How to build a Tiny Home Development?

Question

Has anyone looked into developing tiny homes? My curiosity with tiny homes is driven by a few economic factors, mainly affordability, but want to look into some type of BTR model.

I initially ran the numbers assuming you buy the 'Lego set' from Home depot for $50,000 each, but realized those would technically be considered manufactured housing. Therefore you would need to be zoned for a MHP. However, while at the local watering hole, someone proposed, "what if you build them on site and fix them to the ground". Therefore, they are just tiny homes, not tiny manufactured homes and could build them in any residential lot - assuming there are no restrictions about minimums.

Anyone explore this or have anyone they can recommend that has done something like this before? Is it possible or have I spent too much time at the watering hole?

Jewel B. · Answer

Another exit strategy is seller finance.

Michael Weigum · Answer

Hi @Tony Guarino

I have a plan to build tiny homes and cabins on land to STR them. That has always been a goal of mine. I've seen people buy an acre of dirt and put a tiny home on it and then STR it for a year and then sell it for double what it cost them because it has a track record of rental income. One downside to this that I have found is that it is hard to get financing on a tiny house, if not impossible, so the next buyer will probably have to be a cash buyer. When I'm looking at exit strategy, that concerns me a little. However, if you had a primary residence on the property as well as some tiny homes, then the value of the whole property goes up and a buyer would have an easier time getting financed. Like you said, these are ideas from the watering hole, but also from what I have seen personally and have been contemplating. I do know of a couple of tiny home developements that have been done. There is one in Leadville Colorado. I also saw one in Franklin, North Carolina. I know there are others around the country. I would like to talk to the person who developed them as well and see what the whole process consists of.

Chris Davidson · Answer

@Tony Guarino with tiny homes you lose the economy of scale with building. You still have to have the same systems (and smaller size appliance cost more) which what run up the cost. While you may be able to cut a 20k off a house but lose 50% of the living space.

I think for a STR tiny home type village might be doable/ but for LTR's or to sale the markets I have looked in it just doesn't make sense when you put pen to paper as it normally falls short of highest and best use.