for all you FINANCING SPECIALISTS..I want to tear it down & BULID ANOTHER ONE... - Posted by Sandra(Doe)

Posted by Ed Garcia on April 16, 2000 at 01:16:22:


Try his.

(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 construction loan.

(2) PLANS. These plans have to be approved buy the city your building

(3) PERMITS. As you know sometimes the City can require you to build
either conforming structures or off sites, that the City wants.

(4) COST. The Bank will require a cost break down of all of your expenses.
They will want to see a cash flow chart to pay you a voucher system.
(Note) Interesting enough, the bank will take your cost break down and
analyze it with their computers. If the cost are more. That will concern
them, and they will cut it back. If the cost is 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 ,
(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 your 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.

If everything is done right , you should be in the deal about 70% to 75%
LTV on a new proper. In fact I have seen better depending on area, and
Size of the deal.

These are just some of the steps necessary to do a construction loan.
Sandra, I hope this will be of some help to you.

Ed Garcia

for all you FINANCING SPECIALISTS…I want to tear it down & BULID ANOTHER ONE… - Posted by Sandra(Doe)

Posted by Sandra(Doe) on April 15, 2000 at 19:50:21:


Wouldn’t you know?

When one deal falls through another one pops up!

Today, I saw a home I saw 2 weeks ago. Today, I was ready to sign. BUT low and behold, the neighborhood exposed SOME UGLY THINGS…I didn’t see the first time I visited.

  • the house has an easement with peolpe walking back & forth all day every day.
  • the house in back is a known crack house.
  • the cops are always over at this house bustin those crackheads.


But the contractor I went with gave me a proposition…no not that kind of proprosition.

They bought a house way, way, way, under FMV. The area is nice. (I saw it) They want to sell it to me for 70K plus 15K profit. If I can get a construction loan to give them their asking price plus the 100K to build the house. The house could sell for about 250K

You might say, why won’t they take advantage of this???
Well, they want to get involved in a big project that requires a lot of $$ and credit.

My question:
Does anyone have any reccommendations in getting a construction loan???

like quickly…

all respnses are appreciated