I am looking to build a 5-15 unit multifamily complex using shipping containers which are fully built from China. After having read dozens of articles about building multifamily using shipping containers I am convinced this can work. Throughout the world Japan , Germany, Canada , South Africa,China and several other countries use shipping containers for constructuon projects. This method is used because it offers reduced costs in building, reduces the time of construction 30-40% , is stackable, fireproof, and safe . This building method is common throughout the world which sparked my interest .. Japan is the world leader in prefab contruction where 15% of all new construction projects are made using prefab construction methods. The project I am seeking to develop would include buying two 40 ft extra high shipping containers From China and have them shipped to Tampa Florida. . The process would include: having a Chinese factory build the shipping containers in the Guangdong Provice (largest manufacturing area/ construction factories in China) ,shipping them to Tampa,setting them on a concrete slab, cutting out the center walls, welding/ connecting the container, and finishing the center part with tiles. . Prior to doing this I would have to connect the sewer,water electric , have the blue prints , permits and other other aspects of the construction in place . The largest monetary savings would be buying this containers prefabbed from China and this would significantly reduce all construction costs. The average build costs in Tampa are 110 sq ft however this can be done for under $55 sq ft After analyzing the construction costs in building a 640 sq ft apartment using two 40 ft containers my calculations totaled $24,000/unit (this price includes the shipping costs from port to construction site). This 640 sq ft unit would be built to Tampa housing codes which would not impact the approval of the unit. When calculating the cost per buildable square foot the costs are : $37.50 /sq. Ft however this does not include the roof. After looking over all costs in this development I came up with the number of $45,000 per unit which includes land, permits , parking lot, roof,GC costs , Architectural costs etc. This unit would be a small 2 bedroom 1 bath and it would be rented to a section 8 tenant for $945 where the tenant would pay for water & electric. When calculating the return on investment I came up with a an ROI of 15% $45,000 total build cost /unit Gross yearly rent ($945 x 12 = $11,340) -40 % expense Income $6,804 6,804/ 45,000. = 15.1% ROI These are not accurate calculations but I believe they are close based upon my research.

One thought came to mind when asked about window installation and other materials getting installed in China before shipping them .. I would think you could source all that material there and whatever you couldn’t install or need to keep uncovered for inspection could be placed and secured in the container itself and then things like the windows could be later installed on site but with the materials you get from China .. another person commented on sending a rep to the factory and basically sleep there to make sure they are doing what they promised .. that is something you certainly will find you will have to consider.. as for building new ones from scratch .. I thought the Appel to shioping containers were the lower cost in acquiring them after one time use .. sort of recycling them into viable housing .. have you looked into grants of this type ..or maybe even rehabilitation type grants that may provide money that could offset your labor cost here .. if your recycling and providing low cost housing along with providing local jobs .. I have heard of city or state programs for those types of projects .. not necessarily for container home but you never know until you ask .. Just a idea .. as for myself , I have researched building a SFH out of used containers that I can source right here in Fl .. a couple things that I found stopped me from going forward right away on one that I had planned to flip . This is just what I was told about a year ago 1. Because they are relatively new , a lot of banks won’t loan money on them because appraisal’s can prove difficult for true value and they are not sure about depreciation rates like mobile homes tend to depreciate over time .. 2. The city I was interested in building it seemed put off when I asked about restrictions .. they didn’t know enough about them to decide on the spot ..and I was told permitting might be a problem because again .. inspectors are not familiar with them enough to not run into problems signing off on some things like load limits ( i was looking to maybe build at least a two story with 8 containers total of close to 3200sqft woth two of the upper ones canter-leaving over the parking area ) the property I was looking at aquiring for this project was right across the street from a $1.1 mil 3800Sqft new house on the lake . And the surrounding homes were anywhere from $200-280 a sqft .. I had a custom builder quoting me $110 a sqft for one of his CBS homes to drywall and I figured with a container home I could have built it complete for that .. plus the $100k for the land, which would have put the project at around $450k completed .. so if it could sell at even $200 a sqft , we ( my investment partner and I ) could gross around $200k which is really lowballing it because in reality if we had built it , then it should have sold at the top of the scale , closer to $300 a sqft seeing how it would be the only and first one in that area ) Which is another reason we decide not to .. or I should say he decided not to fund it! Because it would have been the only and first one .. coupled with the first two reasons .. our thought process was that it would have to se as a all cash or a large cash deal and that would limit our field of potential buyers .. My hope is that in the not to distance future I can build one for myself and my wife by using the equity we already have in our exsisting home ( around $250k equity ) and that way we could have a nice beautiful cool place to live and use it as a stepping stone to possibly building more in the future as investments .. whether they are SFH’s or MFH .. I certainly will follow this thread .. And I’m excited to read any updates you or any other posts .. I wish you the very best .. God Speed ..

Update. I have not been on Biggerpockets for some time now due to the amount of work I have been putting towards this project. I have located a 2 acre parcel in Tampa and I have built many relationships with local Brokers, Bankers, General Contractors and Real estate agents. These past 2 months have been educational and eye opening. The relationships one builds with professionals gives you the confidence to move forward and keep going. I had many questions to ask,many meetings to go to and several emails to send however it was well worth it . In this type of project there is no room for mistakes because the project is multi faceted and it's imperative to align all parties especially the local G.C and the modular container builder. Finding the vacant parcel was not difficult but finding the parcel which was in line with this project was. At this time I am negotiating owner financing with the seller along with getting preliminary approval from the zoning/planned development department for this project. If all goes well I be will closing on the lot in August The original approach was to build 20 units however the land I am found can sustain 40 units ( 20 units per acre). . Since this will be the first project I will build in two phases. Phase one will include the first 16 units being built and then the remaining 24 units will follow. Once the plans, rezoning and paperwork are carried out the initial phase of site clearing will begin and the horizontal construction will follow. This coming August I will be meeting with a company that has been building modular structures for the past 22 years and having them on my team will make the process stress free and smooth sailing. The shipping container/modular unit will measure 17' x 43' (731 sq. ft). This will be a medium sized 2 bedroom unit perfect for a small family. The modular builder will complete the first 16 units (total of 32 containers) in 2 months and then all units will be shipped to the port The port will load all 32 units on the container ship and the ship will arrive in Tampa units within 6-7 weeks. Once the shipping container vessel docks in the port a local logistics company will be hired to deliver the containers to the job site where a crane will lift the containers and position them on the concrete slab. The container stacking and assembling process should take 2-3 days and then the connecting, welding and bolting will follow. I will provide more information soon and pictures will be added once we begin construction.

The whole appeal of the shipping container concept was to use the excess shipping containers that are already here, not import new ones. Basically you're going to be paying a whole lot of money for 4 walls, that can easily be built on site, and spending a lot of time trying to get them through the approval process to be able to be used in the U.S. They definitely won't be affordable by the time all is said and done. Why try to reinvent the wheel when there are already shipping containers here? As to the pre fab homes someone was asking about, the devil is in the verbage. Search Modular Homes, Prefab Homes, Fold up homes, etc. Though there are some that are very spendy on the fold ups, etc. there are plenty of Modular home manufacturers that build everything from SFR, MFR, Hotels, Dorms, Retail, etc. It's not a new concept.

Lots of good posts and good feedback. Great topic. As presented, the concept is to import modular housing as a containerized and complete product, with the expectation that cost savings in pre-construction will improve margins and help justify the project. The manufacturing would be done off-shore in a standard container footprint that could be drop shipped and then installed on an improved lot with an appropriate foundation and site finished. My first comment: There is nothing wrong with the concept. The current modular housing deployment process is to buy modular housing as a complete product, have it delivered and set-up on an improved lot with an appropriate foundation. My second comment: The biggest challenges in this concept/project consists of a minimum of: 1) finding a supplier in the Prefabricated Home Manufacturing industry, 2) establishing financing in this space, 3) meeting development and building standards from your local jurisdiction authority. All three are significant. Note I only listed the biggest challenges and not other common development tasks most people consider relevant and significant, like site selection, profitability, 'bankability', marketing and sales... and additional tasks like importing, following the Harmonized Tariff Schedule, clearing customs, etc. Karen nailed it: "...the first thing you'd need to do is discuss it with the planning and building departments where you hope to construct these. Most modular construction has already been preapproved with their methods of manufacturing and materials so that they're able to go into most states, but since you're creating a new product for housing, I'm sure you'd need to get the process, materials, etc. approved first." My Observations:I have not done market research to know much about the Prefabricated Home Manufacturing industry. How many companies are there and where are they? There are existing companies in China (e.g. this prefab 'platform' manufacturer) that provide steel container SFR, Apartments, hotels, etc. already, so seems like an analysis of these existing companies is in order. I'm not convinced the out-sourcing economics work. The Table below (link) shows the US construction cost breakdown from the NAHB (National Association of Home Builders) Economics and Housing Policy Group. I think some savings in framing, interior finishes, and system rough-ins will be largely offset by logistical costs, import duties, (amortized) engineering and development costs, and permitting. Cavco Industries, Inc., the second largest producer of manufactured homes in the United States, has a gross margin of 20.4% with 100% US labor and factories. To me, that's the bar. You need to offer significant price advantages if you plan to build this concept into a business. The Cavco market is household incomes under $60,000 so young people and people over 55, per their 10-K. The Section-8 market is similar but different. My Summary: My call to action would be for you to prototype your first containerized product, with discovery of anticipated cost reductions over existing construction practices as a goal. In the process you may discover if there is a reason this segment of the Prefabricated Home Manufacturing industry hasn't migrated to this type product. The big difference, of course, is you offer a new twist to the Prefabricated Home Manufacturing industry. This industry, having shrunk and consolidated with lots of players exiting in the last decade, is ripe for a radical market disruption: "Since mid-1999, the manufactured housing industry has experienced a prolonged and significant downturn...." (from Pg. 3, Cavco Industries latest annual report filing)I see the market for higher end products, based on niche (if not somewhat misguided) sustainability and 'green' marketing efforts. I'm not yet convinced that this product 'works' in the (subsidized) affordable housing market. My Observations:I have not done market research to know much about the Prefabricated Home Manufacturing industry. How many companies are there and where are they? There are existing companies in China (e.g. this prefab 'platform' manufacturer) that provide steel container SFR, Apartments, hotels, etc. already, so seems like an analysis of these existing companies is in order. I'm not convinced the out-sourcing economics work. The Table below (link) shows the US construction cost breakdown from the NAHB (National Association of Home Builders) Economics and Housing Policy Group. I think some savings in framing, interior finishes, and system rough-ins will be largely offset by logistical costs, import duties, (amortized) engineering and development costs, and permitting. Cavco Industries, Inc., the second largest producer of manufactured homes in the United States, has a gross margin of 20.4% with 100% US labor and factories. To me, that's the bar. You need to offer significant price advantages if you plan to build this concept into a business. The Cavco market is household incomes under $60,000 so young people and people over 55, per their 10-K. The Section-8 market is similar but different. My Summary: My call to action would be for you to prototype your first containerized product, with discovery of anticipated cost reductions over existing construction practices as a goal. In the process you may discover if there is a reason this segment of the Prefabricated Home Manufacturing industry hasn't migrated to this type product. The big difference, of course, is you offer a new twist to the Prefabricated Home Manufacturing industry. This industry, having shrunk and consolidated with lots of players exiting in the last decade, is ripe for a radical market disruption: "Since mid-1999, the manufactured housing industry has experienced a prolonged and significant downturn...." (from Pg. 3, Cavco Industries latest annual report filing) I see the market for higher end products, based on niche (if not somewhat misguided) sustainability and 'green' marketing efforts. I'm not yet convinced that this product 'works' in the (subsidized) affordable housing market.

Great topic, as a multifamily syndicator, I've been pondering the lower income/affordable housing issue for a while as well since we're running into the challenge of getting into a class C-/B "value-add" availability versus class A new build squeeze. @Mark Holencik what is SPF roofing? @John Umphress do you mean check with the city planners and zoning? Do you or anyone in this thread know of an attorney or architect well versed in this topic to shed more light on state law concerning industrialized or modular (not manufactured) housing? Here's a video for inspiration that shows a few eamples that solve the "Ugly-Container-Look" issue. There are hundreds if not thousands more to learn from. @Lesley Resnick do you have a source to talk to about manufactured or modular home certificates? Christian mentioned that US labor and product costs are prohibitive compared to Asian solutions. If anyone could recommend much lower USA made solutions, I'm sure he or anyone else would be looking into it. I hate unsustainable and environmentally destructive thought of using toxic diesel fuels to shipp stuff all around the world, if we could somehow avoid it, by creating local solutions. But that would mean cutting labor and material cost by at least 50%. @Christian Podedworny how doe you deal with extreme weather conditions such as Arizona heat or metal corosion due to Florida salty humidity? I remember form my clasic car restoration days that we wouln't touch cars coming from Florida since they were doomed to fall apart, it was just a matter of time. @Jay Hinrichs that's true. I see that a lot. Europeans are way ahead of so many things in the real estate building and resource creation and preservation space often due to space limitations and super high cost of energy and other resources. One is forced to innovate when the pressure rises. But there is a counter force called "much higher code standards" (thus costly) than anywhere else in the worlrd and a few other annyoung obstacles which renders many projects too expensive or impossible. You should see the quality of their windows, doors and locks - un-break-in-able. If you think it's hard to get somethig built in the US, visit a few European countries to engage with various levels of corruption, code, laws, taxes, regulations and red tape. In comparison, America is a walk in the park. That's why everyone wants to be there, right?!? ;-) Christian, this is an exciting topic I think we all should get our heads around way more. Things are changing in the wolrd and this could be part of the solution. Check out some of the videos that solve this issue visually very well. To live in a container doesn't mean it has to feel or look like one.

@Christian, it's a great idea. My company had looked into this a few years back, but the numbers didn't work for us. The containers are cheap, but the labor cost is pretty substantial. Since most of our subs hardly work on this prototype, we have to hire specialists to erect our structures... and the cost really add up. If you find a good architect and GC who are familiar with the area planning and building requirements as well as this type of construction, then you can go very far. Good luck. Here are the two "shipping containers" buildings in our area: http://www.latimes.com/local/lanow/la-me-ln-shippi... https://inhabitat.com/costa-mesa-waldorf-school-is...

@Christian Podedworny @Jay Hinrichs I was liking this idea until I saw the word "incinerate" in that last post.

Building low income housing using Shipping Containers ?

Dennis Wasilewski

Real Estate Agent · Philadelphia, PA · Member since 2017 · 184 posts · 87 votes

8y

Why would you order empty shipping containers? You buy them for cheap in US ports after delivery of goods from China. But I’m not sure building MF out of shipping containers works well, however you source them.

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Chris Ellis

Lender · Scottsdale, AZ · Member since 2017 · 106 posts · 75 votes

8y

Very interesting project. When are you starting?

Building low income housing using Shipping Containers ?

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