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Modular Home Timeline
Build Your Own Modular Home?
Because about 85 percent of a modular home is built in the factory before it arrives to your lot, many homeowners opt to be their own general contractor. This indeed has many advantages in additional cost savings and as well as control. By applying for a “sweat equity” finance loan there is a degree of savings, and overall being your own contractor can save you 10 to 30 percent in expenses. This makes this option attractive for some.
However, you will be earning your savings as you handle the tasks for which the builder is responsible. You will either complete or arrange subcontractors to complete several components of the site work and finishing work for your modular home. The following items are areas that will deserve your attention:
Land/Lot – Finding a lot for building is one of the earliest steps, but additional factors are required as well regarding the lot. This includes finding a surveyor to survey the lot, as well as an excavation crew to mold the lot according to where drainage patterns and clearing must occur. Also, a site plan drawn up by an engineer will be needed so that building permits can be obtained. This encompasses soil samples as well as drainage grades as well.
Foundation – Either a structural or foundation engineer will need to be contracted to assist with accurate foundation plans. Once designed, concrete services and framing will be needed to form the foundation accordingly. This is an important step particularly for modular homes.
Permitting – A laundry list of permits are needed including a building permit, electrical permit, foundation permit, etc. In addition, before completion, pest company evaluation of the soil and structure is needed, as well as a department of health inspection for many towns.
Crane and Set Crew – These may be provided by the manufacturer, but you are still responsible for overseeing their work and making sure they are available for the set-up process. You may decide to hire them outside of the manufacturer as this could save additional money; but be sure they are experienced in modular homes.
Connections and Finishing Work – Here you will need several subcontractors to assist with necessary items in completing your home after arrival. Subcontractors include electricians, plumbers, HVAC personnel, painters, flooring specialists, drywall repair experts, countertop installers, and possibly roofers. While the button up and tie in work is not vast, it is varied enough that an array of specialists are required.
Landscaping – This includes both “soft” landscaping such as plants, lawn and trees as well as “hard” landscaping such as driveways, walkways, decking and patios. Asphalt specialists may be needed for driveways as well as concrete or masonry specialists for other areas.
While this list is not entirely complete, it does cover the major areas. Compared to a site-built home, the task of being your own builder is far less challenging. Modular homes do facilitate your own involvement in being the builder which can save you a great deal of money in the end.
Modular Home Q & A
Have you always wanted a home, but have held off due to the cost? Many people have the same concerns. Most adults have the goal of owning their own home, but cannot find the time or the money to buy the home that fits their needs. A modular home can be your dream home, without the difficulty of constructing it yourself. A great advantage is that modular homes can be built in far less time than other homes. This article will answer some basic questions about the ever-expanding world of modular homes. How are they constructed?Modular homes are factory-made, not constructed on-site. After constructing each section of the home individually, it then receives a comprehensive inspection to make sure that the home is up to building codes. You can be reassured that high quality and durable materials are consistently used. Modular homes are, however, very similar to traditionally constructed homes. About how much do they cost? The floor plan you choose will dictate the ultimate cost of your modular home. You can choose a plan that is custom-made to fill your unique desires. Of course, the larger the home, the larger the price tag. In addition to the speed at which modular homes can be built, they are typically less expensive per square foot than homes which are built in the traditional way. A modular home can be constructed in just two months. Does the cost of the home include the cost of the foundation? The price of the foundations is not covered by most manufacturers of modular homes. The cost can be included in your loan or it can be paid for from your own funds. In order to reduce upfront costs, the majority of people choose to get financing for the total price. It is important to know all the details of the coverage, including what is and isn’t covered, so make sure you contact the manufacturer. Can modular homes be built to specification and are they energy efficient?One wonderful feature of modular homes is that they are all constructed to meet HUD guidelines. Each part of the home is inspected for quality and is required to pass the standards of building specification inspectors. Modular homes are more efficient, in many ways, than are traditional homes.
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Where Is The Best Place To Get Financing On A Modular Home, With A Credit Score In Mid 600’s?
How can I get a good rate on a loan for a modular home and not have large payments for the rest of my life? What mortage company is the best to help me out?
Anyone Know Of A Reputable Mortgage Company That Finances Modular Home With Land As An Investment Property?
Investing in Modular Homes
If you are in the right areas, there are big profits to be made with modular homes. The downside? You may need a lot of cash for these deals.
Modular homes are not just a step up from mobile homes. The new ones are usually built to higher standards than many regular stick-built houses. They have six-inch walls and lots of insulation. Once they are on a foundation, they often qualify for regular home financing, as opposed to mobiles, which you’ll always pay a higher interest rate on.
However, they are cheaper than a regular wood-framed home. This makes them a good choice for many home buyers, but what about investors? It depends how you use them. If they are already attached to a lot, you can just treat them like any residential property – as long as they are truly modular homes, and not classified as double-wide mobile homes. The latter are harder to finance, and you’ll pay higher interest.
Perhaps the most profitable strategy, though, is to start with land and put a modular on it. In many areas, a modular home on an acre of land might sell for $140,000, and yet the cost of the land and the necessary improvements plus the modular may be under $100,000. There is a great opportunity in those areas where this is true.Modular Home Investing – An Example
Suppose you have been watching sales of homes around the edge of the city where you live. Every now and then you see a modular sell, usually on an acre or two of land, because many subdivisions won’t allow them. They seem to be consistently selling for around $135,000 or so if they have at least three bedrooms and two baths.
There are several suitable pieces of property in the area selling for $29,000 to $35,000. You can buy a 3-bedroom, 2-bath modular new for $64,000. The modular salesman tells you what you need to do to prepare a lot. Now you need to investigate the other costs.
The well drilling company that has been most active in the area says the wells are shallow in the area where two of the properties are. They can put in a well and pump for $3,800. The soils is sandy, so you can get a septic system installed for just $4,700. A power pole will cost $1,500, an asphalt driveway $2,800, and the foundation $3,200. Setting up the home and making the hook-ups is included in the purchase price. Closing costs and two months of holding costs will run about $3,000.
You decide that you are interested in the most expensive lot, the one that is $35,000. It has the nicest location, and it is in the area where it is cheaper to have a well put it.
Adding up all the costs, you arrive at a figure of $118,000. You think you can get more for the property, but you make a safe projection of $132,000. You realize that after $8,000 in commission and other closing costs, you would be left with a profit of only $6,000. That is not very motivating.
However, you have other plans. You have enough cash to start the project, and a home equity line of credit to finish it without getting a a new mortgage. You make an offer on the property of $32,000 which is accepted. Then you arrange for the well, septic system, and power pole to be installed. While this is going on, you start shopping for a repossessed modular.
You’ve seen them advertised in the paper for as little as $30,000. You let some dealers know you are interested in a “repo,” and a month later you get a call. A dealer has an almost new 3-bedroom, 2-bath modular that he will sell for $49,000. You agree.
You are spending $15,000 less on the home as originally projected, and you bought the lot for $3,000 less as well. You do $2,000 in landscaping that you didn’t include in your original figures. You have an extra $1,000 in holding costs because it took longer than originally projected to complete the project, and the other costs are $2,000 higher than anticipated.
The good news is that because you did the landscaping and paid for the better lot, the home sells for $138,000. Your total costs were just $113,000. Your total profit is $25,000. That is enough to make investing in modular homes interesting.
I Want To Try To Purchase A Modular Home From Clayton Homes. Should I Go Through There Finance Dept Or Bank?
Which would be cheaper?
Any Advice On How To Finance A Modular Home In Pa?
There is a home in PA that I like very much (on 10 acres of land). I just found out that it’s modular. I was told that FHA does not finance modular homes(I was hoping to get the 3-5% down; the home & land asking price is $85000). Do you know of any places that could make this happen? Credit score is low 600s and wife & I make 80k a year.
