I've recently been turned onto the BP podcast and forums. I'm in love! All the recent podcasts about the mobile home parks has got me thinking about some cool ideas. I'm curious what you guys think about an idea I'm working on right now.
I have created a decent sized business designing consumer products, getting them produced in China, importing to the US, and selling them online. I did a million dollars in sales last year so it's going pretty well :-D. I am doing a house hack right now in San Diego too (I own a condo and have a tenant-roommate paying half the mortgage).
It got me thinking about how I could marry real estate with my design and production skills. The idea of making prefab tiny homes in China and importing them to the US came to mind. I can produce and import tiny homes for about about $15k. I already found suppliers who can do this. The market for these size of tiny homes is going for about $30k-$50k each. That's a pretty nice margin! What do you guys think about this?
The problems I don't know how to fix right now are getting a certified architect to help me design them. I have an engineering degree so I can do CAD and 3D modeling. I have a decent amount of capital too so finding money isn't an issue. I just need someone to help with getting these designs more legit. A professional architect maybe? The other big issue is finding land that is zoned for this type of home. There are several ways I can do it, but it is a little tricky. I need to figure this out or find someone who is good with zoning issues in SoCal.
That's my idea right now. Please comment with suggestions and insight if you can. I'd love to partner with someone who can help too!
Can’t really help specifically with what you are looking for. However to piggyback onto this idea, I think modular construction would be a fantastic solution to a lot of the issues with new construction we see in the northeast in cities. Lots are uniform, say 14’-16’ wide, and construction costs are expensive. Crane in two boxes per floor with a splice in the center to accommodate variances in width. Stack them three high and save 100k in construction costs.
I agree with @Jason DiClemente . I am an architect here in NY. It will get very complicated to have to source the land and set it up. I agree that it would be wise to work with an architect on the building codes for an area (You will have to limit this area. If it is too large you may have to have multiple iterations to meet varying codes/zoning). I am not familiar with CA, however there are certainly local building codes and zoning information which should be taken into account when manufacturing. Once they arrive to States you do not want to have to make any major changes.
Also I'd make contacts with many local architect to put a list together of architects with whom possible clients can contact about actually getting it onto a site (land acquisition, permits, utility extension, foundation, etc.).
@Jon Ree yes that’s a great idea! There are container homes that can stack very easily. As well as flat packed homes that could be designed to be modular.
Yes, that is also a good idea to just sell the home instead of finding land and permits. That makes the capital required much smaller. Maybe if I get to the point where I’m importing a dozen a year, I can start thinking about setting up land. Just getting a few here and selling them without land is a good start.
As for building code, there are a lot of weird issues and loop holes that make it easier and harder for building code. Some tiny homes are legally RVs so don’t have to follow building codes. That means you pay $150/yr for vehicle registration instead of property tax.
@Jared W Smith where is the best place to find an architect? I tried posting to UpWork.com but didn’t have much luck finding a freelancer. Where do architects look for freelance jobs?
If you build them on wheels, to get it classified as a RV, you may be able to bypass most building codes.
The issue of building codes is extremely difficult to meet in most jurisdictions due to the basic structure of a tiny home. Stairs, plumbing, electrical, minimum square footage etc. simply do not comply with most jurisdictions.
Sell them to end users as a product and let them deal with the logistics of finding a place that will accept them. Considering most tiny home buyers do not keep them very long, and they depreciate considerably once they leave your lot, you probably do not want to set up a community. In a short time you will be competing with resale homes listed at half what you are charging for new. They do not hold there value.
@Andrew Erickson I do not know many architects that market themselves on there. You'd likely want an established architect/firm whom is licensed in CA. A sole proprietors or small firm would probably be your best bet.
You can start your search on the AIA (American Institute of Architect) California website. Here you will see a list of all the current chapters. At each local chapter, you can search for Member Directory. Here: http://www.aiacc.org/about/local-chapters/
Also, I will message you a local architect I know of who has pre-fab experience.
@Andrew Erickson Right now the ADU rules are being relaxed all over California in order to help solve the lack of housing crisis. there are a number of contractors who are specializing in helping home owners put small units in their back yards. These would be good people to connect with to find designers, as well as buyers for your tiny homes. Just google ADU contractors and you should plenty of contractors who may be able to guide you towards architects interested in this field.
Mobile homes are typically built to HUD standards. Park model RVs (400 sq ft or less) are built to RVIA standards and would be easy to finance for an end buyer with an RV loan.
I don’t know why you’d need an architect. Figure out the total weight of the building and put it on an appropriate frame.
If your goal is tiny home, put it on a frame with wheels and get t RVIA approved.
If you’re building modular that are designed to meet local building codes and be build on permanent foundations then you’ll need an architect to approve for each state / regions code.
@Andrew Erickson Let me suggest a few things.
1) Make them fit into one or more of the standard Intermodal Container sizes.
2) Don't forget covers for the windows. They will be required to fit in standard size also.
3) No crane would be needed unless you want to stack them.
4) I would suggest starting in a place like Texas but outside a city. That would reduce the building code requirements.
5) Renting might be easier than finding a retail buyer. In our area, I think you could rent an 8' x 40'' for $500 a month easily.
Thank you everyone for the great responses!
Yes, I think getting regulated like an RV is better than a house. That will make it much easier to sell outside of a very specific region. I will look into San Diego ADU unit regulations too, @Marcy Moyer .
@Michael Biggs , Yes, I was looking into getting them to fir into a standard shipping container.
What are the dimensions you are considering? one level, two level? expandable? Building permits and building codes vary per city, so the RV approach may indeed be the best.
@Andrew Erickson Love the idea buddy, but you might run into some specific problems with prefab, in texas the prefab home has to be built in the state, other options seem to be too costly and im not even sure if its legal, it might be a texas thing, but id assume that there will be similar issues in other states, maybe you could just sell the plans for the different homes, and allow the end user the ability to source materials on their own. Maybe your plans have links or a "catalog" where end users could order materials as a bundle, and you just get a commission cut.
@Steve Matthews I am considering a flat packed house (kind of like IKEA) or a fully assembled home (possibly built into a standard shipping container).
@Cody Malone , thanks for the tidbit about Texas. I wonder why prefab has to be built in Texas? Seems anti-competitive. I am not really in the industry of selling info-products. My specialty is getting products produced in China and selling them in Texas. My competitive advantage is the cost of labor savings of Chinese vs US workers. I'd like to have something completely built in China: structure, finish, appliances, plumbing, and electrical. I'd only have Americans drive it from the seaport to end customer and possibly connect power and sewer.
Updated 6 months ago
I meant to say my specialty is to sell products in the USA, not just Texas.
Hi @Andrew Erickson , Ive been working on the tiny home issue in California for 2 years. There may be a few misconceptions in your model that I think I can explain.
First, the State of California has stepped into this space, big time, with laws and definitions of what is a tiny home. They issued an official memo that define a legal tiny home and says that anyone who sells a tiny home that does not meet the State standards can be prosecuted. Basically, their standards align with RVIA standards. They are very specific design standards. If you think about it, an architect designs stationary buildings. Tiny homes have to be able to travel down the road at 65 MPH. That's way beyond architectural or building standards. Our State doesnt want these things exploding,catching on fire, water or waste to come shooting out, or pieces to fall off as it travels.
Second, what is the difference between a tiny home and an RV? RVs are built out of cheap & light materials like plastic & aluminum. RVs are built to be lived in short term, like for a week or weekend here and there. Tiny homes are built out of wood, glass, tiles, granite, porcelain and the materials stick-built homes use. They are built to be lived in everyday, day in and day out, for at least 30 years.
Third, how does a person manufacture to RVIA standards, so that their tiny homes can be legally sold in California? RVIA certification is both granted to individual tiny homes and to the factory where they are built. That is, part of the certification process is that the RVIA organization goes to the factory a few times per year and inspects the manufacturing process. This makes sense because, in order to certify a tiny home they cannot go in and rip the walls apart. They have to do the inspections while they are being manufactured. Once the factory is certified, and the individual tiny homes are inspected, they are allowed to bear the RVIA insignia and be sold in California (and other states with this standard).
@Andrew Erickson I have been working on shipping container homes for the past couple of years, but maybe that should be an avenue you research, since these homes would have to be shipped anyway. It makes sense to ship them already built so that they are turn key. And the systems are already in place for logistics, there are tons of examples of tiny homes built from shipping containers, and i read an article that stated china has a plethora of them available, but your project sounds exciting, please keep the BP community updated on your progress!
@Jenifer Levini sounds like she really is well informed in this arena, maybe she should look at a summer home in texas, we could really use your expertise here!
Thanks @Cody Malone , I just visited Arlington, Texas, for the Tiny Home Jamboree in October. I loved Texas! The roads are about a zillion times better than California. And I got to eat tacos for breakfast in Austin. What's not to like about that?
Currently, it's illegal to have homes in shipping containers in California. We have so many laws here. Another thing that makes Texas seem awesome!
Yes, I know that people are living in containers here. My response is that people sometimes park next to red curbs, too...
Approach Shark Tank ?
*Edit I meant to say I specialize in selling products in the USA, not just Texas.
@Jenifer Levini , thanks so much for that info about California. I didn't know you had to have routine inspections of the manufacturing facility and that shipping container homes were illegal in CA. That makes a huge difference in my business model :-(
@Andrew Erickson I'm in the middle of building 11 new homes on 3 different sites in San Diego. I would *LOVE* to decrease construction costs like you wouldn't believe. Here's my observations, for urban San Diego at least:
1. In high value areas, developers want to squeeze every last permittable sqft out of the homes. I don't think this type of home would make financial sense in this situation.
2. You can't just drop something that looks like a house (whether it's an RV, a tiny home, or a manufactured home) on a lot and call it done. To do more than onesies here and there, developers need a planned development permit - that means you get community input, thorough review, and everything else. Lots of hurdles to deal with there.
3. In the economics of development the developed lot cost is a big portion of the overall cost. To recover that expense from the end buyer, you can't deliver a product that is perceived to be "cheap." Whatever gets built needs to be something the new owner wants to show off.
I have no idea if this would work in other states, more rural areas, or anything else ... but given current economics and zoning realities - even as ADUs - I don't see it working in urban CA, at least.
That said, I'm a fan and certainly root for anyone working in this space to make it happen!
What would these look like? Tiny homes have market share cause they dont look like rv's! Pitched roofs, porches, roof overhangs, dormers etc. You could not stack them unless they were a plain box or actual shipping conainers, so i dont think it would be worth it.
7 x 40 is 280sf(shipping container) $15k for 280 sf is $53 per square, PLUS the transport and setup cost to a site. I had a friend in south fl building site built homes for $60 a square. Now if you could deliver something like the cottages on this site
That would be amazing
I was talking about shipping them without a container. It sounds like you want to play in the big leagues. If so... you might want to consider getting a AC (Alternate Construction) letter from HUD. You would also need to contact state regulators. I really would suggest starting with Texas because by law they are required to be flexible. Here is their website...
It sounds crazy but you could fit 7250 of them on one New Panamax or 9135 of them on a Mersk Triple E Class. Of course you would probably ship much less than that at a time.
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