Prefab house experiences
I am a recent college graduate from UNC Charlotte and now that I have a degree in organizational management I would love to immerse myself more into the world of real estate investing. One idea that I have been pondering is buying a plot of land in a relatively good location with high odds of appreciation then placing a prefab house on top of it. Does anyone have experience with modular home builders, buying plots of land, or new construction? I would love to hear the opinions on prefab houses or stories, good and bad.
@Roger Verastegui I’m just starting to poke my nose into new home builds on existing lots in he Seattle area as well. Pre fabs seem like a great idea as well when they’re allowed. Are the costs for pre fab better in your area than a new construction?
I deal in mods on both the retail end and specs. Currently I am doing specs just outside of Charlotte and retail throughout the state.
I've done a lot of digging on modular & prefab. It really seems to make the most sense in areas where labor is hard to find, or tricky locations. Like, in the mountains, or the San Juan Islands. Otherwise, the costs of building pre-fab vs. stick seem to be pretty similar. That said, modular obviously goes in a LOT faster, and you don't have issues with stuff getting wet, sitting out, etc. I've been talking with Greenfab a lot, but there are several Seattle-area modular companies worth talking with.
Good luck!
Thank you all for responding, I appreciate the information!
@Paul Castillo In the piedmont area of North Carolina the costs of land are relatively cheap, however, good labor can be hard to find. Prefab is great because it reduces the amount of tradesman out on the site.
Originally posted by @Paul Sofia:I deal in mods on both the retail end and specs. Currently I am doing specs just outside of Charlotte and retail throughout the state.
Do you have a good reco for the Triangle area? I'm strongly considering going prefab on a couple of lots ... if the price is significantly less expensive than regular construction.
@Michael Frank what are the specific HUD programs? I have a large MF lot I am looking to put a modular pre-fab or panelized 5-10 unit building on due to lack of available labor...builders are all busy.
@Rich Wilken HUD 221(d)(4)
@Michael Frank Thanks!
To OP: My personal research has shown little with regards to value beyond time. Often when the pre-fab builds are cheaper they come without the longevity and quality of a traditional build. I imagine that is operator to operator and design to design though. I would reach out to regional pre-fab operators and see if you can locate some of their product. Then, go check out a few of the builds in person.
@michaelfrank are you familiar with proto homes out LA? I've been curious in some of their luxury design builds and looking for other companies with similar products.
(sorry to hijack thread)
Unfortunately, there is not a big difference in pricing. You can get them done much quicker than a site built, though.
Originally posted by @Rich Wilken:@Michael Frank Thanks!
As a note, a 5-10 unit project would not be economical under the HUD 221d4 program.
@Roger Verastegui I am a big fan of the concept of pre fab. Obviously it can be done well or poorly, like anything.
My experience is that buyers still have a somewhat negative preconception of them and you won't achieve a comparable value on resale even if building costs were the same.
@Roger Verastegui as an architect turned contractor, traditional construction is a more affordable way to build that pre-fab. When the sq ft numbers for pre-fab are quoted, they typically don’t include the costs associated with site work, foundations, and utilities; they are only quoting the costs of the ‘boxes’ that get dropped on site.
Many jurisdictions still haven’t accepted pre-fab buildings as an approved construction type as well, which can lead to a longer and more difficult permitting process.
I would do my due diligence for sure before going down the prefab route
@Parker Eberhard Thank you for the insight into the construction process, as a contractor, I am sure you see all kinds of pricing for labor and materials. Do you foresee new building materials that could be more eco-friendly and affordable? Or new building practices?
@Roger Verastegui
Environmentally friendly and affordable usually dont go hand in hand, as the more sustainable products are typically more expensive.
One product that is starting to gain more traction in the US (like many of these products, it has been used in Europe for the last 30+ years with great success) is CLT, or cross-laminated timber construction. Essentially large sheets of plywood made of timber, these panels provide exceptional structural strength, have a large amount of embodied carbon in them, are aesthetically pleasing, and can speed up construction times.
Like many of the newer construction methods and products being used in the US, many building departments are not knowledgeable in the product and may need additional permitting time. Also, the erection of CLT buildings should be done by specialized contractors who have experience with the product.
Another area that is seeing new technology applied is in the waterproofing / vapor control products. The latest and greatest products are paint on membrane systems that allow for a very waterproof building envelope. Once again these products aren’t cheap, but they perform well and will save costs associated with having to repair a failing waterproof system down the road...like many developers, though, who don’t give a **** about their buildings lasting longer than the time they can sell and any liability lasts, this type of system may not be wanted
@Michael Frank good info! I’m looking into the idea of buying modular. But everything I read says it’s pros to it but cost is same or more than stuck build. I’m doing buy and holds so I don’t need top of line. How do you compare the cost?