Posted by bob on June 05, 2007 at 20:04:06:
what are your rates?
Construction Loans - Posted by Allan
Posted by Allan on April 12, 2007 at 18:43:02:
Any idea on how to get started on construction loans? From land acquisition to building? How much downpayment will be needed or out of pocket? Any help would be appreciated…
Re: Construction Loans - Posted by Kelvin James
Posted by Kelvin James on April 17, 2007 at 05:24:56:
As regards contruction loan, i know of a private lender who gives loan at very low downpayment/interest rate. You can contact him on :rosehouseholdlmt@gmail.com.
Good Luck!
Re: Construction Loans - Posted by Brian (WA)
Posted by Brian (WA) on April 13, 2007 at 22:23:21:
Allan,
You can build a home without any money out of pocket depending on your credit and property. You can get 100% of budgeted costs, including land purchase, budgeted construction costs, interest costs during construction and loan closing costs. When project is completed you can even do cash out based on completed appraised value.
Brian
brian.collins@assetmanagernw.com
www.assetmanagernw.com
Re: Construction Loans - Posted by Ed Garcia
Posted by Ed Garcia on April 13, 2007 at 12:16:20:
Construction Loan
Allan,
I have done construction loans.
What you are attempting to do is not as complicated as it seems. You will need the following.
(1) LAND: Either free and clear, or 50% paid down for a land draw.
(Note) If you wanted, you could buy a lot with NO money down, have the seller subordinate their loan to a construction loan.
(2) PLANS: These plans have to be approved by the city your building in.
(3) PERMITS: As you know, sometimes the City can require you to build either conforming structures or off sites, that the City wants. They will also have building standard for your area.
(4) COST: The Bank will require a COST BREAKDOWN of all of your expenses. They will want to see a cash flow chart to pay you on a VOUCHER system. As each phase is down and signed off by city inspectors, the contractor will be paid for that phase. (Note) interesting enough, the bank will take your cost break down and analyze it with their computers. If the cost is more, that will concern them, and they will cut it back. If it?s less, that will also concern them because they will think you short changed yourself in building this project. So In essence, the bank can be instrumental in verifying your cost. However, don?t ever count on anyone but yourself. Do your own, do diligence. (Note) the bank will require at least 10% liquidity on you the borrower.
(5) CONTRACTOR: If you are a Contractor, the bank will want to see your resume and you contractors license. If you are not a Contractor, then the bank will want to have a resume on your contractor as well as a copy of his license, and financial statement.
There are other considerations, but this is enough to get you thinking in the right direction. If everything is done right, you should be in the deal about 70% to 75% LTV on a NEW property. In fact I have seen better depending on area, and size of the deal.
Allen, this is just a general run down to give you some food for thought,
.Ed Garcia
An Answer - Posted by Jimmy
Posted by Jimmy on April 13, 2007 at 10:08:05:
I’m no expert on Construction Loans, but I have done a couple before. I did not have to finance the land acquisition, so I have no experience with that part of your deal.
I used a local bank for the construction/permanent financing.
I had to submit my plans and the construction budget to my banker. They made me get some kind of “crystal ball” appraisal to support the deal (i.e., the appriaser looked over the plans, and came up with an educated guess of the value of the finished product.) The loan was approved, and I was able to draw down on it at critical points in the process. My particular loan was interest-only during the construction period, and then morphed into a permanent, 15 year commercial loan when we finished.
Re: Construction Loans - Posted by James Harris
Posted by James Harris on April 13, 2007 at 09:00:06:
Are you seeking a loan for your own place?