Investor · Victoria Texas · Member since 2024 · 7 posts · 5 votes
As a former CPA and attorney who managed a distressed property investment fund, I've analyzed countless real estate opportunities. Today, I want to share why I've pivoted to developing container home senior communities and the investment analysis behind this decision.
Background:
Running a distressed property fund taught me to identify undervalued opportunities and market inefficiencies. After exiting that business, I began exploring innovative solutions to the growing senior housing crisis. This led me to container home development.
Key Market Factors:
Senior housing demand is outpacing supply
Traditional construction costs are skyrocketing
Fixed-income seniors need affordable options
Sustainability is becoming a critical factor
The Container Home Advantage:
20-40% lower construction costs
Significantly faster build time
Durable steel construction
Highly customizable
Lower maintenance costs
Sustainable/recyclable materials
I've already completed one container home conversion and several studio/guest houses. The insights gained from these projects have validated our initial assumptions about cost savings and construction efficiency.
Future Vision:
We're now developing a complete senior community model that combines:
Affordable container homes
Community-focused design
Sustainable practices
Scalable business model
Investment Perspective:
From my fund management experience, I see three key advantages:
Lower capital requirements than traditional development
Faster time to market
Multiple revenue streams (sales, community fees, services)
I'm sharing this to start a discussion and get feedback from the BP community.
Questions for discussion:
What challenges do you see in this model?
Has anyone else explored container homes for senior living?
What factors would you consider before investing in this type of project?
This is quite an interesting concept! I've always found containerized buildings to be aesthetically pleasing for some reason. I've seen concepts of tiny homes having been built from storage containers, but not entire senior communities. The only random thought that come to my head was I Just thinking about lateral versus vertical scaling. Would likely have to have a larger plot to account for growth vice a vertically- scaled arrangement (I'm thinking like condominium-style where the real estate is multi-story).
This is quite an interesting concept! I've always found containerized buildings to be aesthetically pleasing for some reason. I've seen concepts of tiny homes having been built from storage containers, but not entire senior communities. The only random thought that come to my head was I Just thinking about lateral versus vertical scaling. Would likely have to have a larger plot to account for growth vice a vertically- scaled arrangement (I'm thinking like condominium-style where the real estate is multi-story).
Investor · Victoria Texas · Member since 2024 · 7 posts · 5 votes
1y
Hi Grady, it would be a much different cost profile to try to build to the same scale as the large senior communities wouldn't it. I'm not sure how that would work, but I am guessing that another factory housing type would be better for urban housing. Maybe something like what Toyota is doing with prefab building. The development that I am working on is more rural, where land is available and seniors live in more isolation and have a harder time connecting with their rural neighbors. I am also counting on a few 55+ seniors selling their homes to escape the city (Austin, Houston, Dallas) for a more affordable community where their retirement savings will go further and where they can connect with other seniors. Thank you for your thoughts. Tom.
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
1y
Neat idea...I hope you can make it work. I'm a fan, but you asked for feedback so I'll ask you the questions here that I would be asking when you pitch me.
What size container do they get? Is it one 8x40? Do they buy it or rent it? How easy would they be able to resell? I love the concept. You can do some really cool, unique, and creative designs with containers.
Do seniors want to build/buy in a rural area vs city area? As I look forward to retirement I have often debated with myself this dilemma? Do I give up access to transportation, restaurants, cultural activities, doctors, emergency medical care, religious and business activities, vet care and maybe more, to live in the country on my ranch or on the beach in a beautiful country, or do I keep access to all those things and live in the city? Still haven't made that decision and not convinced I want both places...maybe a condo in the city and a ranch home in the country? I also think sometimes would I want to live around a bunch of old people or would I thrive more from being around a mix?
I see a few abandoned nursing home type places in rural areas, and always think as I drive by, would a good repurpose of them being senior living, or veteran living, or just plain affordable housing living? In some of these towns I wonder if there are enough people? or could we get people from the surrounding areas. People who no longer want to take care of a big house and a big yard. I see enough of these, I think it must not really be an option or some young entrepreneur would be taking on these projects.
Are they big enough for me to have the kids and grandkids stay over?
One thing I think I would do is either hire a professional market research company and/or get a local high school or college marketing class to do market research and surveys to see if there is interest and demand. I think another idea is come up with some renderings and a slide deck and go make presentations at the closest senior centers, Rotary and other service clubs, maybe several nearby chambers and see what kind of interest there is. Sounds like you have thought out a lot of this, but maybe also hold a competition with a cash prize at your closest architectural and design school.
Can you build it cheaper than someone like this? https://www.torooakpoint.com/ They call them mobile homes, they look like mobile homes, but they're stick built on slab. The community actually looks pretty sharp for what it is. They build on site.
One thing you mention is construction costs. Are costs really lower with a container? You still have flooring, cabinets, bathrooms, plumbing, insulation, paint, etc, so all that cost remains the same it would seem. The only difference is the structure? So let's just say you bring in a container vs stick build. What is the cost difference?
Fixed income...would container village actually be a cheaper proposition vs lets say a senior living 3-4 story apartment building for the same number of units? Which is more cost effective/efficient. Would a container community be more sustainable than an apartment complex? How so? Is this really a critical factor in seniors choosing retirement homes. I would question if it is even a top 10 factor for most.
Is the build time actually faster? Are you putting the containers on slabs or piers? Same size house I would think slab or piers for container vs stick built would be same time frame, Framing is probably a day on stick built vs hiring a crane to place a container, so I'm not really sure build time is faster. Are they really any more customizable than a stick built house? Are the maintenance costs really lower? How so? Maybe it is more if you paint them vs hardie board siding? You have recycled the container which is good, but is anything else more sustainable or recyclable vs any other type of build job?
Is it really any more scalable than any other type of construction? Why would that be?
Why would capital requirements be any less than traditional development? I would actually think they would be more? I hear frequently getting financing for container home type projects is tough if not fairly impossible vs traditional construction financing, so wouldn't that take more capital? Why would it be faster to market vs any other kind of development. Before you get too far, I would go talk to every local bank and credit union in the area you want to do this. Ask them if they would consider financing this type of project. If they would consider, what kind of leverage would they offer?
Personally I don't think this lends itself well to the fund model. I'm trying to figure out in my head how fund model would make sense in this type of community. How fast am I going to get my money back? I'm just thinking for example apt build. My fast math, is I can invest in 350 unit apartment complex. Two year build, 1year lease up. Start earning return in 3 years. Let's say on your concept cost is exactly the same per unit. Can you build and sell 350 in 3 years and then give me lifetime revenue stream on I guess lot rents for the rest of my life or do you exit year five? So do the investors or the seniors own the land. Is it affordable on fixed income to have $400-$500-$1000/month lot/community rent?
Good luck and best wishes and post pictures of your success in a year or two.
Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes
1y
What is the capital markets for this type of housing? Are there lenders that will lend on the product at competitive rates that are similar to current 30 yr sfh amortization? Imo, this is the critical element. I don't think that it would be wise for an senior to invest their life savings in a house where there is very little return, if any. It sounds very interesting though!
As a former CPA and attorney who managed a distressed property investment fund, I've analyzed countless real estate opportunities. Today, I want to share why I've pivoted to developing container home senior communities and the investment analysis behind this decision.
Background:
Running a distressed property fund taught me to identify undervalued opportunities and market inefficiencies. After exiting that business, I began exploring innovative solutions to the growing senior housing crisis. This led me to container home development.
Key Market Factors:
Senior housing demand is outpacing supply
Traditional construction costs are skyrocketing
Fixed-income seniors need affordable options
Sustainability is becoming a critical factor
The Container Home Advantage:
20-40% lower construction costs
Significantly faster build time
Durable steel construction
Highly customizable
Lower maintenance costs
Sustainable/recyclable materials
I've already completed one container home conversion and several studio/guest houses. The insights gained from these projects have validated our initial assumptions about cost savings and construction efficiency.
Future Vision:
We're now developing a complete senior community model that combines:
Affordable container homes
Community-focused design
Sustainable practices
Scalable business model
Investment Perspective:
From my fund management experience, I see three key advantages:
Lower capital requirements than traditional development
Faster time to market
Multiple revenue streams (sales, community fees, services)
I'm sharing this to start a discussion and get feedback from the BP community.
Questions for discussion:
What challenges do you see in this model?
Has anyone else explored container homes for senior living?
What factors would you consider before investing in this type of project?
Looking forward to your insights and questions.
Tom - this is a really cool idea. Here's where I'd poke a hole though: providing care. Individualized container homes would be ill suited for assisted living style care. So a community of these homes could definitely provide an affordable downsized housing option for active seniors (independent living style) - especially when you provide amenities on site, which will be required if you want to compete with other independent living style communities and apartment buildings. But separate disconnected units wouldn't be economically efficient or even feasible for assisted living care once they need it.
Independent living with assisted living nearby or on site for a transition could work well though! Just my thoughts.
Investor · Victoria Texas · Member since 2024 · 7 posts · 5 votes
1y
Hi Bruce, thank you for your thoughts and for the questions. They are really good points that I have spent many years working through. I got interested in senior housing in 2015 when I helped a friend put a financing deal in place for a Green House project in Tennessee. That led me to Nancy Fox and Dr Bill Thomas, the leaders in senior housing innovation. I worked with Nancy for several years developing a real estate model for Kallimos Communities where we developed a model that drew on Dr Thomas’ innovations in nursing home care and what he called Green House 2.0 that would further personalize senior care. Our model also relied heavily on Ross Chapman’s work on pocket neighborhoods, Charles Durrett’s work on cohousing and Nancy’s work on building community in a senior living environment. My role on the team was to develop a model for the real estate and when the pandemic of 2020 ravaged senior living, our work was disrupted as building in the industry paused.
My work with Kallimos Communities made me aware of the complex web of factors like geographic isolation, workforce shortages and limited transportation options that make providing adequate senior care in rural communities an intractable problem. My wife and I decided to move to our land in South Texas and I was able to observe the problem up close and came to embrace the vision of the National Association of Area Agencies on Aging. USAging believes that every person should be able to age with optimal health, well-being, independence and dignity in their homes and communities. To achieve this, rural areas need innovative infrastructure and values that supports people as they age. I believe that I can help support this vision through bringing attainable and affordable housing to rural areas and help with fill the services gap by what Nancy calls “social capital” rather than financial capital. Village to Village Network (https://www.vtvnetwork.org/) and Men’s Sheds Association (https://usmenssheds.org/) are successful models of people building community to improve the aging experience.
So drawing on Dr Thomas and Nancy’s work and incorporating cohousing and pocket neighborhood elements into my communities, I have chosen to use shipping container homes in areas along the Texas coast where storms frequently cause wind and water damage. My cost to build a 900 sf to 1,200 sf container home is about $90 / sf and that cost comes down in a production environment where materials can be purchased in quantities and the workforce is working on a standard floorplan with multiple units in process simultaneously. Because these communities would be in smaller towns and rural communities, the licensing jurisdiction is the county, meaning that code requirements are more often vested in the fire marshal and are less onerous than city requirements for the buildings and the site improvements. So utilities, roads, drainage, entries and other infrastructure costs are lower than in a suburban development. As Bill Thomas says, “the greatest amenity in a senior community is community”, so investing in things that will promote togetherness and cooperation are high priorities for the population that I am addressing.
The funding model also relies upon bringing together different groups and structuring deals to meet their diverse objectives. For profit and not for profit investors can be brought into the financing structure to work together to meet the needs. I will be happy to share structuring for the capital requirements and operations for various fund objectives. Thanks again for sharing your perspectives Bruce. They are very helpful.
Investor · Victoria Texas · Member since 2024 · 7 posts · 5 votes
1y
Hello Aaron, There are conventional loans available to owner occupiers for shipping container homes. One of many examples of lenders is Fairway https://www.fairway.com/articles/how-to-get-a-loan-for-a-shipping-container-home. But I agree with you that seniors would not be wise to buy a home if the return on investment does not make sense. An interesting trend in the senior housing industry is that the average stay for a senior in a traditional institution is shrinking due to the costs of the services. Operators tell me that the objection to the costs are from the children of the elder who don’t want mom to spend down her savings, fearing that she will run out of money and that there will not be any left to pass down to the kids. So building housing that will both provide mom with a safe place to live and a good life experience is hard. The problem is that the number of middle income seniors, aged 75+ years old will increase from 8 million to 14 million in 5 years (by 2029). Most will have health needs (1 million will have cognitive impairment, 9 million will have mobility limitations and 3 million will have “high needs”) . Of these 14 million, 81% will not have the resources to pay for assisted living and care which is now at the cost of $62K annually. So then 86% of middle income seniors remain at home and 25% of them are cared for by a family member. Building an environment where people can safely age in place and obtain needed care makes for difficult family decisions. My aim is to help a few families with options that will help. Thanks again for your comments Aaron.
Investor · Victoria Texas · Member since 2024 · 7 posts · 5 votes
1y
Hello Charlie, You are right that a community of individual homes is difficult for delivery of daily care for assistance with mobility issues and cognitive decline. Nancy Fox, a leader in the Changing Aging movement was the first administrator for one of Dr. Thomas’ Green House Project homes. After decades of work in the industry, and in Green House design and administration, she is very comfortable with the model of establishing relationships with a home health provider for on-site care. The home health services industry struggle with the cost of providing services where clients are spread across a geographic area. In Nancy’s model of a Kallimos Community (https://kallimos.com/), caregivers are able to manage multiple clients without down-time spent traveling. Since the home health is provided by a third party, the community does not need to be licensed as a care facility, so costs related to regulatory compliance with inspections and staffing are facilities are not added to the cost of care. In Nancy’s opinion, this care model, combined with the social capital of a cohousing community when properly supported with trained staff can result in quality care. But since I am not an elder care specialist, I have to defer to Nancy and Dr. Thomas for help in building a care component for a community based upon the community’s individual resources, needs and social structure.
