Is this Modular Duplex a Good Idea?

[Nathan W.]

Hi, I’ve been analyzing dozens of properties in two particular markets I’m interested in. I’m ready to get off the sidelines but I keep running into some obstacles.

First the local housing market is booming and due to a housing shortage and these low interest rates real estate prices keep climbing. Deals are few and far between and any decent deals that cashflow favorably are getting snatched up quickly.

This leads me to explore another option... I personally live in a modular home. I really liked the modular process. It’s very efficient, high quality, customizable, and affordable.

I spent a lot of time before committing to the modular home process. And in addition to it working for us personally it also seemed to make sense financially.

Unlike manufactured homes that do not appreciate, the modular homes are technically appraised as a regular site built home since there is no trailer, it’s built up to code and has a permanent foundation.

My contacts have gotten me a quote for a modular duplex 3 bed / 2bath each side and I can be all-in with land for $195k. This equates to $85-90/sq ft. The local market is currently averaging $122/ sq ft.

So my questions would be:

1. Has anyone gone the modular home route for investing?

2. From research and talking to some individuals in the industry, modular homes are supposed to appreciate like a normal site built home, but does anyone have any firsthand experience with this as being true?

3. Does anyone have any cautions on this approach? On paper it seems to make sense, but this would be my first deal and I want to make sure I’m not missing something :) If you’re interested in seeing the number and sharing feedback here they are... https://app.dealcheck.io/#!/shared/-MNVioVAmX_-taJu90LZ

Thanks for your feedback.