Modular/Prefab homes advice needed

[Mayer M.]

Hi, My partner is hung up on buying a lot in South Jersey and putting and modular/prefab home on it and then either rent or sell it or perhaps keep every other one as a rental. Can anyone provide any insight on this subject? I have zero experience in this, but do have experience in flips and BRRRR. Thanks!

[Eric Teran]

I built my modular home a year ago and it is worth it. I wrote a BP blog on why modular is great. Here is the link, https://www.biggerpockets.com/blogs/9522/68289-i-love-modular-construction-and-so-should-you

With that said Remember that $50 SF is only for the modular portion of the home. You final cost will be around $100 and maybe more if you hire a GC.

Additional expenses
1. Permits
2. Profesional like and engineer or maybe an architect. Surveyor, civil engineer.
3. Site work which is maybe you have to build a sidewalk in front of your lot or a driveway or any landscaping, etc.
4. Utilities. hook up from the water meter to your house, electrical, sewer or septic and gas. This can get expensive.
5. Do you want a basement?
6. All the foundation and footings.
7. Temp equipment like a dumpster or toilet or tools from Home Depot.
8. Will your lot fit a stock modular plan or are there customized portion that an architect has to get involved? If you read the modular blog post I linked above you can find another post I did regarding zoning and everything you should ask for a lot or new building.
9. What level of finishes are you choosing?
10. Are you going act as the GC or will you hire a GC. This adds a lot. Usually 10%.

So $50 SF becomes more like $100 SF. Don’t let all of this scare you but there is a lot that goes into building a new house on a vacant lot.

The key to building in lots is finding a cheap piece of land in a good neighborhood.

Hope that helps.