What started as filling a gap in an inflated housing market, quickly grew into what could be one of the fastest growing franchises in the home improvement space ever. Launched in 2019, Anchored Tiny Homes began as a family business that grew from a place of entrepreneurial spirit and pure demand. That entrepreneurial hustle and demand drove a fast climb. According to the brand’s 2023 FDD, its 10 corporate territories secured nearly $50 million ($49,380,188 to be exact) in gross sales in 2022.
“There are times in a culture where, if you can join something early on, you can make a massive impact and make a lot of money. I think we’re early on enough both in the industry and as a company that there will be opportunity in various markets nationwide,” said Colton Paulhus, the brand’s co-founder and CEO Paulhus said. “We’re just on the ground floor of ADUs solving the housing crisis. Multiple states are approving them on a statewide level, and as we expand through franchising, we’re going to sell out markets and become the name for tiny homes nationwide.
“In the past few years, we’ve shifted from tiny homes on wheels to ADUs to better support our mission of helping people become financially free, keeping families close and making housing options available for more Americans.”
In 2019, Paulhus noticed an ad on Facebook Marketplace for a tiny home on wheels and approached his father, a construction industry veteran, about the possibility of building their own. After making his own post, Paulhus received hundreds of inquiries, and he and his father sold their first tiny home for $82,000.
“We’re made up of two generations of builders and are a family-owned and operated business,” he explained. “After 30 years of servicing the northern California community, we decided to take on the tiny home market in an effort to do our part.”
How Anchored Tiny Homes Is Solving the Crisis
Simply put, Anchored Tiny Homes is creating homes, effectively closing the gap between available homes and the number of individual households seeking housing. While this is applicable in many arenas, the company, for the most part, caters to two key demographics: investors and families.
“The primary consumers are people with aging parents or kids coming home from college,” Paulhus explained. “A lot of these people are left to choose between a $600,000 home and an ADU, and the ADU just makes sense. There are a lot of people doing a family compound type of thing — multi-generational living — to save money, especially in a lot of the less affordable states and cities.”
Given the current state of the market, many young professionals cannot afford to purchase a home independently, and the cost of assisted living is only climbing. With an ADU, a family unit can be reunited on a single piece of property, allowing an aging parent or adult child to have their own space and maintain independence without making an irresponsible or hard-to-maintain long-term investment.
When investors break into the ADU space, they are able to address both sides of the issue.
“ADUs are also a great solution for the investor who wants to add cash flow to an existing rental property or build the unit in their own backyard to add rental income,” Paulhus added. “You’re adding value to your property.”
Investing in an ADU creates an opportunity to counteract any required mortgage or property-related payments. If an investor has a $7,000 monthly mortgage payment, for example, construction of an ADU on an existing property can bring in around $2,500 per month, which can largely go directly toward the pre-established mortgage rate.
“In that situation, it doesn’t have to be anything grandiose. The investor will probably build a one or two-bedroom unit,” Paulhus explained. “It’s not anything super big, and it’s really just going to help them with some supplemental income, along with creating more inventory amidst the housing shortage.”
The beauty of the Anchored Tiny Homes business, and the larger ADU market, lies in the fact that franchisees need not close hundreds of deals daily. The franchisor has developed a relatively low-cost model, with an initial investment that ranges from $161,250 to $287,000, and offering the potential to make millions.
“The earning potential on each individual product is huge,” Paulhus said. “You don’t have to make a lot of burger sales to get a high sales number. If the franchisee can figure out how to sell the product, which we provide support for, the growth potential is huge.”
The Future of Anchored Tiny Homes
Looking to the future, Paulhus says Anchored Tiny Homes seeks to award 25 territories in 2023. With multiple territories already in the works, the franchisor continues to focus on establishing itself in major metros.
“We’re pretty open to markets nationwide; the need is pervasive almost everywhere,” Paulhus said. “However, we’re aware that the major metros host an even higher demand. Places like Southern California, Oregon, Washington, Texas, Florida, New York and New Jersey have already proven to be promising.”
The franchisor also encourages prospective business owners in states that have already passed wide-reaching ADU-approval legislation to inquire.
Anchored Tiny Homes franchisees need not have extensive backgrounds in construction. Within the business, there are four primary buckets: sales, design, permitting and construction. Paulhus explained that, with the help of the corporate team, the franchisee conducts sales, and the remaining steps are outsourced.
“The primary trait we’re looking for in franchisees is a hunger to make a difference. We need someone who is genuinely passionate about solving the housing crisis, not just an investor who came across some money and is looking to distribute it somewhere,” he said. “Our values are all about faith, family and solving the housing challenge, and we seek to treat our employees, partners and customers like members of our ever-growing family.”