If you are a real estate investor interested in prefab or modular home loans, are you aware that there is another exciting real estate investment prefab option on the market with “system-built” homes?
Anchor Loans has partnered with the California-based prefab home builder Proto Homes to provide short-term bridge financing for house flipping investors seeking the capital they need to build beautiful, high-quality prefab construction projects.
What is a System-Built Home and How is it Different from a Modular Home?
Most people are familiar with modular or manufactured homes. Manufactured and modular homes are residential structures that are completely built and finished at a factory. The manufactured or modular home is then loaded onto a truck and driven to the property where it is installed on block supports or on a permanent foundation.
A system-built prefab home is not built at the factory as one whole unit then shipped to the site. Rather, with a system-built home, multiple factory-built components are delivered to the property and the home is assembled and finished on a permanent foundation—similar to a traditionally constructed home.
Modular Home Loans vs. Prefab Loans
When it comes to planning, permits, and permissions, modular/manufactured homes are classified in ways that can be extremely limiting and restrictive. For example, there are communities where modular homes are not allowed, or they are relegated to a specific location within the community such as a mobile home park.
A system-built prefab home, on the other hand, is typically treated the same as a traditionally constructed home and any local prohibitions in the design, building materials, and site location would be the same as those applicable to any other traditionally constructed home.
Conventional lenders who do offer modular home loans will typically amortize them over 15 to 30 years, and loan programs that are geared toward this product will often have restrictions regarding borrower occupancy. Finding a private or hard money lender that offers short-term modular home loans can be challenging. However, with a system-built home, a real estate investor’s prefab construction project can qualify for a new construction loan similar to a traditionally constructed home.
System-Built Prefab Homes Present an Exciting Opportunity for Fix and Flip Investors
In the world of house flipping, project turnaround times and construction costs can make or break your ROI. Since system-built prefab homes are extremely cost-effective and take far less time to complete than traditionally constructed homes, these beautiful, modern homes present a lucrative opportunity for fix-and-flip and rental investment developers.
With the dependable factory precision and systematic quality control of system built homes, a real estate developer capitalizing on these prefab technologies can complete multiple projects in less time with predictable quality outcomes and maximized ROI.
Proto Homes and Anchor Loans Team Up to Provide Prefab Loans
Proto Homes has been building prefab homes in California since 2011, but in recent years, the demand for these system-built homes began to skyrocket. Thanks to Proto Homes’ smart technology, environmentally-friendly construction, high-quality products, lower overall costs, and manufacturing speed, there is now unprecedented demand for these homes from consumers, rental property investors, and real estate developers. Proto homes products include single-family homes, accessory dwelling units (ADUs), and multi-unit buildings.
Over the past five years, Anchor Loans has been working in close partnership with Proto Homes providing quick bridge loans for house flipping investors in California who recognize the profit potential in system-built prefab homes. The result of this five-year Anchor Loans / Proto Homes partnership is a wealth of knowledge, expertise, and experience that has helped our borrowers discover and profit from these beautiful homes.
After helping our clients complete dozens of system-built Proto Homes projects, it became clear to us that a new kind of loan was needed; one that meets the unique timelines, processes, and budgets of real estate entrepreneurs who often have multiple projects underway simultaneously.
Until now, there has never been a loan explicitly designed to meet the needs of investors and developers utilizing prefab technology. Anchor Loans’ prefab loan is the only loan available to date that is specifically designed to finance a new prefab project with Proto Homes. Additionally, with this new prefab loan program, any qualifying real estate developer or house flipping investor choosing to finance their Proto Homes projects through Anchor Loans can also gain access to additional Proto Homes cost savings.
At the moment, these loans are only available to Southern California Customers. Reach out to Anchor Loans Vice President, Shane Lex: ShaneL@anchorloans.com if you are a real estate investor interested in prefab investing in California and would like to know more about Anchor Loans’ prefab loan program partnership with Proto Homes.