Author Topic: Tiny House Community Investment  (Read 2119 times)

Mini_Mustache

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Tiny House Community Investment
« on: August 16, 2016, 06:33:27 PM »
Hi everyone, long-time-reader, first time contributor.
As most of you sound much like me, you may come across an idea that just eats at you. You research it and research it, looking for all the pros and cons and adjusting your projects in order to alleviate the downsides. This current idea has been on my mind for a good 6 months at least.
First I would like to give you some background. The Army requires those in leadership positions to attend certain training. The military post I am living in close proximity to is known as a TRADOC focused post which means they focus on training. The training ranges from Basic Training for new soldiers which lasts around 10 weeks followed by Advanced Individual Training (AIT) which is another 10ish weeks immediately after. This group of trainees are forced to live in Barracks (ghetto dorms). Upon completion of these two training requirements, these soldiers are released to their units (normally at a different installation). Therefore this is not a feasible market for my plan.
The other training that happens here are for Officers and Warrant Officers. These individuals are higher ranking leaders in the Army. These soldiers are forced to leave their homes for 6 months to a year at a time which does not make sense to move their families (if they have families). This creates a phenomenon known as the “Geographical Bachelor”.
Geographical Bachelors and regular Bachelors in the military, holding these ranks are given a monthly allowance known as a Basic Housing Allowance (BAH) in which they are able to choose how to spend it. For those with families this can be difficult to manage as they are required to live where they are being trained and also pay rent for their families in the other location. These Bachelor groups are extremely limited in their options due to this financial predicament. That’s where I come in!
Currently there are maybe 2 options, within reason, for these soldiers to reside. Both are very close to the installation but the living conditions are much like dorms or barracks and are normally communal. Both of these options charge around 400-600 a month per person for rent so the price is tempting. However, these men and women are well beyond the days of living in such sub-standard housing in which they have to share a common area with another renter and possibly find themselves in the middle of a gang related incident in the middle of the city (those familiar with immediate off-post towns/cities know exactly what I am talking about) and they are all round mid 20s-30s to boot.
My plan is to provide a third option. One in which is so creative, so off the wall that it just may work. My plan is to by a plot of land, 1 acre to start out with as a beta test, and build a Tiny House Community.
In my area, which is roughly a 15-minute commute to post, has a near non-existent crime rate, and with amenities such as only being a couple of miles from beautiful lakes, ATV/Biking/Walking trails, and various outdoorsmen activities, has 1 acre lots of land averaging 30,000 per acre. On average, a tiny house will run you around 40k. I would also want a storm shelter for every four tiny houses which are around 3k installed, a large septic system (another 8k). In 5-6 years, charging only $500 a month, I have paid for all four houses and property. I could probably charge more depending on the market but I wanted to illustrate the time to return.
Granted, there are other costs associated with this type of investment; Insurance, Maintenance, Water, Electricity, etc… but depending on the beta area, I will be able to adjust costs depending on the renters’ desire for responsibility… 
As prior military who always preferred off-post housing, I wish that someone had made this sort of investment and allowed me to better enjoy my location so now I would like to be able to take this leap and hopefully this idea can catch on.
This is where I would like you all to jump in. I feel that there are plenty of experts in this all aspects of this project. Please be brutally honest and show me the light! Thank you for all of your input.
P.S. There is also a couple of local colleges, tons of contracting jobs, and a factory that needs this type of housing but I chose to market to the group I knew and understood. These other groups need to be a target audience as well.
I have never owned a business, I am debt free other than my house, and I am constantly looking for better ways of investing.
« Last Edit: August 16, 2016, 07:15:53 PM by Mini_Mustache »

JustGettingStarted1980

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Re: Tiny House Community Investment
« Reply #1 on: August 16, 2016, 06:39:16 PM »
Pretty cool idea, but I'm curious...

How is a Tiny House Community different than a Trailer Park?

What are the price points/costs of living in a Trailer Park instead?

JGS

Mini_Mustache

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Re: Tiny House Community Investment
« Reply #2 on: August 16, 2016, 07:09:49 PM »
I jokingly illustrate it as an upscale trailer park.
On a serious note there are many different schools of thought on this topic.
1. They are the same
2. The tiny house is considered a more sophisticated style of living, not just "cheap"
3. Square footage of a trailer is normally much greater
4. This is more directed at what I would like to accomplish but, Trailers are more mobile as opposed to an established/permanent location. (some prefer to build these on trailers that can be mobilized, but I want to put these on slabs making them more established.

There are many more ideas on this topic readily available for the proper google but these are the ones that stick out in my mind.
My ideal location would be an already existing trailer park which would be the lesser amount of work.

iris lily

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Re: Tiny House Community Investment
« Reply #3 on: August 16, 2016, 07:45:23 PM »
Lots of detail about the market you expect, but that is putting the cart before the horse, I think.

The essential problem with "tiny houses" is that most jurisdictions have a minimum square footage reqirement for new construction and the trendy tiny houses do not begin to meet that. So, how,is zonng in your preferred area?   Do you need to get a variance, and how hard is that to do?

My thoughts on tiny houses as an observer of the trend and a lover of small
Victorian houses:

If they roll, they are super expensive to pull and to build, when compared to RVs of the same siE

If they are stationary, ok, but it still seems like a lot of hype,for a coule hndred sq f of living space when alternatives abound.

I love what I used to call 'tiny' and now call  small houses of 350 - 600 sq feet. Cabins, lake cottages, MIL units, carriage houses--they all still exist in established neighborhoods all over the country. And then there are the classic  2 br/1 ba bungalows from the 1920-1940's  that are slightly bigger. Just Close off one room, and ignore the basements, and youve got a tiny house! Haha.

I Would much rather see the huggers of tiny houses buy up these small houses and save them. It is much greener activity to do so.

But that said, I realize that it is NOT an either-or situation, that people can do both.

So your generation can go forth and change zoning laws so that tiny house communities are viable, you can build respectible abodes from pleasing materials and have something you all are proud of. Go for it! 

« Last Edit: August 16, 2016, 07:48:52 PM by iris lily »

driftwood

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Re: Tiny House Community Investment
« Reply #4 on: August 17, 2016, 06:19:21 AM »
Military members sent TDY (Temporary Duty) for a school should be receiving Per Diem (in addition to their BAH), which for a 6-month school is $48.95/day (lodging only). This amount can vary by location.  Source:  http://www.defensetravel.dod.mil/site/perdiemCalc.cfm

Many times TDY orders will stipulate that the member needs to use base lodging.  If base lodging is full then they receive a "statement of nonavailability" and get to go look for lodging off base.  In that case, these Soldiers are looking at receiving $1,488/month to pay for a place to stay.

If your community could attract these Soldiers then it could easily be a successful venture.  It sounds like you're aiming to provide living conditions better than a hotel/barracks/ $48.95 per night hotel.  I think the simplest solution would be to look at a 'cabin' setup.  Tiny houses aren't cheap, and the building codes they dodge might be easily complied with using cabins.  You'd have to do more market research and find out how many of these guys per year are living in off base establishments.  Then develop a plan to pull those customers your way.  It sounds like you're already working out the size of the first setup.  If it works you could reproduce it as long as you can find customers to fill the vacancies.  You'd have to have the appropriate lisences/zoning to be renting to guests like a hotel.

Active Duty Air Force (prior Army) here and I'd rather stay in a tiny house/cabin-type 'resort' than a hotel any day. 

GreenEggs

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Re: Tiny House Community Investment
« Reply #5 on: August 17, 2016, 06:56:10 AM »
I built a tiny house & I've lived in a double-wide.  Tiny didn't work for us very long.  I'd much rather live in a 2000 sq ft mobile home than a 300 sq ft cute "house".  Have you tried living in a tiny house?  There's no room for your "stuff". 

My 1974 double wide has depreciated to tax value of $28,000, but it's still in good condition.  It sits on a valuable lakefront lot, and when I'm ready to build I will have to pay to tear it down or pay to haul it away.  I'd happily give it away instead. 




Mini_Mustache

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Re: Tiny House Community Investment
« Reply #6 on: August 17, 2016, 08:23:36 AM »
Iris, thank you for the heads up on the zoning. I have researched it a little to this point. I am still in between whether I would want to stay in/out of city zoning so I will need to check with both the county and the city and weigh those as well. In regards to your reno idea, this is really not an option where I am looking to build. The town/area is an up 'n comer other than the old decrepit center of the town which I want no part of. These houses are more closely comparable to trailers rather than the houses you described. Nothing wrong with those but not the vibe I was wanting to created.

Driftwood, thank you for your input. I thought of the TDY but with there being a limit on it in terms of time (180=PCS) I feel that this may be a separate market. I may want to look into market as well but believe that the needs would be changed (instead of 6 month leases I would need much smaller term rentals). There is nothing wrong with marketing to this group but maybe TDY hunting would be too short term for sustainability... As far as your cabin idea, funny you would mention that, I am looking through a couple of them today. The only issues I can see with the cabins is that (from my little research in the matter) are not as insulated/more seasonal targeted. As far as floor plan however, I feel that the cabin floor plans that I am looking into are extremely nice. Also, I believe there are two branch CCCs that are hosted here, and way more of the WOAC. It shouldn't be too difficult to research this but as TRADOC is constantly in flux in regards to soldier surges, this may be a difficult research undertaking. I agree with your statement on the reproducing/scalability of this project. I could simply buy up 1 acre lots and pepper the county with these communities!

GreenEggs, I agree with you 100%. This type of living is not for me and I would never recommend them for "long-term" living which is why I feel that 6 month lease agreements would be my bread and butter. The fact that these are rentals and not for sale, I feel, would keep people from feeling "stuck". Should someone not like this option who are looking for more "long-term", after 6 months they can opt out. Also, the market I am looking at wont have much "stuff" to worry about, although storage is easy enough to facilitate. I've seen nice apartment complexes who provide a storage locker type of option. As long as I can keep these places from looking trashy ("stuff" everywhere) I think this may be a valid solution...

Thanks again everyone. Keep them coming. I need all the insight I can get!

GreenEggs

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Re: Tiny House Community Investment
« Reply #7 on: August 17, 2016, 09:13:43 AM »
From an investment standpoint it would probably make more sense to build something with better resale value, something that would have more potential to appreciate over time.

Maybe tri or quad-plex design would be easier to get zoning & finances for, and also be a better investment.  That would probably make better use of the land than trying to arrange a lot of tiny houses with separate parking, etc.   
If you already owned a large property the tiny houses would probably be easier to site & arrange, but you're talking about buying 1 acre. 

With the tiny homes there's more waste built in, since the combined exterior surfaces would be greater than if they were combined.  Also if they're in a tornado zone larger homes are probably safer. 

Have you thought about trying to find a large older building that you could convert to lofts or studio type apartments.  You could pack a lot of living space into an large old warehouse, church, or factory.  May be cheaper than building new.

Mini_Mustache

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Re: Tiny House Community Investment
« Reply #8 on: August 17, 2016, 09:56:39 AM »
GreenEggs, damn you for making sense! Hahaha! J.K.

In regards to your investment stance, it is irrefutable. However, I feel that this market would draw people who aren't looking for the standard "stack and pack" situation.  I just need to figure out if these individuals are the majority or not. Those are definitely valid options which I would need to do more market analysis on this situation to have an answer for.

The tornado zone issue is one that I will absolutely need to look into. It  didn't occur to me that this may be a consideration. I did mention the community storm shelter which may inadvertently alleviate that issue but as far a structural stability, I'm not sure. In the tiny house defense, trailers are just as likely to be swept away.

Thank you for the advice though. Definitely considerations that will be needed addressed.

Goldielocks

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Re: Tiny House Community Investment
« Reply #9 on: August 17, 2016, 09:58:37 AM »
What about a monolithic dome home community?  They are individual homes, and ideal for low maintenance, heating, etc. costs.  They also are storm shelters in and of themselves.

Because of the odd shape, I would build an attractive community structure / exposed beam porch or other eyecatching detail near the entry, make it look upscale.

This link will help.  The company has built a low cost rental community for minimum wage persons in Texas, and knows how to run the costs very low and affordable without subsidized housing.   Give them a call.

http://www.monolithic.org/homes

Mini_Mustache

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Re: Tiny House Community Investment
« Reply #10 on: August 17, 2016, 12:51:24 PM »
Very neat idea goldielocks. I will look more into these. I don't know that the ROI would really be that much of a difference though. Since the square footage I'm dealing with is so minuscule in comparison. (200-400 sqf) The monolithic housing alternative seems to be more cost effective when compared to the traditional single family home. Like I said though, I need to look into this alternative. Thank you.

Goldielocks

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Re: Tiny House Community Investment
« Reply #11 on: August 17, 2016, 04:28:59 PM »
Very neat idea goldielocks. I will look more into these. I don't know that the ROI would really be that much of a difference though. Since the square footage I'm dealing with is so minuscule in comparison. (200-400 sqf) The monolithic housing alternative seems to be more cost effective when compared to the traditional single family home. Like I said though, I need to look into this alternative. Thank you.

I don't have all the numbers anymore, but the owners of the rental property were able to make it work financially, renting it to tenants only earning $850 per month, who paid about $350/mo in rent for small 1 bedroom or bachelor apts.  I think their land was basically free, but they had to put in for utilities, sewer, water, etc, as well as construction costs.