New Construction: Pre-Fabricated, Modular "Container" Homes

[William Savage]

I several questions for any investors who have experience with pre-fabricated/modular/shipping-container type of homes. (Single family or Multi-Family).

I'm considering the idea of buying a vacant lot in any given Denver neighborhood, (Curtis Park, Cole, Berkely, University, etc.) and putting in a pre-fabricated home. The thought here would be to try to sell immediately. 

Generally speaking, pre-fab homes come with existing HVAC and Electrical systems, flooring, insulation, etc. and some brands even promise they will meet the specs for the local building codes anywhere on the continental U.S. 

Additionally, some of these homes even have garages, solar panel connections, etc. 

Current estimate I have shows:

I understand they require the use of a crane to erect, and will need to have some form of foundation/slab on grade. 

From all research I've done, everything from academic articles to news articles etc., is that these homes are cheaper, reduce the need for architects, various contractors, and dramatically reduce building time. (10 weeks from start of fabrication to final completion on-site).

• Price for these homes: $(100k-180k) ~ ($120.00/SF - $150.00/SF)
• Price for vacant lot: $(100k-300k) ~
• Misc. permitting, appraisals, brokers, etc. : $(15k-20k) ~

I see a lot of delta here between a potential final asking price and a total project cost.

All in all, I think that there is a market for this type of modern, "environmentally friendly" type of home, and I've seen news-stories on successful storage container homes that were built in Denver.

Should I believe all of the hype, or am I drinking too much kool-aid? Is there any real difference here or is it no different pursuing building a stick-built home?

Please let me know your thoughts, particularly if you have direct experience with this type of home.

Thanks!

[Jason Lewis]

We've ran every number we can on modular type buildings for both single family and ADU here in Denver and it simply doesn't work out. We have multiple MX-3 zoned lots as well as CU-1 and CU zoned lots and we haven't gotten a single one to pencil out. We've met and spoke with about every modular builder from out of state that could ship something to CO. I'd love to talk to someone who is a true investor who's made it work. The few people who have made it, its been their passion project and made it work as a one off sweat equity standpoint but from a true investment and scalable model, I've yet to see it work.