The Genius of GEICO, Clayton Homes, and NetJets -- GuruFocus.com
Manufactured housing has a huge cost advantage over traditional builders, as much as $100,000 per home. This cost advantage is more pronounced in Clayton’s case, because they get to borrow money from AAA-rated Berkshire at a 1% premium to Berkshire’s low rates.
So Clayton will have two important advantages in the next decade, low building cost and low financing costs. The biggest hurdle in my mind to Clayton becoming America’s biggest homebuilder is marketing; convincing people that these homes offer high quality. If that hurdle can be crossed, there is no reason Clayton, with its enormous cost advantages, cannot grow exponentially.