Modular Home - Doing First Deal
I've made an offer for a 1 acre parcel in a fast-growing community 2 hrs away from San Francisco.
My total estimated cost for a 1850 sq ft home w open floorplan, stucco, tile roof etc is about 200k -- this includes land development, utilities, permits, etc.
New homes in the area appear to be going for about 300k.
I'm talking to a builder who has done many of these and appeasr to be competent.
This is the first time I've done construction, I'm wondering if these numbers sound good, if this is typical, any potential pitfalls to expect, etc...
The modulars from this company appear to look just like a regular stick-built home, especially with stucco, they are coded to USB. Still wondering if they will sell for same as stick-built or say 10% less.
Ideally I'd like to build say 10 of these in the next 12-18 months, selling about 3-4 and keeping the rest for a longer-term hold to get the appreciation.
One other aspect--I can put 2 homes on this lot. If I put a second home about 1300 sq ft I could create more cash flow making a longer-term hold easier. However, this might limit the number of potential buyers when its time to sell it as well.
Thanks for any insights on this scenario!
Scott,
Modulars are very good homes. I've worked in construction for many years. I like modulars I think they are a very good house. Many people can't tell the difference. Make sure you get at least three estimates from different companys. Also ask the builder for at least three references and call and speak to those www.references.I think your on the right path and I wish you good luck in your venture.
Do you know if the minimum lot size requirement for the current zoning classification of the 1 AC parcel would allow you to subdivide the parcel into 2 lots? In my area, if the zoning allows the property owner to rent out the other home, this can be an asset to a property. However, if you can create 2 separately deeded properties, I think that would be better for you since, as you already noted, some day you'll be a seller of this property and you'd want to be able to reach the largest buyer market.
Nancy bonked the nail avec hammer. It is hard to advise without knowing the community. Here in California it varies like crazy from spot to spot. Two hours from San Francisco, most important as in which direction. It is. Different as night and day.
In some Counties the Lot Split is not too bad, just papery as hell but pretty straight. In another County you have so many "intrusive interests." Old Residents that act like they fought the Indians or Looted a Mission. They can be strange in their requests and might make the lot split too expensive.
Some areas will allow a Cluster which is really what you should do if you can. But I do not know your County. There is one little ex farmy area that you can do a cluster if you are zoned RA (Residential Agriculture) No I do not mean smoky stuff, real agriculture, you know, cows and nut trees etc. etc.
A cluster is where you come in from the street of record, install a "Country Road" this is just a friendly bulldozer who cuts the road and you coat it with a little sand and a lot of little pea gravel and baby pebbles. You group your houses at the end in a fan from three to five depending on the wishes of the community. If they like Basketball then five houses otherwise it is normaly three. One in the middle could be a minister. Whatever.
Stickbuilt versus Modular. One has had its day and the other the method makes it possible to build a better house. It should also reduce the most expensive part of contstruction. That which is spent on site.
Good luck, proceed with caution. Oh yes, during the course of construction. Be there. Not only will you learn but next time you be the builder. Its fun.
Lucius.... 8-)
thanks for the gems of wisdom on this topic! In Lake County, where we're currently looking, I think a lot split would be difficult, as it's a flag lot with only 20 feet on the road, and each lot is supposed to have this 20 ft. Perhaps we could try for a variance to share a driveway between the 2 lots...
The cluster sounds very interesting, I'd be interested to know where have you heard of these being done?
I think we're leaning towards selling the lots on which we build 1 home, and where we can do 2 on a property do1 larger, 1 smaller, and use the positive flow to more easily hold them for say at least 5 yrs for appreciaton.
I will be there for the construction and will soak up everything I can.
It seems that certain areas come and go very quickly in terms of the numbers/margins working the best. Does anyone know a good way to identify these currently hot areas, or happen to know of any areas that are good to look in now? I've fond a few through footwork, looking at data on the public MLS sites, networking, etc.
Also trying to figure out if stucco and/or tile roofs are worth the price...(5k stucco, 8k tile roof)
I think modulars are the future as well, more efficient way to build...I think the more ways one can eventually customize them the better to get a more personal feel...perhaps we'll eventually have virtual reality walk thrus in the designing phases and really be able to see what the various options look like.
thanks,
Scott