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HOT TOPIC Possible Blue Ocean? Affordable "tiny" housing park

G-Man

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Yes, this is what I'm talking about. Not trailers, not movable homes, site built, deeded, tiny homes set within a community structure, playgrounds, tennis, community garden, etc.

Think of it as the "We Work" of housing.
I guess I don't understand - why not build tiny condos. You get the same square footage, get some designer to make it all eco friendly or some such nonsense, but a lot more doors per acre, making it more afforsable
 

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Denim Chicken

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I follow this type of stuff on youtube. There's a community in Palm Springs that is converting/converted their trailer park into the tiny home model.


What's funny is that in order to build their tiny home models at scale, the only companies that can handle their demand are manufactured home builders. So they made some tweaks to the manufactured home models such as a nicer porch/deck etc.

I personally think manufactured homes are such great living options considering the price, it's the other stuff like the lot/community/stigma that prevents people from taking advantage of living there. As well as cities and municipalities giving the permits and OKs to build "trailer parks".

But the actual structure of a tiny home versus a manufactured home is not much different other than the rebranding. Tiny homes used to be 150-300 sq ft homes that you can make on a mobile trailer. But people are finding that it's too small. So in the example above they have the "Parks Model" tiny homes which are around 400 sq ft with a base price of $4x,xxx.

There's no difference in the actual building, it's the community and the rebranding that's important to make sure that you do not INCREASE the crime and drug rates when you lower housing costs.


One option I thought of is to build these on a lot and to require a substantial security deposit if you bring your own home ($20,000 or higher).. OR you must buy the homes in CASH. No financing.

This could eliminate any drug dealer or junkie or criminals because of the affordable monthly pricing due to the low cost of the homes. They could and WILL attract bad tenants.

But if your lot requires people to pay for the homes all in cash, it artificially raises the type of income and finance requirements which in theory would raise tenant quality.

Other options explored would be...
- HOA
- Strong community guidelines , etc.
- gated


But having worked in organizations where preserving and maintaining culture was a big deal, it's all about the branding and the ideals of who you recruit that preserves the community, not necessarily money.
 

LittleWolfie

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It might be worth looking into 3D printed housing at this point rather than building small houses because they're inexpensive. Even if you're set on tiny houses then 3D printing still might cut costs. Not sure if you can buy these yet. Maybe a Kickstarter project?

They are already in use in Russia


I guess I don't understand - why not build tiny condos. You get the same square footage, get some designer to make it all eco friendly or some such nonsense, but a lot more doors per acre, making it more afforsable
Some German pre-fabs indistinguishable form site built houses.

prefab house germany - Google Search
 

ChrisV

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There's a growing trend among young people who recognize that a big house and a big mortgage simply isn't worth it anymore. As a result, we've seen big growth in the Tiny House trend as more and more people seek travel and experiences, other than being house broke.

Could a "tiny house" park be a possible Blue Ocean? Obviously the dirt is in the details and the branding so it doesn't cross into the realm of a trailer park.
Honestly, I would be all over this. I think it’s a great idea. Dude, there’s part of me that just wants to sell everything and just go live on a Sailboat.

I seriously looked into getting an RV for a while and just doing whatever.. i just wouldn’t know where to park it and the legalities of that.

This rent crap is for the birds. It’s just a place to keep a bunch of shit I don’t need next to people I don’t like.
 

BrandonS85

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Taking a old, crappy MHP, bulldozing the trailers and replacing with a tiny house community is one of my 3 year strategies.

Me and a friend are looking into it, the biggest issue being funding 50-100 tiny homes in one go. The cost of terrible MHPs isn't bad, evicting everyone to start fresh isn't bad, it's just the cost and figuring out 100% compliance within state law.
 

BrandonS85

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Also one of the things we've been REALLY looking at are tiny-condos built on singlewide/mobile friends. The cost on a 2br/1ba duplex-style singlewide with garage & semi-private yard is absurdly low. The issue right now is hammering solid pricing with a mobile home rep (And of course the money needed).
 

Royce2

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@MJ DeMarco
I tried to read as much of the thread as I could. But what about good ol' apartments? The amount of materials needed to build a tiny home vs an apartment is impressively higher isn't it? As far as turning this into an entire lot project, this idea is actually being considered by the city in our area to have them write new license and approval for tiny homes on actual lots.
I worked with methodhomes and they normally build high end modular prefab homes that cost millions.
However, in 2015 the MakeItRight foundation was building very cheap and sustainable homes that we were a part of. I think we were able to knock out 30 of these units under 10 months for the natives in Wyoming and no they weren't the ones in Kansas that were defective lol.
 
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MJ DeMarco

MJ DeMarco

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I'm gonna go on record and say that the next economic downturn will push these concepts into a mainstream normality. We've been in a 10 year bull market with economic expansion and still, this concept has grown and evolved. Imagine how it will look if we entered a 10 year economic recession.
 

Tourmaline

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There's one of these in my city. It used to just be a trailer park but then they changed part of it into tiny homes. It's great for people that can afford more than a trailer and want a better quality of living with better amenities and a better group of people to be around, but don't want to dump a lot of money into a normal house.

Edit: Here's a link to the community:
 

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Rawseed

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I'm gonna go on record and say that the next economic downturn will push these concepts into a mainstream normality. We've been in a 10 year bull market with economic expansion and still, this concept has grown and evolved. Imagine how it will look if we entered a 10 year economic recession.
Very true.

Another possible solution is converting motels into dorms for young working adults.

 

Red

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There's even a marketplace for tiny houses now: Hutcamp -
One quick click tells you how that venture went, haha. Spoiler alert: it didn't.

I'm gonna go on record and say that the next economic downturn will push these concepts into a mainstream normality.
I hope so (the concept acceptance part, not the recession part). More & more of my clients want small (not tiny) homes. And they don't exist, at least, not the way they want or in the areas they want/need. The builders here in the valley have continued to churn out these huge homes & I get it, you want to make the most money for your time.... but it's just so.... overdone.

I still haven't given up on developing a subdivision of small homes with huge attached garages. I also would jump into the tiny-ish-small home subdivision development. There's so much land in N central Phoenix that would make a great space. But it will take an investor with a vision who is out to help folks out vs making the biggest return on their money. And right now that's just not happening.
 
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WJK

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I'm gonna go on record and say that the next economic downturn will push these concepts into a mainstream normality. We've been in a 10 year bull market with economic expansion and still, this concept has grown and evolved. Imagine how it will look if we entered a 10 year economic recession.
A prolonged recession is known as a "depression". That's the textbook definition. We had one of those in California in the real estate market when I was working there. It was worse financially than the 1930s. It started around 1990. Our mantra in the RE business was "Stay alive 'til 95." 1995 came and went with no change to the RE market. It took until the end of that decade for things to get back to anything close to normal and for all the vacancies to be absorbed.

That was the time of the collapse of the Savings and Loan industry, and the Japanese stock market. Japan has never recovered. Wall Street took over the secondary loan market for the housing industry.

We had the influence of the first personal computers, which collapsed our office space market. We had huge office buildings in downtown Los Angeles with no tenants -- and that filter down to the Class B, C and D buildings. It also meant on-time delivery rather than companies having 60 days worth of goods on hand. That collapsed the warehouse market which also killed the industrial space market. Then came the nose-dive in the multi-family and single-family RE market. Almost everyone I knew at that time in the RE business ended up in bankruptcy court.

Yes, I know exactly what 10 years of downturn means. So, while all that was all happening, on a lark, I went to law school and earned my JD.
 

Kak

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I missed this thread!

I was actually thinking of the same thing. The financing numbers work really well.

The mini homes themselves look more like car loans. 6 years 0% type stuff around here. So a 30k mini home is going to cost you $500 per month and assuming you have a piece of nice land and the utilities to the mini homes figured out... You could easily get a grand or more in my area for them monthly. They just get paid off a ton faster than homes.

Also, if you look at it like a multi family perspective... there is no way you can get new construction for 30k per door.

You could literally buy new ones as you rent out the last ones you bought. Just keep buying them until the property is filled with them and it looks like a little tiny home community. Build a cheap pool. Build a leasing office. It is like building an apartment complex incrementally.

I actually might go look at some unrestricted land for this very reason... Enough space for 20 or 30 of them just so see what’s up.

@SteveO @JScott am I missing anything here? I feel like the numbers work pretty well.

I understand I will need utility work, land, insurance, staff... and I will probably run in the red while putting them up. But once they are rented, I think it will profit nicely and then 5 years hits and things get a lot more fun.
 
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Davidla

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I like the idea/opportunity.

One of my clients is a container construction company (https://roxboxcontainers.com/), and they've discovered there is a lot of hype in the market for tiny houses/container homes.

People see something amazing on social media, and then think they can get it built for $25K-$50K. The reality is that the cool stuff you see on social media is much more expensive than you'd think, or has been built by the people who live there and have building skills.

Just the permiting & hooking up to utilities etc will be a serious headach most don't think of..

So I think the idea of building actual small houses/manufactured homes community would a be more viable/cost effective.

Once these frustrated prospects figure out how much of a pain it is to do themselves, they would love to hear there is a "done for you" solution like this community.

Container construction companeis could be a good partner here, as they already get bombarded with enquiries from the potential targets and turn the majority of them down.
 

Sauce

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Another consideration - you need to have buy in from the local municipality. In my town we have "impact fees". It doesn't matter if you build a 400 Sq Foot house or a 10,000 sq foot house, you will pay $15,000 for the following: parks, trails, public safety, water, sewer and drainage. Add another $2-5k in building permits and you have sunk $20K before you have moved any earth. This is in NM, I can only imagine what it would cost in CA or other areas.

Maybe @Red can shine some light on the fixed hidden costs to build in the PHX metro.

When you factor that cost in, most contractors don't want to build small houses, the fixed costs are just too high and they can't make a profit.

I listen to a podcast by Bruce Norris - The Norris Group. Every year they have a panel of industry experts talk at their I Survived Real Estate. They have folks like Realogy, the chief economist for Fannie Mae, and other builders and innovators that speak.

One of the speakers said something to the effect of - remember the builder who built the xx development. They used to build really cheap homes that weren't very energy efficient, but they were affordable. And really, how long does it take for the mandatory solar, extra insulation, super efficient heaters to give you an ROI? The regulation is making housing not affordable. What we need is less regulation and more cheap "crappy" housing. I agree with this sentiment.
 

Red

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Yeah, @Sauce, differing municipalities out here have those impact fees (most notoriously, Cave Creek & their previous $40k impact fee) but I still don't think that's the main culprit...

And @Davidla, out here the shipping containers are more expensive to retro-fit with insulation/plumbing/electricity than building a stick-built home AND they'll still be less efficient. (also, I haven't even looked into if a bank would lend on them... but I'm guessing as long as they were granted a CofO then it would be okay?) So that's why those aren't flying here -but that's the desert & our summers are brutal. This might work better in, say, Santa Barbara or some Mediterranean climate that's more even year-round.

So why don't we have tiny/small house communities here? Nobody wants to fund them. It's simply a bad return on your investment. So someone is going to have to want to do it out of the kindness of their hearts for their fellow human being.

I will absolutely go on record for stepping up to help develop it, if someone wants to throw their hat in the ring... I just don't see it happening here unless there's some kind of gov't grant involved & someone is feeling philanthropic. Too many hurdles, too many roadblocks & not enough return on investment. It will have to be a labor of love, at this juncture.
 

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IIRC the cost per lot for a new built mobile home park was 10k (hooking up utilities etc) , since youre selling them the land outright I feel like the HOA fees would have to be at least a hundred bucks to make this worthwhile.

Of course lots of developers also dip their toes in the businesses to support the communities (for instance owning the local shopping centers and fast food places) so maybe you can profit on the backend.

Im just thinking someone who paid 40 or 60k for a house probably isn't going to be super psyched to pay you 15 or 20k for a tiny sliver of land and then a sizeable HOA fee.
 

PizzaOnTheRoof

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tylerwilkinson

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Marketed towards the right people (see: hipsters, artists, intellectuals), especially with an emphasis on sustainability, it could be valuable.

Or franchise it out so someone can build their own community on your prefab “tiny home town square”.
 

ChrisV

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You can take the tiny house out of the trailer park but you can't take the trailer park out of the tiny house :)
The tinyhome types aren't trashy.. they're just hippie millennials who don't want a big mortgage.
 

minivanman

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The tinyhome types aren't trashy.. they're just hippie millennials who don't want a big mortgage.
Yeah, but there is no saying for that.... :rofl:

I was going on the old saying..... you can take the girl out of the trailer park but you can't take the trailer park out of the girl.

Dang, I think I just thought of a dirty version of that. :inpain:
 

Blackadder

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Those houses are crazy expensive. Most are $200 - $400 Per square foot. Not really an affordable option.
Most of the tiny houses are super expensive when broken down to a price per foot because kitchens and bathrooms are the most expensive part of a house, tiny or otherwise.
 

Sauce

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Most of the tiny houses are super expensive when broken down to a price per foot because kitchens and bathrooms are the most expensive part of a house, tiny or otherwise.
Sorry @Blackadder I would have to disagree. The expensive part of kitchens and baths comes in the finishes (tile, cabinets, countertops, fixtures). There just aren't that many finishes in a tiny home.

Lets do some more digging on the dwellito homes

The Dwellito Novato Model is 1200 SF, and costs $185K ($154 PSF).

Lets take a traditional mobile home. No frills, but we are talking about affordable housing.
The Karsten K1676D is 1178 SF and the cost is $55K ($47 PSF).

You have a $107 PSF delta in just the building cost. Then you have to add in foundation, sitework, and roof ($75K according to dwellito).

Anybody a manufactured home expert that can chime in on what the difference is @WJK @Davidla ?
 

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