Investing in flat land and prefab homes?

[Sol Naim]

Hey BP community! Curious to hear your thoughts on investing in plots of flat land and using prefab homes to build on rather than BRRRRing. Seems like it can be a higher ROI as long as the land is zones properly and connects to sewer, electric etc..

Thanks for your feedback

[Adam Windham]

Pre-Fab homes should not be any more difficult to finance than regular stick-built provided it meets the same requirements. This is not to be confused with "manufactured/mobile homes", those are a different animal. The thing you will need to look out for with pre-fab is the draw/payment schedule from your pre-fab company. Typically they require an initial deposit and then subsequent payments along the way, and most construction loans only disburse when the items are on-site/installed. So you could end up with a cash flow issue, where you need to advance funds to keep the pre-fab process going before you can submit a draw request to get reimbursed from the construction loan.