Rental Property Investor · Saratoga Springs, NY · Member since 2017 · 61 posts · 41 votes
I am a new BP Pro member and have spent the last couple of months in my area looking for great deals - any of the properties worth purchasing just seem to require an extensive amount of work. So my real estate agent suggested looking into new modular home construction. She said modular homes are much more affordable and all in, if we could find a plot of land at a discount, I'd probably be around the same investment as if I bought a multi-family and fixed it up. Has anyone had any experience in this space? Are there cons to building a new modular 4-plex vs buying an older more run-down one that I am not considering? Any thoughts would be much appreciated!!
Realtor · WV · Member since 2018 · 454 posts · 310 votes
8y
I have worked for a modular housing builder, and have sold many of them as resales working as a Realtor. They are typically rated just like a stick built home, so financing shouldn't be an issue. They are built well as they have to meet the national code for modular housing, and meet whatever the local code is that they are being placed.
I think they could be a great option, but be careful about the pricing. Typically when building a stick built or turn key home or multifamily they are including everything. If you buy a modular you can buy the units completed but there are lots of hidden costs such as: dumpster fees, onsite bathroom for workers, excavation, driveway, foundation, utility hookups, landscaping & sod or seeding. These are just a sample. I think it could be a great option but make sure to look at the whole picture and not just the price of the modular part itself.
Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
8y
IQmodular (sp) is a Modular build company here in Buffalo. We toured their facility & having done a lot of rehab etc I was impressed with the construction & designs.
At the time we visited they were building components for a commercial with high end units above a store front strip that was very well done. They also do smaller multi's.
We recently bought 4 acres & are tossing around the idea of down sizing into a modular ranch.
Rental Property Investor · Maryville, TN · Member since 2009 · 529 posts · 414 votes
8y
have you priced out mods? I have come to the conclusion that modular and site built are the same on a $ per sf basis once you factor in transport, setup of the mods. Of course they are faster but i am still unsure if there is a penalty at resale because it was built in a factory?
Investor · Los Angeles, CA · Member since 2015 · 90 posts · 27 votes
8y
Hey, guys...I too have been looking into the whole modular thing. I owned and sold/rented a few mobile homes, and somehow today I came across mods and am now binge searching all day.
I'm out in Cali, and out in the inland empire land is cheap. Thinking of putting some modular multi family units out there. Looks like they can be financed as well. So...maybe leverage the land and the home then rent out? Not sure if this is possible but I'm gonna research it. Keep ya posted...
Rental Property Investor · Maryville, TN · Member since 2009 · 529 posts · 414 votes
8y
@Miles Presha That SHOULD be a viable strategy but based on the rents in your market. I researched it as well and found that they were NO cheaper than site built but much faster to have rented out. What I still don't know is if one gets dinged at resale cause they are modular? No one seems to have the answer for that.
I also found that the financing was not available on more than one mod per lot
Investor · Los Angeles, CA · Member since 2015 · 90 posts · 27 votes
8y
Will I read somewhere from a realtor that modulars had the same resale values as typical homes. Even if I had to finance one on a lot - it might be worth it to put a 3-4 unit band new. Another thing I'm looking into is putting a modular ADU in my back yard (which is huge). They can be as big as up to 1100 sq ft. You can get some sweet rent for that in L.A.
Long Beach , CA · Member since 2018 · 34 posts · 24 votes
8y
@Allison Keib, be "cautious" of new construction (ground up) for new homes or modulars for new investors.
Ask your realtor if she had ever built ground up modular homes from beginning to the end before (entitlement, underground utilities, crane in units, rough hook up, final touch up, etc.)? If she did, then check her record before jump in with both feet. If she hasn't, then stay away, because the later problems will be yours... not hers.
New construction requires lots of know hows from paperwork to coordination with your "teams" to make a profit. If you never built before, then understand all the process of how much it takes to build a new home/modules before strap down all your cash in one place.
If the number doesn't work for your current search, then keep on looking... instead of getting stuck on a bad deal that mitigate you from invest on potential good deals.
Rental Property Investor · Maryville, TN · Member since 2009 · 529 posts · 414 votes
8y
@Miles Presha I have heard that they value same as site built....from a realtor as well, just wish i could get it from an appraiser. I have spoken with express modular and they do seem to have a good system in place and can deliver a turn key home
Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
8y
I don't have first hand experience with modular homes but they could be more difficult to sell due to financing. Not every loan program allows for modular construction. You might want to check that out.
Hey, guys...I too have been looking into the whole modular thing. I owned and sold/rented a few mobile homes, and somehow today I came across mods and am now binge searching all day.
I'm out in Cali, and out in the inland empire land is cheap. Thinking of putting some modular multi family units out there. Looks like they can be financed as well. So...maybe leverage the land and the home then rent out? Not sure if this is possible but I'm gonna research it. Keep ya posted...
hit me back with any thoughts.
Cheers,
Miles
I'm a multifamily property specialist/broker and my business partner is the president of a highly successful steel based modular manufacturing company. They started off in the one-off single family home modular designs but in the recent years have acquired facilities across the US to really ramp up supply to meet the demand of the market especially here in LA for developers looking to big large affordable multifamily housing. They have near 1 million sqft of manufacturing space between all the facilities now across the US and Canada.
The interesting thing with going modular in the multifamily housing sector is that in most cases, we are able to come below in cost over traditional construction and that completion time is much much faster which increases the investors/developers ROI which is huge. And the other advantage is that you're able to use a 15 or even a 10 year depreciation schedule vs. the conventional 30 year which is also a huge benefit to owners. Not sure if this applies to you but if you are planning on building lots of units it could be a natural fit. If you have specific questions about the company or modular building in general, definitely feel free to message me.
Investor · Los Angeles, CA · Member since 2015 · 90 posts · 27 votes
8y
@Michael S. I've looked at some land out in the inland empire with utility hookups that was pretty cheap. Thought about putting some units out there, *** I've success out there with mobile home investing. Is this what people do in the modular world? Find good land in a good location, and set up shop? I know there are tons of fees and permits to consider, but - in your opinion does this sound like a good concept?
Los Angeles, CA · Member since 2018 · 23 posts · 14 votes
8y
I would love to hear if someone has more insight on the valuation after the construction of Modular. From what I have researched, and from what the Modular architects/manufacturers/contractors have told me, there is no difference in valuation if it is permitted and receives its CO as a permanent structure.
I would love to hear if someone has more insight on the valuation after the construction of Modular. From what I have researched, and from what the Modular architects/manufacturers/contractors have told me, there is no difference in valuation if it is permitted and receives its CO as a permanent structure.
Rental Property Investor · San Diego, CA · Member since 2018 · 176 posts · 83 votes
8y
Has anyone ever considered using pre-fab home on a quick sale option? Buy a plot of land, finance the pre-fab home, and sell the whole package when its complete. thoughts?
Specialist · Toronto, Ontario · Member since 2012 · 2k+ posts · 891 votes
8y
@Brian Mcmenamin
You need to run the numbers.. I did it a few times and it didn't work out.. cost to build these days including prefab homes are not cheap.. you need to compare the median price per sqft in the area you plan on doing it..
It may work if you purchase a prefab shell and get some sweat equity to finish it off.. I seen as cheap as $30/sqft for shells..
Rental Property Investor · Charlotte, NC · Member since 2018 · 11 posts · 7 votes
8y
This is what I have been quoted about a year back when looking at an opportunity.
Approx $50/sqft for construction of the unit.
So approx $60/sqft delivered and set.