Learn About Prefab and Modular Homes

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Modular Homes 101

What's a Modular Home?

Modular homes are homes that are prefabricated (manufactured in a factory), and delivered on a truck either in sections, in small parts, or fully assembled. The ability to manufacturer a home in mass production helps reduce cost in labor. Modular homes are different than manufactured homes in that they are permanent structures and set on a foundation instead of on wheels.

If there's something you are interested in learning more about, check out some information below.


What's the difference between Modular and Manufactured?

A manufactured home is different than a modular home in one main reason - mobility. The term "Mobile" or "Manufactured" describes a home that can be transplanted, and can usually be found on wheels. In contrast, the term "Modular homes" are used to describe permanent structures that are attached to a foundation and arrive mostly or completely assembled.


What are Prefab Homes, Modular Homes, Accessory Dwelling Units (ADU)?

There's a lot of terms here but modular homes are almost always prefabricated homes; they are made in factories as a whole or a kit of parts. An ADU (accessory dwelling unit) is a modular home that can be lived in (bathroom, kitchen) as opposed to a recreational studio or office space.

A diagram of blocks in the shape of an abstract house.


What are the costs that the Homeowner covers?

When you buy a modular home, you typically are responsible for site prep work before installation: trenching for plumbing, electrical, and hiring a GC to build a foundation. Modular home Manufacturers often don't include site work in their price but they have general contractors that they can recommend.


What are the site costs?

When shopping for a modular home, the biggest unknown is your site conditions - how difficult it is to get a modular home to your property and how difficult it is to crane it into place. Properties that are on mountain cliffs, or in-between high rise buildings will cost more. Site prep costs can be expensive, sometimes up to half the cost of the modular home.


What's the difference between Flat Packed and Pre-assembled?

When you see that a modular home comes flat-packed, it means that the home is not fully assembled and requires on-site construction. The term "flat-packed" refers to the parts of the home that are shipped as a flat system of pieces. Preassembled homes are often called modular homes, and the term means that a home arrives to your property fully or mostly assembled. As a result, modular Homes almost always require a crane to lift the large sections (or modules) of the home.


Why do tiny homes have a larger dollar per square foot?

You can expect to pay anywhere between $75,000 and $200,000 for a modular home. This might sound like a big price point compared to a mobile home, DIY home, or a track home. The reason is that you are not paying for square footage. An ADU home has the core elements of any home (electrical, plumbing, foundation) that makes up the bulk of the price point.

A diagram of blocks in the shape of an abstract house.


How to Finance Your Modular Home?

Modular homes can be financed through Home Equity Line of Credit, Construction Mortgage, Refinance Plus improvements, Refinance, Purchase Plus Improvements. In many cities like California, co-investing has become a desirable option where a third party will pay for the entire home and split the rental profits. Terms are different by lender but this model can help you get a modular home on your property without any upfront costs.


What are the Shipping Costs?

Shipping costs are calculator per mile (or km) based on the closest factory to the property that you are placing your modular home. If the closest factory is overseas, you can expect a large shipping cost (~$17,000 USD) due to specialized shipping. If your modular home is flat packed, it is significantly cheaper because it is shipped conventionally.


Looking to build a community of homes?

Are you a developer or Investor? If you are an investor and looking to build a community of modular homes, reach out to us about discounted pricing. Even if you are looking to build 3 or more homes, reach out to see what kind of bulk pricing you can get per unit.


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