Do Cheap Pre Fab Homes Really Pencil Out?

Chapter 06: Do Cheap Pre Fab Homes Really Pencil Out?

We have yet to find a pre-fab or modular solution that is cheaper to build than our regular stick frame construction costs. Yes, they can save time if you order a cheap pre fab home early enough. We tried to order pre-fab lumber on several occasions and were told we had to wait 3 months before the lumber would arrive. In addition, the pricing for the pre fab home was actually more expensive than what my contractors could frame the building for with regular stick frame.

It makes sense the prefab or modular construction can be higher quality as the framing is performed under climate controlled conditions. Once you factor in all the advantages vs. disadvantages below, my conclusion is that it’s easier to go with conventional stick frame construction.

Disadvantages of Pre-Fab or Modular:

You might have to overcome negative perceptions in the marketplace
Not all homes can be built with modular or prefab companies
- If power lines are in front of your home
- If streets are too small making access difficult for cranes and large semi trucks
Financing - not as many lenders, more up front capital required to get started with the factories requiring large up-front deposits. Typically modular factories require 50% down payments.
Limited Flexibility - Factories in general will build what they want and in certain dimensions
Limited selection of finishes
After everything is said and done, it is debatable that there are any real savings

Advantages:

Saves Time (if there isn’t a long queue in front of you)
No weather delays during winter months as everything is built indoors
Not as much wear and tear on the materials during construction

In theory, pre fab is supposed to be cheaper. It all depends on what type of contractor you are using and how much sweat equity you are committing to your project. When compared to building with a high-priced retail “$90,000 F-350” stick framed contractor, it is definitely going to save you money.

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How to finance, plan, and determine if your Accessory Dwelling Unit / Granny Flat is a good investment. This guide will share tips on how to analyze your project as an investment and give you tools you need to run the numbers like a professional developer. You will gain valuable knowledge on the feasibility of your project and what hidden costs to look for when determining your budget.

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The 2019 Guide to Building an ADU in California
(Including Financing Options)

For homeowners who want to make the smartest investment when building a backyard cottage, granny flat, accessory dwelling unit, or garage apartment.

Chapter 01

What is an ADU?

Chapter 02

Are Accessory Dwelling Units a Good Investment?

Chapter 03

How to Build a Mother-In-Law House

Chapter 04

Why Build an ADU?

Chapter 05

Top 3 Ways to Finance Your ADU Renovation Loan, FHA 203K, & HELOC

Chapter 06

Do Cheap Pre Fab Homes Really Pencil Out?

Chapter 07

Can ADU Housing Solve the Current Crisis in California?

Chapter 08

Mother-In-Law Apartment Floorplans, & Design

Chapter 09

How to Choose a Small Home Builder

Chapter 10

Cost to Build a Cottage in the Backyard

Chapter 11

East Bay & Contra Costa County ADU Requirements