All Forum Posts by: Account Closed

I'm looking at putting an offer in on a property utilizing an FHA loan. The property is on the market as a 3-unit, has 3 renters currently in it and probably has for a long time. The area however is zoned single family and only one unit appears on the tax record. I've toured the property and it's in great condition. Separations were clearly made over the life of the property but everything appears to be in sound order. There is an unpermitted bedroom addition in one of the units and there are three full kitchens on the property.

I need the FHA loan up to the 3 unit lending limit to really have chance at this and I think it will come down to the appraisal. What will the unit count in the appraisal be based on?

Depends how it's recorded I think. You need a development and disposition agreement that will give you power of attorney to be able to be the responsible party. Consult a lawyer

Like I said I believe it's a better construction method, yields higher quality buildings, is not often cheaper but is hardly ever more expensive. One thing it is for sure is faster. If you can't make that profitable it's not the system that's the problem...

What? 

Modular homes or buildings in general are just buildings that are built off-site in shippable sections, or "modules." These are built to International Building Code vs. a "Mobile" or "Manufactured" home that's built to Federal HUD (Housing and Urban Development) Code. That's the main difference between modular/pre-fabricated and mobile/manufactured.

There may be some mobile home builders that also offer their floorplans as modular builds and can provide them, often to meet local zoning requirements. It's tough in a lot of places to put a mobile home. 

In any case modular buildings, including homes, can be nearly anything you'd like them to be, Traci. Custom modular homes are not that uncommon. I'm a big believer in modular construction and have been working with it for a long time at this point, I'll tell you what I like about it:

Modular construction should be a better construction method in general. The structures are built under controlled conditions in a factory. This leads to benefits such as materials not being exposed to adverse weather conditions (nor workers), better quality control and a clearer chain of custody throughout the building process. Many modular manufacturers generally keep their production lines running to keep the lights on so they'll have higher worker retention than a typical general contractor. 

Modular projects will typically be built much faster than a site-built project. The speed can account for savings in construction financing, general conditions and a faster occupancy, lease-up, etc.

A wood framed modular building uses about 30% more wood than its site-built counterpart due to redundancy in the structure. There's a wall on each side of where two modules meet, for instance. This results in strong acoustical and thermal performance and a sturdier building.

36 States in the Country have a factory built program that really streamlines permitting and inspections where the State is the authority having jurisdiction over the off-site portions of the project. This means the local jurisdiction isn't approving plans for anything built off-site nor inspecting those portions of the project once they arrive on-site. 

The challenge I find in my market is in the manufacturing base itself. It's hard to attract a factory to want to build a custom one-off project such as a single-family house or any project that's not at scale to gain efficiencies in the manufacturing process. I don't find much cost savings with modular projects until a real economy of scale is realized.

I think it'd be worth your time to look into. Below are some links to some other threads regarding modular on BP that might help you:

https://www.biggerpockets.com/forums/44/topics/645...

https://www.biggerpockets.com/forums/44/topics/634...

https://www.biggerpockets.com/forums/223/topics/47...

It seems many of you have this impression that modular homes are only off-the-shelf products. You can get custom modular structures built. They can take any form. Modular duplexes certainly do exist. I might challenge you all that our built environment probably isn't best served by the same building being placed everywhere. Modular is a big term with a lot of benefits if it can work for you. On a small scale like a duplex it's seldom less expensive but should always be faster leading to faster occupancy, less general conditions and less financing costs. 

@Marzieh Rostami I called it a BBRR. Buy, Build, Rent, Refinance. 

It's similar in strategy but you may need several loans to make it work: acquisition, construction and permanent financing. Most lenders like to have a building permit before lending on construction. There are owner-occupied loans for building up to 4 units with FHA that may be worth looking into if that's the route you're going but they have a lot of hoops to jump through as well.

This must be very market specific and certainly isn't the case in my market.

My cleaners won't travel to Mira Mesa. You can ask for referrals in this facebook group if you'd like:
https://www.facebook.com/groups/SanDiegoAirBnBHosts/

Business is good.  

I've since ditched the Z-Wave locks and gone with "igloohome" locks. I like these for a few reasons:

They require no connectivity past the initial setup via bluetooth to your phone. You can sync them with AirBnB and they'll algorithmically  generate codes based on a guest's stay and issue them duration based codes for their itinerary. They also email the guest the code at a time you define before their check-in. The lack of necessity for connectivity means the batteries last longer. I had a lot of issues with range and loss of connection with the Z-Wave equipment. I think it's a pretty poor protocol. 

Sounds like it will get you what you need. A longer escrow where you're not making payments to get the property to a place it can be financed sounds better.