I am new to real estate and I am thinking of purchasing land and placing a multi-family modular to rent out. Has anyone done anything like this? Does anyone have a ballpark cost of how much the modular itself will cost. I know there are numerous variables that can add or lessen costs, I am just trying to get a general idea of how much a basic 2 or 3 family unit will cost.
Rental Property Investor · Greensboro / High point / Kernersville NC · Member since 2016 · 17 posts · 30 votes
7y
@Jenine Maggio
Around 8yrs ago, we purchased our 2nd SF rental which included a second building lot in the purchase. For years, we discussed options of building a new rental home, a modular home or moving a old home to the lot. After studying our options, we decided the modular home or moving a old home have similar costs. After much discussions, we decided to take on a very large project and move a house to the lot. We located a home about 20 miles away and decided to pull the trigger. We are 80% complete.
The modular building projections: - I found modular deals between $60k & $80k. Most modular Homes have $25-$30,000 added cost above the base price depending on your location, watch for hidden costs. A few costs: - Septic or sewer tap ($4500) - Build the footers for foundation / crawl space($10,500) - Add external Heat Pump in most cases ($3500) - Driveway ($3500) - Move Home ($1500) -water tap ($2500). The Best deal I found in NC was $60,000(special deal) + $25,000 = $85,000 - 3Bed/2bth 1200 SQ FT ($71/ft) ARV $100,000 to $115,000 - I have found that modular homes do not appraise has high as stick built homes. Rent = $1100/mth
For my move home:
Financials: 4Bed , 2 Bath, 1500 Sq Ft. 1/2 Acre Lot
- $18,500 purchase and move home, 1960s brick ranch with all brick removed and prepared to move, around 1100 sq ft plus carport.
- $80,500 renovation cost - New Heat pump, electrical wiring, plumbing, enclosed carport to add laundry room, master bed room and bath, refinished hard wood floors, new roof, new appliances, new siding, foundation, septic, driveway and much more, almost new home.
- $99,000 total investment ($66/ft)
ARV = $150,000, Rent $1250-$1350/mth
I determined the move home would offer better long term value and higher quality.
Looking at new construction in NC with current building costs, I would expect greater than $80/ SQ FT.
Pros Modular - Low risk, much easier process, much faster
Cons Modular - Low cost version feel like a Mobile Home, do not appraise has high , concerned about low quality construction.
I own one modular home that I purchased and it is a great rental home. However, I did purchase it at a discount vs stick built homes in the same community.