Modular Home flip model

[Alex Kouramanis]

Hello fellow investors!

My partner and I are flippers in Ontario. We are investigating a new business model and wanted to know if anyone is already doing this and if they would reach out to share their experience.

The model is as follows: Buy land, clear it, add well, septic and a foundation or pad. Then, buy a high end modular home, plop it on the land and sell as a new built home.

Obviously there will be little details here or there to work out, but pretty simple, straight forward model. Just wondering if anyone else has done or is currently doing this and what their results were.

Thanks and happy investing!!

[Sam Hanaa]

I didn't , but wounder how much the lease will be to host that house as lands around GTA are expensive.

[Hai Loc]

Alex Kouramanis

Biggest question here is does a new modular home fall into Tarion guidelines. I think it does. Someone with a Tarion license needs to own at least 10% of the property. Only alternative is owner to live in the house for a minimum of 12 months which will qualify it as a spec home.

Aside from this in terms of a profitability perspective. I have seen prefab modular homes that have a cottage feeling where you can plot in rural areas, preferably outside the GTA where land values are low and residents can relate with that kind of build.

I think it will fail miserably in areas where land values are much higher where buyers expect much higher quality homes. Also consider the cost to install septic tank and water well.

[Rolando Vallarino]

Yes I've thought of doing this many times. In theory it makes a lot of sense in my mind. I think the difficult part is building a large enough home while still making it easily transportable. Depending on the zoning some districts require minimum sq ft which easily exceeds say 1 or 2 containers for example. So you'd have to fit together different modules and assemble them on site.

I think the key is to not make it look like a mobile homr. If you could built a great looking and unique modular home you can build elsewhere and assemble within a week at the site I think it would work. Once you do it once I bet it would get a hell of a lot easier the second time around as it's relatively unchartered territory. I don't see many people doing it and they would be great for airbnb.

[Paul Sofia]

I am currently doing outside of Charlotte, NC but I am not going with really high end homes.  I am also stick building.  The mods are a lot quicker.

[Jim Peterson]

@Paul Sofia Paul, it is great to find someone that has actually completed a modular project. Did you hit any snags in the process and did you hold the properties or sell?

[Paul Sofia]

I have hit snags like any other construction project but that comes with territory.  Once you understand the process, it is pretty routine.   I sell them.