Shell House Model

bubbatn

Hey everyone ,

TN builder here with a couple of questions.

I have been building specs for 8 years and the market has stopped, I have a commerical property where I can build a "shell" house on it for a model home.

Does anyone else do the "shell" models here? You finish you save type of program?

Will the visual of the model pay off ? Or would it be just as good to wrap my trucks in the ads for example: new home $39,900.00 you finish you save?

Thanks for all your help.

BUBBATN

Kgmz

Thw only way that is going to work is if you have all cash customers. No way they are going to get financed for something like that.

Banks want to make sure that something they are financing is going to get finished, it really does not have much value to a bank until is finished and has final approvals from the county/city, etc. And the way things are it will be even tougher.

Now there are a few companies around here that sell homes built on your lot and have a few models. These guys advertise they can build a house for $38 a sq ft. and offer upgrades and options.

Here is the website of one of the companies.

http://www.hilinehomes.com/

Kaiser

Help me out here. I'm not understanding the Shell House.

Is this a House with 4 walls and a roof?

Or are you building a complete house without any of the finishes.

ie: paint, flooring ect.?

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mdshunk

It's downright difficult to get insurance when purchasing a shell house. Shell space is common in commercial construction, but pretty strange in the residential market. It would take a monumental educational effort to clue in your market to what this concept is all about. It's pretty intuitive for a tradesman, but very confusing to a regular person. Fact is, a residential customer's "mind's eye" doesn't work. It's hard to build value in residential shell space without something more tangible (like a completed one) to help visualize. The commercial client has a better ability to look at shell space, but residential client does not.

bubbatn

No the house is 8ft ceilings and completed on the outside. The home is ready for finish work inside (electric,plumbing ,etc.)

I have a question about that link to Hilinehomes.com can they really build for $38. sq. ft ?

gncremodeling

Prices are going to vary in diffrent parts of the country.I live in Mississippi the majority of the population here is low income. If you want to sell here your homes have to be cheap. I was in Laffayatte, La. last year Bills movable houses sells homes like you are talking about. From what I understand they are pretty sucessful. this is a unique approach to the housing market. Please let me know how it works out.

modterry

I agree with you about having something to show - we did not have a show model during the good times and didn't realize it may have cost us a couple of million in sales.

We build custom modular homes - I am building a small module - making it a design showroom for kitchens and baths.

We will sell it as soon as someone wants it. We can make it a cabin, office, mother in law suite, or add to it to make it a home.

My worry , like yours, is buyers have a hard time envisioning the finished product - I have had them say " I'll come back when it's finished" and you say well, what would you like for finishes?, etc"

One of the posters is right about the banks wanting a finished product - but, that is what you are there for - you can offer to move it - set it, and then add the finishes for a completed home

I recommend you do the shell - at least you are creating an asset - worst case is you might have to use it yourself. - you could use it as your office.

When you have a drive by model - you have to consider - are you in the retail business?

We are aiming our business at buyers who can afford something between $ 25,000 and $ 100,000 and may not need financing.

I recommend buying one of Jerry Rouleau's books on marketing new homes. Has some great ideas and he has updated the book for this latest market.

Keep us informed- I am interested to see your feedback.

Terry

dirt diggler

Honestly - you caught my eye.

I think you do have a market. But I'll give you some feedback thtat might help:

If it was entirely for personal use (i.e. - a "dream home") - I'd rather custom design it myself. At that point, if I am doing that, the PRICE is not going to be the issue. I'm not going to build that personal "dream home" unless I know I can afford it. Whether I built it myself, or hired another contractor - I'm going to want to make it unique.

For that reason alone, I'll never be in the spec market.


Where you DO catch my eye is the fact that here you have a lot with a home that is structurally completed. Can I truly save enough in the finish work to make it worth it?? (I don't know - I have no idea what TN pricing is, etc). Chances are, if the savings are not going to be tremendous - I wouldn't be interested.

Nonetheless - I think you DO have a market for that and wanted to give you my feedback just so that maybe it can help you understand mentalities of your demographics better.

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Thanks in advance!!!