📊 Modular home vs stick built home: which is cheaper?

Deciding between modular and traditional stick framing is a major choice for any real estate investor. Many assume modular is vastly cheaper. The reality is more complex. This calculator helps you weigh the heavy logistical costs of modular against the massive time and carrying-cost savings to find out which method actually saves you money.

Modular factories use the exact same materials as a traditional build. As Matt Faircloth puts it, it has been his experience that modular construction will save you anywhere between maybe 5% and 10% if you get lucky, but likely you might not save anything and it might be comparable right in line with stick framing given the cost of goods.

This is where modular shines. As Matt Faircloth notes, the biggest thing you save on is time. You can monetize time by cutting a stick framing job of 10 to 12 months down to a total job cycle of 4 to 5 months.

Cutting months off your timeline saves a fortune in construction loan interest. You also pay less in ongoing property taxes and insurance. As Matt Faircloth adds, that cuts down your carrying cost and ups your project velocity so you go build more houses then recycle your cash over and over again.

Shipping a multi-ton box of valuables is expensive and risky. You must account for crane rentals and transport logistics. These expenses often spike in dense urban areas.

Crucially, your job site must be close. As Matt Faircloth warns, you cannot buy a modular box from a factory in Denver and ship it to Pennsylvania because the liability of crossing the country with this big multi-ton box full of valuables is just not feasible. He notes that factories usually require your site to be a half a day drive or less from their facility.

Based on content by Matt Faircloth on DeRosa Group (YouTube).

Original: Which is Better: Modular Home VS Traditional Home Construction