.

    8. They also make it sound like building in factory and transporting will have no problems. To use a Tesla comparison, Elon Musk went through "production hell" with his first factory. These guys are talking about building 20+ factories without building a single product yet. A legit enterprise (like Tesla) would build a factory first, iron out all the production problems and then start building more factories around the country. If they ever do actually build a factory, they will definitely have "production hell" when they first start pushing out product.  

    There are a lot more examples, but I think I've said enough already. It's actually a pretty unprofessional webinar that a good proofread and a calculator could tidy up a lot. The fact that they didn't bother says a lot about how thorough they are. 

    I wish S2A was a viable company to invest in, but the math (and a lot else) says it's not. 

    1Reply
  • Jean Lacroix
    Member since 2021 · 5 posts · 0 votes
    5y

    I hope investors can get their money back! 

    0Reply
  • Raisa Rodriguez
    Member since 2020 · 7 posts · 1 vote
    5y

    @NA Kalinan did you find another modular company to work with in Northern Florida? My organization is currently looking for one.

    0Reply
  • Raisa Rodriguez
    Member since 2020 · 7 posts · 1 vote
    5y

    @Sharon Laudisi. how’s the negotiating going? Done?

    0Reply
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