Modular multifamily advice

13 Replies

Hello, After diving into modular home builds I see very little downside other than potential timeline sliding longer than anyone wants. 

Is anyone out there purchasing land then placing modular multi family homes on them? I’d love to hear more from you!

I am currently looking into Toledo Ohio, and Colorado Springs,CO. I am about to sell two of my current duplexes to fund these and with the avg age of multifamily homes in the 60-70s and typically in really poor shape these modulars seem like a good idea for a buy and hold. 

My son is a union carpenter who has built hotels and apartment buildings using modular stuff from Poland and elsewhere. Watch out for quality and construction problems specifically water and mold and lots of delays. Your products may be completely different. Buying when completed might be a good way to go. 

Like everything else good products and some less so. Not far there is another modular house going up and this one is doing really well-I have been inside. Focused on energy efficiency; it is being built using blocks of foam and some rigid material. It is a duplex. The builder is a save-the-planet geek and it is a meticulous build. Steel roof, in floor heat and windows that open and close depending on temp and who knows what. The control room is like something from NASA. Lots of choices these days. All the best!

@Brad Seidel I've been doing a bunch of research on this strategy myself; the challenge that nobody talks about with going modular is the additional foundation and utility work that gets added onto the cost, which often doesn't make it worth it. I've been told to plan for an extra $90k - $100k in excavation, foundation, and utility setup on top of the cost to build/buy the modular. It's almost a zero sum game when comparing to the regular stick built products after its all said and done. Happy to talk through some of this with you if you are interested in connecting again. 

@Stuart Grazier great to hear from you! As you know I’m a huge fan of your company. And would love to speak with you more off-line. 

Are some problems not mitigated with purchasing land that previously had a home (at least some utilities and some foundation) 

I had planned on 60k for those factors. With a home that is slightly raised much of the plumbing is cheaper than stick built due to ease of access. But looks like I’ll need to adjust with 90-100k additional. 

Are you all still working Milwaukee only? 

I have been looking into this as well - for a weekend lake home at what we call "up north" here in Wisconsin. 

Basically set up like a large hotel room with a kitchenette, bathroom in the back and all floor to ceiling glass in the front. Then the pod gets surrounded by a deck on front and both sides, which is under a translucent, corregated roof. The interior kitchen plumbing ties into an outdoor kitchen on the side.

We would prefab the walls, floors and (sloped) roof. The lot gets a holding tank for plumbing, a well and solar power with batteries. Foundation would be a number concrete pylons, the home gets broken down into flat slabs, trucked to location and craned into place. 60k for site prep and utilities should do it, even though about half would go to well and septic alone.

The reason pre-fab makes sense for up north is because you cant buy any building materials in a serveral hour radius, so if you run out of screws, you are pretty much... so much easier to pre-build and truck. Overall cost is not much less than a traditional build, its just easier when you just assemble in a remote area. 

@Adam Reek

Waaay up there! Once I have my helicopter pilot license LOL - so far this is more of a day dream than a project!

Even thought about buying a whole lake and building a modular luxury cabin resort with every cabin having it's own deck right on the water, so you can jump in. But with the short season, rates would have the be increadibly high to get into the green. 

Like I said day dream, I think I would miss Milwaukee..

The issue with modular homes is if you ever want to refinance with a private/commercial lending company, you'll be rejected. This will mean you need to always rely on banks. In order to forever qualify for banks, you'll need to work a W2.

I have people come to me all the time with modular homes in decent areas, great condition and incredible cash flow. Of my long list of lenders, none will touch them.

@Marcus Auerbach I have toyed with a similar concept. Would need to be able to draw people all year. I think if you kept the design simple enough you’d probably be able to stick build them cheaper than the prefab route. You might have to dig your own lake though. Zoning will not be keen on doing that at the edge of a natural lake :-/

We are doing 4 modular homes in New Jersey, got the foundations laid, scheduled the house drops and used a finishing crew (specifically for modular) to complete. As long as you plan it correctly their shouldn't be any major delays.