All Forum Posts by: Richard Lee

Quote from @Raju Balakrishnan:

Any update on this? Is there anyone who bought a modular/shipping container home abroad and built in CA? By now I know there are several folks in TX etc using homes shipped from china. I am specifically concerned about point @Richard Lee is making. Does that mean I should look for a approved by CA stamp, even for a US/canada modular provider? 

Can you tell me more about your contacts building in TX using homes shipped from China?  I've finally got several homes approved by the state of TX that are being built in CA and it's been a regulatory journey.  

If you are building modular in CA, the question you need to ask your architect or the modular building provider is if their factory is certified in CA and if the plans are certified for CA. Short answer is yes. If you build in CA, you need to look for CA approvals. Please reach out to me if you want to learn more. Modular building is a good solution but there are nuances for obtaining ROI. Modular does not mean cheaper.

Hi Grant.

The first thing you should do is approach the planning department and ask questions on zoning to see what you can build on your subject lot, whether already acquired or targeted.  You can find out what you can build by right or if other clearances are required (historical, hillside, etc).  The planning department should be able to provide guidance on land use, ordinances, special use.  

Once you identify what you can build, you can work out a proforma to capture soft cost, hard cost, fees (building, loan, applications -- the list is long). Keep it high level so you don't get stuck in the details.  If it passes the smell test, then start drilling down to more accurate numbers.  (sorry this paragraph won't be as helpful)

Regarding prefab and modular, I work for a modular prefab company based out in California. My biggest advice is to understand your approval process.  Depending on which company you engage with, make sure whatever you order can be delivered. Make sure you understand how the product is being assembled in the factory vs at the site.  Depending on the product, the approval process may be different whether it involves State or Local or both.  Modular prefab housing financing also has a different draw schedule so not all banks will loan on it.  Ask for finance options early on and make sure you are adequately covering your costs and that the bank is OK paying for an item that isn't delivered to the site yet.  Do engage in a GC early on so he understand how he/she is to craft their scope of work around the pre-fab portion.  Getting total project cost (site bid cost + prefab cost) will help speed up your financing process.

Hope this helps.

Quote from @Anthony Casa:

Not looking for anything fancy/too upscale. Just a market rate build out of a traditional single family home. 

 Break down your costs based on 

1. Prefab portion (prefab company responsibility)

2. Site built components (Foundation, hard scape, soft scape, utilities, others — by site general contractor)

Quote from @Corey Philip:

I am looking into acquiring a home with enough yard space to put a prefab guest house on that I could rent on AirBNB.

What do I need to know to start planning and budgeting this?

- Checking with planning and zoning.

- What needs to be done for foundation for these things?

- Do these things get shipped across country or do you find one locally?

- What needs to be done for utilities? I'd some electrical upgrades probably need to happen on the property. Possible upgraded septic if no city septic.

Foundation type will be determined by soils engineer, which would also inform the type of septic system. Electrical upgrades depend on specified appliances and would recommend you review the main home too since you are most likely connecting to it. 

find a local prefab company. Shipping costs escalate if the delivery is far.Prefab companies usually provide insight to it. 

Def check with planning and zoning mainly to confirm siting and parking requirements. 

What city is the project located in? Some lots might be subject to additional review if it’s near wetlands or protected lands.

Finally, check lender terms for a prefab home product. Funds are distributed differently than a tradition construction loan for stick built.

My previous post got deleted for proposing my company. I didn't read the posting rules..my mistake.

I direct design and project permitting for a prefab home company.

1. Please check with your planning department to see if you can build the home or structures you want to without variances.
2. Check with the prefab companies you are considering to see if you can get the product/s delivered -- think logistics
3. Understand what design can or can't be done with the prefab company. The products all have limitations.  Since it is a relatively 'hot' field and there many more companies offering services, ask them for a previous project that is most similar to yours.  And also ask if you they can set up a visit so you can see that project in person.
4. Set an expectation between the company and yourself to understand timeline.
5. Ask for a realistic estimation for site total cost, foundations, sitework, landscape, utilities.  Prefab companies can help you control the cost of the structure, but the site work is variable (out of their control) unless they specifically part of their scope of work so that's where projects usually die.  Different soil conditions trigger different foundation designs, and sometimes it's too late to know what soil condition you have during an escrow because the timelines don't match up, unless you work it into escrow terms.
6. Line your consultants up. It doesn't make sense to save a few thousand when you're building something very expensive.  Think of it is as an insurance premium on your project that actually pays off if you assemble the right team.
7. Don't assume anyone has a scope of work figured out, and ask the obvious question even if it's been previously answered. There's a lot of communication and important info gets looked past, unintentionally.

I didn't cover everything here, but it's enough so you can make a safer decision.

Good luck.

Quote from @Dante Quilici:

This is my first time posting to this website, though I've enjoyed its content for a while. 

I'm considering buying a plot of land in Montana/Wyoming/Idaho and placing a nice prefab home on it. Does anyone have experience in this field? I'm not exactly sure where to start, which questions to ask, etc. I also want to know if it's cheaper/easier to just buy a property with a small home, demolish the home, and build a house from there. This may avoid zoning/electricity/utilities/etc. issues. The goal would be to put an AirBnB on it (i.e. short-term/vacation rental). I'm looking for any advice/materials you guys may have on this.

Thanks!

Are you still interested in learning more? I run the design and permitting/project management department for Connect Homes and we specialize in single family homes, ADUs etc. our aim is to simplify the process.. check out the company IG account for some inspiration. https://instagram.com/connect_...

Quote from @Lisa Pelegrin:

I'm making an offer on a property in Athens,GA that's going to turn into a complete tear-down.  Since I have zero experience in home building and managing that, I've started researching into prefab homes.  I have reached out to a company for quotes, but I know they'd probably give me the rosy picture, so I wanted to ask you folks for your input.

For those that have used prefab homes, was the process of building fairly easy?  What company did you use or which ones would you recommend?  Are there any pitfalls I should keep an eye out on?

Thanks in advance for your advice!!!

Hi Lisa. Since you are making an offer, understanding your zoning and planning rules is as important as logistics for delivering the product. Depending on the manufacturer, they may or may not be able to do so. Engaging with a prefab company as early as possible is important, especially if you are new to building since the companies usually have more to gain by assisting you and your realtor on finding the right lot. Financing is also different since the draw schedules are different from traditional construction loan templates. I direct the design and permit department at Connect Homes so I see a lot of pitfalls. Rosy pictures in the construction industry always make for bad endings and I prefer not waste people’s time when it comes to building. Communication and setting expectations is what you need to find in a building partner. Let me know if you have more specific questions.

Quote from @G Harrison:

@Vinny Sandilya- Did you make any further discoveries? Looking to do the same, buying from Alibaba that is. 

 If you are planning to go this route, please make sure you clear prefab plans with the state inspectors. Prefab container homes built in a factory need to be certified by state and reviewed by state representatives during construction (within the factory). Savings you’re trying to capture by going Chinese may very well be neutralized if you have to send an inspector to a Chinese factory to perform inspection and certification. Generally, this would be ok if you are building at scale and planning to build high quantity of modules, which would eliminate single family homes or ADUs. The local building department would have nothing to do with the prefab certification process since they are focused primarily on site-built foundations and construction. 

Quote from @Ryan Garant:

Does anyone know of a modular home (not mobile) company that does not have a crazy year plus lead time to delivery? I’ve called a few and some have even said there is a two to three year waiting period citing covid + high demand + supply chain issues. Part of the reason I’m looking into this is for speed over traditional stick built homes :)

I do a lot of planning and scheduling for design, project management, and permitting for Connect Homes, a modular prefab home company.  I ushered homes through the design, permitting, and build time in less than a year in CA.  This Idaho project would be a first for us, although we’ve recently seen an uptick in interest from the state. Would you like to connect [no pun intended] to see if we may be the right fit? I’m new to bigger pockets so I may be late to see a reply. Good luck!

Quote from @Kevin Romines:

The primary issue is carrying costs. With a modular builder or panelized builder, you must make a large deposit or in some cases pay the whole costs at the time of order. So you will be carrying these costs while the order is being made, shipped and finally placed on site. Conversely, a site built home, the borrower is typically only paying interest on the amount of the loan that has been disbursed at that time. 

The lead time on Modular along with all other lead times in the construction industry, went through the roof with COVID and the following supply chain issues. The advantage on Modular is that you can lock in your costs at the time of order (with most factories). Whereas a site built home doesn't necessarily have those same types of protections.

I hope this helps? 

Few banks will loan on a prefab home based on a disbursement schedule that works with the manufacturers requirement for deposits in order to secure long lead items. Cash is always king and affords the most options but that unfortunately isn’t for everyone. Homes built with loans also cost more when paying for the same product due to ‘risk.’

Regarding supply chain, it is surprisingly manageable depending on how the company is structured and what product options are available. Lead times are plotted and it’s clear how fast the home makes its way through the line. Prefab is advantageous to lock in the budget during signing of purchase order. Who doesn’t love a fixed cost?  The more variable levers  are site contractor availability, their pricing, and clarity of contract docs for the site GC to deliver the foundations prior to the completion of home.