Hello!

I'm new to the BP Community-- interested in buying my first deal in an expensive market (SF Bay Area). 

The general strategy I'm thinking of is this:

1) Buy an empty lot (they go for around $75 a sq foot in my area)

2) Hire a manufactured house builder / draw plans and get city approval

3) Get the property built (by assumption, it should be somewhat quick). Construction is around $120 /sq foot 

4) Rent out, collect rents, and refinance with a traditional mortgage.

My reasoning is that 1) Renters don't care whether a house is manufactured or not, so would pay the same rent had the property been site built. 2) Manufactured houses are much cheaper to build than site built, so cash flow would be better 3) I'm not too experienced in construction, so manufactured could simplify the process. 

I've talked to city planning and they seem to be quite open to building (there is a shortage of housing in my market). However, they told me that it would take at least 6 months to get the design review complete and break ground. The permits and approvals cost at least $35K...

Basically my idea hinges on the fact that the average house costs ~ $400 / sq foot in my area, but I could save 30% of the cost just by building a manufactured house from scratch on a lot. 

Any thoughts on this strategy? What are the pitfalls / errors in my reasoning?