Finding land for your Factory Built Home (Modular Home or ADU)
Building a Home is…
Building a home is not the same as buying an existing home, the process is completely different. It is usually a very rewarding experience but it can also be time consuming.
Why Modular is better…
With a modular home you start out with a specific model that you already know the pricing on (please allow for inflation in material costs and labor). This is way better than building on-site where you have no idea what any costs are until you have plans drawn up and engineered, and it’s then that you are able to determine if you can afford the home you designed. While we can’t take all variables out of the process, at least we nail down the cost of the home.
Note: As a general rule, site development costs pretty much the same between modular and site-built. For example, if you are building a garage or you are building a driveway, whether the home is modular or built on-site, those costs are usually pretty consistent. So, the real value of a modular home is in the modular home itself and the excellent value that we provide. Yet, there are also a lot of efficiencies throughout the modular processes of design, engineering, permitting, and building that also add incremental savings to your project.
How Can California Modular Houses help me…
California Modular Houses can provide you with general pricing while you look for land and provide useful information to you. Yet, to keep our pricing low for everyone, we aren’t staffed to work on non-property specific projects. If you require assistance beyond general support, we offer fee based consulting, contact us for additional information on this service.
Contractors…
California Modular Houses is not a construction company. We do not estimate or perform on-site work. That is handled by an independent contractor. We have several contractors that can help you once you have land and plans in place, we will introduce you to the contractor directly. Yet, the contractors that we have worked with have all promised the best pricing to our clients knowing that they won’t have to be involved in the engineering and permitting process. So, the contractors that we know do not get involved in projects where no land or plans are in place for them to estimate from.
The right way…
The chicken or the egg: Many people look at it this way, what comes first, buying land, obtaining a construction loan, getting contractor estimates, etc. Yet, it’s not like that at all, there is only one right way to do it.
1. Land: Secure land either by paying cash or getting a lot loan
2. Home: Choose a stock or semi-custom home model or design a home.
3. Construction Documents: Prepare plans for the modular home and site built items, including site plan and soils report, etc.
4. Permits: Submit to the local jurisdiction for plan review.
5. Site Work Pricing: Obtain contractor proposals using the detailed plans that have been developed.
6. Construction Loan: Obtain a construction loan incorporating the cost of land, the modular home, and all on-site improvements.
Choosing you home…
If there are budget concerns from building at the outset, the first recommendation is to scale back the size of the home. Over-building is a typical reason that projects stall. While it’s easy to dream about a large home, it’s best to determine what your needs are and choose a plan that meets your needs, instead of one that meets lofty desires.
Budgeting…
There are several components for creating a budget. This is an overly simplified list but should get you started. A true budget can only be created once you have a full set of construction documents and must be prepared by a licensed contractor.
$___________ Land
$___________ Modular home model from California Modular Houses
$___________ Modular home upgrades ($10.00-$20.00 per square foot is typical)
$___________ Plans and engineering
$___________ Vertical construction (final pricing by contractor)
$___________ Site development (pricing by contractor)
(this includes, garage, driveway, grading, etc. and is priced out
once there is a full set of construction documents).
$___________ City/County fees (your fees can only be provided by your
your local approving authority)
$___________ Contingency (We recommend a generous contingency to
allow for the little things that come up while developing
plans and additional requirements from the local jurisdiction)
$__________ Total Preliminary Budget
Land is the First Step…
· It all starts with having property, if you don’t yet have land that is the number one priority at this stage
· While we can provide general assistance & support, California Modular Houses is not a real estate company so we don’t get involved in the negotiations of obtaining land
· Once you have land under your control, California Modular Houses can be engaged to work on putting the team together to prepare a plan submission package to the local planning & building departments
· After plans are prepared, contractors can provide project specific estimates using the construction documents
Financing…
· On our FAQ page there is lender contact information for Construction Loans
· Most of our clients either pay cash for their property or first obtain a “land loan” to secure the property
· A “Construction Loan” requires that a contractor take full responsibility for the project. For a contractor to be able to prepare a formal agreement, you must have a full set of construction plans prepared and obtain permits for the entire build that is to be part of the bank loan
Locating Land…
· Work with a real estate agent to find land
· Determine the price range that you can afford
· Only sign an agreement with an agent if they focus on your search
· Get out to see as many properties as time allows
· Be aggressive and diligent in your search – you have competition
· Have your financing lined up in advance of looking at properties
· Search outside sources yourself, the newspaper, craigslist.org, etc.
· Have an idea which floor-plan you want, but keep flexible
The Right Property has…
· Good access to the building site, ie: wide roads, gentle turns a flat building pad or a gentle grade
· At least 14 feet wide throughout the route from the freeway
· No 140 degree turns uphill on a skinny street
· Some turns in the route if it is still fairly wide
· No power lines over-hanging the building pad or crane pad
· Hilly terrain only if the land price has been discounted accordingly
The Right RE Agent …
· Is working in your best interests
· Takes a long-range view of searching for land
· Searches the listings regularly, or better yet, Has an auto-program that emails listings which meet your criteria
· May have access to listings not on the MLS
· Calls you with new properties to look at and offers new ideas
· Does not wait for your call, takes the initiative to find your land
Finding Land Requires…
· Spending a lot of time in search of the right property
· Not listening when others tell you that “there is no land left”
· Getting out to see lots the same day they go on the MLS, or right after
· Being willing to stay on the hunt for weeks and months
· Being dedicated, diligent, and patient
Make an Offer…
· Immediately, if it is a good deal it won’t last even in a tough market
· Know which floor-plan you want to build on this lot
· Including your pre-qualification letter and a sizable earnest deposit
· Contingent on a percolation test for a septic system if it is raw land
· Contingent on financing unless you can afford to pay cash
· Contingent upon sorting out the easement if the access is not clear
Contingency Period…
· Review any plans or engineering seller has available
· Meet with Planning and Zoning Department to review property buildability and permit fees
· Locate utilities on/near property
· Choose preliminary modular house plan
Modular Feasibility Study Critical
During Contingency…
· Have California Modular Houses conduct required Modular Feasibility Study to verify road and delivery access
Plans…
· Begin working on your modular plans, soils report, etc. as soon as you are certain you are going to move forward, obtaining permits is a lengthy process and you’ll want to prevent delays later by starting the plans earlier
Closing Escrow…
· Duly investigate property and remove contingencies when appropriate
· Complete financing if you are obtaining a loan for the property
· Obtain insurance for the property and “Course of Construction”
· Hire consultants to prepare plans
Moving Forward…
· Complete Factory Built Home plans
· Complete plans for all site work improvements
· Submit plans to local approving agencies
· Provide revisions and requests for additional information to the local city/county
· Obtain planning and building department permits
· Consummate purchase agreement of modular home with California Modular Houses
· Finalize agreement with qualified, licensed general contractor for on-site work
· Complete financing if you are obtaining a loan for the property
Finding land and building a home is a complex process. This is only intended as a general list of highlighted steps so you can better prepare yourself for your property search. Professionals on your project will be able to provide you with direct advice regarding real estate, on-site construction, and engineering. Please start by working with a qualified Realtor to help guide you through your property search and purchase. Then, once you get to the appropriate phases of the project, other consultants can be brought into your project, as necessary.
California Modular Houses is not a construction company and we are not able to provide estimates for on-site work and the contractors that work on our projects are only able to provide accurate pricing based on a full set of construction documents.
California Modular Houses recommends keeping a generous contingency available in your budget for things that come up during the process with the approving agency as well as options, desires, etc.
If you don’t have a realtor and want someone who can help you find land and knows what to look for and what to avoid, please feel free to reach out to Netza. He can guide you through the process of securing land.
Netza Cabrera
510.685.6661
Broker, CA DRE: 01412708
NETZA
3260 Blume DR., Ste.:225
Richmond CA 94806