DASD

If I am not mistaken, Unreal instances do not support individual (vertex-)colors. They also take only one material per material slot on an instanced mesh. In other words, there are no dynamic material instances on instances in Unreal.
What you can do is in the Unreal material get a “PerInstanceRandom” node. This should give you a different random float value for each instance. The upside is that it should work, the downside is that you cannot exactly control the outcome.

I think you can also build some shaderlogic in Unreal based on worldspace location of an object (and I think this can be made to work for instances, but I am not certain). This could certainly be made to work by using vertex or pixel world-space position.

I think whatever you go with, there should be at least one solution where a user plugs in the thing, specifies the frame range and sample rate (and whatever else makes sense) and it gets solved under the hood. And that solution should be the same for Maya, Unreal, Unity and all other Houdini Engine versions. It's great to be able to build your own thing for everything and that should be possible, but standards save time.

- A hybrid solution I would therefore suggest is that you do the script based thing and then build a “cacher HDA” with that. Then a user can basically do their own thing, or import the “cacher HDA”. The “cacher HDA” builds a cache. Then the user plugs that “cacher HDA” (or a file from disk) into their own HDA.

I hope this makes sense, it's late. Xp

If you have edited the terrain in Unreal, afterwards and need to get those changes back into Houdini fro the sim:

With Houdini Engine you could plug a Landscape in Unreal into an HDA. Once you have the data in Houdini you can do with that, whatever you want.

https://www.sidefx.com/docs/unreal/_landscapes.html [www.sidefx.com]