Input on prefab new construction

[Robert Ellis]

Curious to hear about everyone's thoughts on a project we are completing. Right now I bought a piece of land last year for the great price of $8000 in clintonville. one of the lots along the tracks with height restrictions. Ironically someone called me up when i bought it and laughed and said, "you'll never be able to build a house there."

Well, low and behold, we just got approval to build a single family ranch home. 1188 sq ft 3 bed 2 bath. I'm doing pre fab construction (built in a factory and put together in pieces). It is still zoned as residential, still looks like a normal house, still can get traditional financing, it just can be built much quicker. 

The question I have for everyone is we are on the market right now as a "new construction" home. Do you think i should build the home first? a lot of the feedback we are getting is about how it is just an empty lot and hard to picture. We aren't really changing design or plans. So i'm wondering if i should just build it as a spec first. I could rent it out if it never sold at just enough to cover the mortgage, principal, taxes, and interest (all in estimated at $1250 a month) and rental amount would be around $1400. 

The only thing holding me back is the lot is zoned R3 which would allow a 3 unit to be built on it so if i couldn't sell the property I'd almost rather build a multifamily property prefab construction. Each unit could rent out at 1000-1100 per unit and i'm sure could be built for less than $100k per door. 

Below is a rendering of the prefab home for how we are marketing it. No basement, sits on a crawl to save costs. 

[Karen Margrave]

It seems to me that you're not getting the highest and best use out of it if you aren't utilizing the lot to its full zoning potential. However; you didn't mention the size of the lot, therefore; the fact that it's zoned R3 doesn't necessarily mean that it works for that purpose. 

Without someone knowing your market, it's impossible to give advice on what is best. Is there a high demand for rentals? Are there a lot of homes for sale? What will your price point be in comparison to others? Is your area appreciating? There's many things that go into determining values and best strategy for you. 

As to what to do, you can put the rendering on a sign and try to sell it from that. However; with it being built and assembled on the lot, I'm sure it will probably still be considered manufactured housing, which by the way is a cost efficient way to build and in many instances more energy efficient.