Manufactured Homes on Vacant Land in Northern California ?

15 Replies

Hello everyone,

I'm looking to invest in a piece of land out in Northern California and setting a manufactured home on it.

Does anyone have any experience they might want to share. Any tips, tricks, and advice would be greatly appreciated. 

Thank you in advance!

P.s 

I know how to return a favor, so if you ever need anything on this side of the country please let me know :)

Hello Jesús,

I have alot of experience with dealing with this issue. Everything  depends upon the rules of your planning jurisdiction. many counties and cities are opposed to manufactured homes. Have you considered a modular instead? Manufactured homes lose value fast, are much much harder to finance, appraise very poorly. If you go modular You can order them without roof/truss and install a steeper more attractive roof so since a modular on foundation is considered same as sight built legally and your house will not look like a modular home with a steeper roof and overhangs. The price will be very close to manufactured but you will not lose out on hundreds of thousands of dollars of future equity. Then your permitting and financing will be normal and allowed in all jurisdictions. 

@Justin Eggert - Thank you, all the information you provided is actually very helpful! I will definitely look into a modular instead of a manufactured one. 

Would you suggest I stay away from lots that do not yet have utilities installed? How much are people paying, on average, to get these installed? 

Originally posted by @Rick Trivedi :

@Jesús Zazueta - Have you thought about ADU?

Hey Rick, no I had not. I guess I was under the impression that an ADU can only be built as part of a primary residence on a lot. 

Or maybe you were referring to a "tiny house"? 

I'm all ears if you have a creative strategy in your toolbox you would like to share! 

@Jesús Zazueta

Utilities are the biggest issue if you are outside of city services. Many prices of land that are cheap (especially in California) are cheap because they won’t pass a perc test for septic system, or they have endangered species restrictions and require expensive mitigation fees, you want to check for protected trees and plants, wetland restrictions, and you will want to do a geotechnical report to be sure you can get a foundation on there. So any property you want to buy you should try to negotiate a 3-6 month contingency period. Because you will need to do a lot of due diligence to ensure that you can build there. Also as a tip if you get all of this checked quick you can get your modular plan picked out and go through planning to see if there is going to be resistance to your build and even get permits to almost to be ready to break ground before releasing contingency and having to start paying interest payments on your construction loans. If you are financing this deal with hard money this can save you a lot of money! Even if you don’t finish permitting I like to know exactly what I am going to build and have it fully priced out and preapproved for the financing of the final product before I buy the lot.

I actually meant Modular Prefab home sorry. There are some good posts here on BP on those. Fairly affordable and definitely better than a manufactured home.

12 plus years of assisting investors doing this, we have seen the best returns  here in California. Utilities are the biggest deal. Affordable housing is much needed and manufactured / modular is a wonderful alternative . The foundation system is a huge piece. Happy to try and assist and network .

@Jesús Zazueta

Hey !

The specifications to the roof pitch and eave sizes (roof over hang) can be addressed by the factory you ordering it from. You can order a manufactured home in “ MH Advantage “ which is a set of guidelines that would make comps be in line with site built homes in the area. If zoning requires the home be “modular” or installed on site as opposed to transported on a permanently fixed I-beam than you will have to order it as a modular home in the style of MH Advantage.

If your area allows manufactured homes than I suggest getting it in MH Advantage. Doing this will save you about $30k (on a typical 2000sf 3 or 4 bed 2 bath) but give you all the advantages and appreciation and appraisal and financing options of a site built home.

There are a number of MH Advantage manufacturing guideline approved by Fannie and Freddy. They are a combination of roof pitch, dormer count and sizes , covered porch square footage, attached garage, 16 inch eaves, 2x6 construction, driveway with sidewalk leading to front door and more. These guidelines can be combined to qualify, not everything I listed is required on your one home.

I can get deep into a lot more as I am a licensed HUD consultant in the design and ordering of manufactured and modular homes for Land + Home packages.

Hope this helps

Justin Ceballos

@Jesús Zazueta

BTW

Homes in that área can be ordered and ready for installation in about 6-8 months. These 6 months are you used to prepare your site, permitting, marketing etc while you home comes up for production.

The home itself is made in just a few days.

I can suggest a Clayton HDX2874 ordered from Homes Direct in Merced

Ultimately, the home would be delivered from the Schult factory in Buckeye, AZ

I am a consultant at the Buckeye location.

The above mentioned model comes standard with four bedrooms and a double living room farmhouse style split plan that has been very successful for us.

The list of STD included options is long.

Eave sizes can raise the cost of transport due to highway regulations, but it’s worth it.

Good luck

Justin Ceballos

I would still urge you to go modular instead of manufactured. I have a great case study in my area in Northern California wine country, there was a manufactured home that was very very nice they built great decks and made a grand entrance it was on 1.5 acres in wine country. All of the homes in that neighborhood with that much land sell for 1.5-3million however this Sat on the market and went in and out of contract for a year… then eventually it sold for 800k… I did comps because I was curious and this was half the value of all relevant comps of site built homes on the same street … 1.3million was the lowest comp and 3.4 million was the comp for a remodeled modern farmhouse that was marketed well. But this house with all the potential to sell at least at 1.3 million could not get over 800k because people where thinking of this as a tear down and just getting a lot in a 3 million dollar neighborhood due to it being designated with the stigma of manufactured. Had they bought modular in foundation they could have realized 500k more in value as the neighborhood appreciates, that was an expensive mistake on their part and they could not have saved more than 50k at that time 20 years ago. 

Originally posted by @Justin Eggert :

@Jesús Zazueta

Utilities are the biggest issue if you are outside of city services. Many prices of land that are cheap (especially in California) are cheap because they won’t pass a perc test for septic system, or they have endangered species restrictions and require expensive mitigation fees, you want to check for protected trees and plants, wetland restrictions, and you will want to do a geotechnical report to be sure you can get a foundation on there. So any property you want to buy you should try to negotiate a 3-6 month contingency period. Because you will need to do a lot of due diligence to ensure that you can build there. Also as a tip if you get all of this checked quick you can get your modular plan picked out and go through planning to see if there is going to be resistance to your build and even get permits to almost to be ready to break ground before releasing contingency and having to start paying interest payments on your construction loans. If you are financing this deal with hard money this can save you a lot of money! Even if you don’t finish permitting I like to know exactly what I am going to build and have it fully priced out and preapproved for the financing of the final product before I buy the lot.

A lot of great information, very helpful!

I've emailed the City of Stockton regarding this idea, I'm not sure they would even allow it.  I'm also assuming that installing utilities wouldn't be an issue at this location since it's within city limits. One of the only reasons why I'm considering Stockton is because I already have a guy there with a 5,000 corner lot, but I'll be looking at other locations as well; I'll run the numbers once I hear back from the city to make sure it makes sense for us to do. 

Are you familiar with Stockton's planning/permitting department regarding this topic? 

Originally posted by @Justin Ceballos :

@Jesús Zazueta

BTW

Homes in that área can be ordered and ready for installation in about 6-8 months. These 6 months are you used to prepare your site, permitting, marketing etc while you home comes up for production.

The home itself is made in just a few days.

I can suggest a Clayton HDX2874 ordered from Homes Direct in Merced

Ultimately, the home would be delivered from the Schult factory in Buckeye, AZ

I am a consultant at the Buckeye location.

The above mentioned model comes standard with four bedrooms and a double living room farmhouse style split plan that has been very successful for us.

The list of STD included options is long.

Eave sizes can raise the cost of transport due to highway regulations, but it’s worth it.

Good luck

Justin Ceballos

Thanks for all the info! I'll be looking into Homes Direct in Merced and the Clayton HDX2874 (modular MH Advantage). And if you don't mind, I'll reach out directly when we're ready to make the move or get more info. 

I have made a lot of money doing just that in Northern CA.  You have snow there in most places so your best choice is to buy a used  doublewide MFH in Reno. Put it on a hill with a permanent foundation and a full or partial basement with an outside entrance. Strip the home and put in hardwood floors, new kitchen, bathrooms and new double pane windows. Paint every wall off white and have new white trim installed. Replace all hardware with oval or black knobs. Windows and hardware are important. Re roof. For less than a new mobile home you will have a nice home that can be mortgaged.

Originally posted by @Rachel H. :

@Jesús Zazueta Just be sure to put trip insurance on the home for the day of the move. Anything can happen while the home is in transit to the new location. Hope that helps! 

I don't think I would've thought of that, THANK YOU!