Right. That is one advantage of a well-designed modular.

If a stick builder can make $40K on a $400K house, he's doing well with that.

NFW he can make $100K on a $400K house unless you own the crane, do your own foundation work, and all your finish work and all your landscaping.

Yeah I need to break everything down and really run the numbers, this was just some WAG done during break.

My uncles pay between $0-$200k for a lot depending on the situation. Its hard to get a lot for that price, but certainly possible, they do it many times a year. The most commen way is to purchase a house with a lot out back that the realtor and owners don't know about, then break the lot off and sell the house. Then the cost of the lot is what it costs you to buy and sell the house, plus getting it approved. Typical profit margin on these is $50k-$100k+, thats why you only need to do a few a year.

I know of two we are working on and they will probably go for $50k-$75k a pop. Naturaly I won't mention where they are.

The profit margin is also improved when you do all your own site work, own all the equipment, ect. As they do. We will not so its going to cost.

My goal is to break down what it will cost to stick build vs pre fab a 2ksf Colonial.

NFW a Colonial like the one pictured goes much below $400k in my city. We just sold a side ways raised ranch on a postage stamp lot, that is on a horrible busy corner across from a Getty station, not to mention one of the worst streets in the city, for close to asking. Asking is $339,900. The two lots that I have on the radar now are many times better than this.

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2023 Ram 1500
2007 Tiara 3200

http://fabprefab.com/fabfiles/home.htm



You mean stuff like that?

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-Justin

91 560 SEC AMG - other dogs dd
01 Honda S2000 - dogs dd
07 MB ML320 CDI - dd
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it's automatic.

Thats pretty much what my uncle said on the phone, also that you have to be carefull because some are better than others.

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1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

Yeah just traditional looking. NFW we can build a spec house like that in CT.

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1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

Hattie if you profit 10% you're a hero, I'm not being cocky, just realistic.

I've seen it done but there was a lot of luck involved.

Some are unbelievable, but most are above the standard for stick built. One perk is modular companies will handle warranty issues, if they are still in business.....they drop like flies.

I simply don't understand the logic of risking $360K with the potential to make $40K on a $400K sale.

Anything goes awry, including the vagaries of the market, and you're sitting on an elephant that needs food every month.

Like I said:

Good luck with that.

I don't know I have seen it done time and time again with much larger margins.

Brian its a good thing you are not a developer than.


You only risk $360k if you pay with cash, which is the best way to do it. But with a construction loan the amount you risk is much less, and considering the short turnover its a damn good rate of return. Naturaly the better the return the more the risks.

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1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

The trick is to have plenty of capital and sell many homes in a favorable market you can sell them pre-build but when it goes cold the taxes, utilities, debt service eat you alive.

Most residential builders do it because they like the lifestyle, decent hours, winters off and they simply like to build things I guess that is enough incentive for some. Personally I think the best route is to take the construction management route I think they almost always do best in the long run.

Good luck with that

The margins can be good but if you take a 10 year average it does not look so good.

Well that would be one benifit of doing a prefab, I'm not spending all this time in school to swing a hammer. If for the same money I can outsource the actual building, well then its hard to argue with that. Its all about working smart.

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1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

I don't plan on building SFH's for 10 years, I just need to raise capital. And due to my situation I may be able to leverage some relationships to do that over the next few years.

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1999 SL500
1969 280SE
2023 Ram 1500
2007 Tiara 3200

Find a rehab, specifically one that you can live in for 2 years.