Built Better, Built Stronger, Built Faster – An Investor’s edge in New Home Construction

By Larry Haines, President of BP Institute and founder of MyPropertyLeads.comTypically, real estate investors are looking for a good deal. But ask 100 investors what a good deal is and get 100 different answers. The modular home industry is helping to define what a good deal is when considering new construction as an investment strategy.

First let’s do a little myth busting. Modular homes are not mobile homes. Modular homes are built to a different building standard than mobile homes. (HUD vs. IRC as well as complying with any additional local regulations where the house is being delivered). Some of the names for modular housing include “Industrialized Housing” or “System Built Housing”.

Another myth to bust is one that quality of materials or building standards are somehow less in a factory built home. On the contrary, houses assembled in the factory and sent to the job site need to be built to withstand the rigors of transportation.

Craig Calkans, General Manager of Champion Homes of Texas, Burleson, TX recently said; “These homes not only have to withstand the wind pressure of a 70 mile an hour truck going down the road, but for every 100 miles of road traveled, these homes withstand the same stress a stick built house goes through in a 17 second earthquake with a 6.2 magnitude rating and our average delivery exceeds 500 miles from out plant. Now that’s Tough!”

Author’s comment: Having been through a 6+ magnitude earthquake in California’s Bay Area, I had to agree that was impressive.

Modular homes are built in a controlled factory environment where the quality control can far exceed that of a stick built home. The modular home can be up to 90% complete prior to shipping with all the walls, flooring, ceilings, carpeting, electrical, plumbing, appliances and fixtures already installed, inspected and ready for use.

A modular home manufacturer typically has millions of dollars in inventory staged along the factory floor ready for the order to be initiated. The order is released and the construction process starts; first with the construction of the frame and axles, then the sub-floor, and as the unit is moved along the production line, is completed in as few as 3-10 days, depending on the size and features installed in the unit. In many instances, a typical 2,500 square foot home can be constructed in a factory in under a week.

Some of the benefits of a modular home include:
Lower cost of construction (typical savings of up to 20% vs. stick built)
Shorter build time of (30-90 days versus 4-9 months) reduces:
exposure to weather damage
exposure to vandalism and theft (which has become a 4 billion dollar problem nationwide)
carrying costs for taxes, insurance, and interest expense
Able to withstand 140 mile an hour winds (category 4 hurricane)
Same features, options and upgrades available as in a stick built house

Speaking of features, let’s bust another myth. The perception of a modular home is that it looks like a mobile home. Since a picture is worth a thousand words, here is a picture of a “the Cottage”, a modular home built by Genesis Homes, a Champion Enterprises company. This home won the “Production Home Over 1400 Square Feet award” at the 2003 National Congress & Expo.

Looks nothing like a mobile home!

This high performance Energy Star home includes an open floor plan, multi story, lap siding, wide front porch, dormer windows, transom front doors with sidelights, crown moldings, media center and ceramic tiled kitchen and baths to name but a few features.

As an industry, modular builders are delivering over 42,000 homes a year and growing rapidly. Along the Gulf Coast, since hurricanes Katrina and Rita swept through in 2005, modular home alternatives are seen as a way to get affordable housing in place much faster than stick built houses. Labor and material shortages, theft of materials, and construction delays are a reason that many active investors are considering the modular alternative.

Written by Larry Haines, President of BP Institute and founder of MyPropertyLeads.com
Copyright 2006

A Time for Decision in the Gulf Coast Disaster Zone by Larry Haines

August 16, 2006

It is almost a year since Hurricane Katrina ripped through the Gulf States of Louisiana, Mississippi and Alabama.  The time has come for people to make a decision regarding their flooded houses according to politicians and many redevelopment advocates. They are challenged by people that say that 12 months isn’t enough time to make a decision about what they should do with their property; especially, since many were not allowed into their property for weeks after the water levels went down. My personal opinion is that this situation will get worse before it gets better. The problem isn’t about one person or another or even one neighborhood or another. The problem is widespread destruction that has left entire areas in economic shambles. That being said, decisions to rebuild are made one house at a time.  The Mayor of New Orleans has declared August 29^th the deadline to do something to start the rebuilding process on your home or face it being torn down by the City of New Orleans. 

While individuals want their property rights, the mayor wants to rebuild the city and is finding it hard to convince people to come back without forward movement on housing, health care, and transportation.  Recent drug wars have sent the murder rate up yet again. Whether you like Mayor Nagin or not, anyone can see that this is a thankless job.  In fact, it would be interesting to note how many thank you letters the mayor actually gets! A leader must do what is right for the community, while respecting the rights of the citizens. In this instance, I support the mayor in getting people to do something and here are my primary reasons.

1. Investors want to invest in the area and are trying to find deals that make sense economically for the risk taken. One big risk is that you buy a property and rebuild it for rent or resale, only to have a neighbor take no action and not clean up his yard or half of his house is collapsing. In many instances, people have not even gutted their homes and with no sign or activity or no deadlines, you wonder just how long they would let the blighted house stand.
2. Homeowners have made some temporary repairs against the elements. Those repairs are nearly one year old and they are deteriorating. For example, I was out at a house I bought to rehab in Lakeview recently and the blue tarp (someone should trademark that name!) was sun beaten and was starting to shred. The wind came up from a thunderstorm and ripped the tarp in half. As the rain came down, it went right through the damaged roof and caused several thousands of dollars in damage to the wood floors and sheet rock in the second story that had been protected for 10 months. The point is that these repairs are temporary and to preserve the house, long lasting repairs need to be made.
3. The city needs revenue to survive and be vibrant. Flooded houses in dilapidated condition do not ad to the value of the community in any way. City services cannot be provided to areas with only a few homeowners are sporadically rebuilding.

 For the greater good, rebuilding is necessary. It can’t take place if people refuse to remove their house, fix their house, or sell their house to someone else that will fix it. Remember the old saying? - “Lead, Follow or get the heck out of the Way”. One year should be enough to do one of the above.

Larry Haines is President of BPI Management, Inc., the General Partner of a limited partnership developing SellYourFloodHouse.com and MyPropertyLeads.com to match sellers of flood and storm damaged property with investors from across the U.S.

What is GIS Technology?

The Next Advance in Real Estate Investing: 
Geographic Information Systems and Satellite Imaging

Article by Sara Duckett and Larry Haines, President of BPI Management, Inc. and GM of MyPropertyLeads.com

Investing in Gulf Coast real estate can be very profitable but it is vitally important that the potential properties be analyzed using the most current and specific data available.  Louisiana investment property is plentiful after Hurricane Katrina and the investor needs the best information at his fingertips in order to identify the most profitable deals and which ones he needs to stay away from.

What is GIS? Geographic information system. The storing, manipulating, analyzing, and displaying of data in a geographic context. Simply put, you use data to make maps.

Maps made by earliest man have been discovered across the globe. Even though they have been used for centuries, maps have remained basically the same.  They are drawings or representations of  how to get from one place to another or interpretations of  what the mapmaker saw and recorded at a set time.                                                                                               

However, it is only in recent decades that the technology has existed to combine satellite imagery and maps with computer graphics and databases to create geographic information systems or GIS. This technology has changed mapping forever.

How do investors make money with maps? GIS mapping capability is very important to investors considering Gulf Coast real estate. MyPropertyLeads.com offers property leads and very specific data that can be layered onto satellite imagery that will show the investor what they are buying. GIS can answer questions such as; Is this property in the flood plain? Is this property close to public transportation? How close are the retail areas and schools so that the investor can determine the potential marketability of their purchase. GIS mapping with good data can take the guesswork out of doing due diligence on Louisiana investment property. Each layer of information (or theme) will be extremely helpful in determining the desirability of a property and its potential value.

Analyzing spatial data tied to a relational database is what GIS is used for and this is what gives this technology its power. Many unique databases can be drawn from to create maps and the information layers. Data can then be referenced from the maps. GIS databases including social, geographic, demographic and environmental among others can be dynamically updated and loaded into the associated map giving the user completely up-to-date information.

The bottom line is that investing in real estate for a profit is a great way to make a living IF you buy the right deal at the right price in the right location at the right time. GIS helps investors make the right decisions using the most up to date technology and data.

For an e-copy of this article with color photos and images, please e-mail:  info@MyPropertyLeads.com.  Visit:  www.MyPropertyLeads.com for more information or call:  1.877.777.8440.

MyPropertyLeads.com Launch

Welcome! This is the very first posting of our blog. We are looking for active and new real estate investors and professional service providers to the investing community in the Katrina and Rita devastated region. Our technology makes long distance investing possible. If you are an expert in the Gulf Coast hurricane devastated region (i.e., zoning, mold remediation, legal, environmental, flood zone analysis, etc.), we may be interested in hosting you for our planned webinars.

Visit these sites hosted and sponsored by BPI Management, Inc. (The Woodlands, Texas)

For investors: www.MyPropertyLead.scom
For homeowners wanting to list of their storm or flood damaged house for free: www.SellYourFloodHouse.com

Our investor program offers leads, Google Earth satellite mapping, and Geographical Information Systems tools to aid in evaluating residential real estate opportunities. The region needs private investors to come to the area and we have created a market-maker resource to faciliate and speed up this process.

Your feedback is greatly welcomed.

Sincerely,

Andy Valadez
Marketing Director
BPI Management, Inc.
24/7 - 713.560.3348
www.MyPropertyLeads.com
E-mail: Info@MyPropertyLeads.com