STR - Tiny Cabins, Creative Financing and Land Options

Grand Rapids, MI · Member since 2018 · 4 posts · 4 votes

Hi all!

I am in the midst of hashing out the last few legs of my business plan. In short, the business will consist of placing 3-5 nordic-styled tiny homes on some land (TBD) in Northern Michigan. When it comes to financing both the construction and land purchase (the tiny homes are manufactured in a Chicago warehouse, but will be permanently affixed to the land as a stick-built), what have your best experiences been to get that done?

Looking at just shy of $450,000 for land purchase + home purchases + site work to get her up and running.

And on a related note...does anyone have any GREAT RE agents they'd recommend in Northern Michigan, with a focus on vacant land/acreage? The few I've spoken with are just not going to get the job done.

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Bryan H.

Member since 2021 · 53 posts · 26 votes

Hey there,

This to me sounds grossly under-budgeted. I've built three successful unique airbnb small homes from scratch, and currently pricing vacant land and development costs for exactly what you've described (in rural NC or VA).

What have you allocated for land acquisition costs? Land development costs? Site work, septic, electrical?

Just for starters, let's say you find suitable 5 acres for $150k. Lot clearing, basic road, site development, can easily reach and additional $150-200k.

Curious about your numbers...

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Bryan H.
Member since 2021 · 53 posts · 26 votes
3y
Hey there,

This to me sounds grossly under-budgeted. I've built three successful unique airbnb small homes from scratch, and currently pricing vacant land and development costs for exactly what you've described (in rural NC or VA).

What have you allocated for land acquisition costs? Land development costs? Site work, septic, electrical?

Just for starters, let's say you find suitable 5 acres for $150k. Lot clearing, basic road, site development, can easily reach and additional $150-200k.
Curious about your numbers...
1 Reply
Michael BaumPro Member
Olympia, WA · Member since 2016 · 8k+ posts · 7k+ votes
3y
Hey @Allison Skelcy, you will most likely have to use a commercial loan of some kind. Maybe even an SBA loan. Getting financing for the tiny homes is pretty tough.

What @Bryan H. said could be right. Let's say 50-75k per tiny home. That's close to 1/2 your budget. Do you have the land in mind already?
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
3y
@Allison Skelcy the problem with most agents is they only learn a few ways to do business. Recommend you contact the real estate office BROKERS and ask them for referrals. THey have usually been in the business long enough to have made a ton of connections and know, "who's who".
[email protected]248-209-6824
Logical Property Management4.9458 Reviews
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Chase Hoover
Real Estate Broker · Staunton, VA · Member since 2019 · 194 posts · 216 votes
3y
Based on your budget, it sounds like you're looking for a ~$50k piece of land. Not many agents are going to be jumping out of their seats to help with something like this unless it's a quick easy cash offer. You may be better off just searching landwatch.com, zillow, etc and reaching out to listing agents directly.
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Lisa Wright
Real Estate Agent · Metro Detroit · Member since 2022 · 66 posts · 28 votes
3y
I'd also look at the state of Michigan Auctions. They list lots of vacant land.
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Michael Plante
Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
3y
Quote from @Bryan H.:

Hey there,

This to me sounds grossly under-budgeted. I've built three successful unique airbnb small homes from scratch, and currently pricing vacant land and development costs for exactly what you've described (in rural NC or VA).

What have you allocated for land acquisition costs? Land development costs? Site work, septic, electrical?

Just for starters, let's say you find suitable 5 acres for $150k. Lot clearing, basic road, site development, can easily reach and additional $150-200k.
Curious about your numbers...

5 acres for 150k. That sounds super expensive in rural NC and VA

maybe I don't know what needs there are for building STR?
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Bryan H.
Member since 2021 · 53 posts · 26 votes
3y
Quote from @Michael Plante:

Quote from @Bryan H.:

Hey there,

This to me sounds grossly under-budgeted. I've built three successful unique airbnb small homes from scratch, and currently pricing vacant land and development costs for exactly what you've described (in rural NC or VA).

What have you allocated for land acquisition costs? Land development costs? Site work, septic, electrical?

Just for starters, let's say you find suitable 5 acres for $150k. Lot clearing, basic road, site development, can easily reach and additional $150-200k.
Curious about your numbers...

5 acres for 150k. That sounds super expensive in rural NC and VA

maybe I don't know what needs there are for building STR?

Yes you can still find five acres of raw land for $15k, but you can also pay $250k or more. The difference? Location, location, location...
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