Is it possible to build a duplex with zero out of pocket? Would this method work?

Question

Ive got a friend of mine that is a bank loan officer and he believes that he could get me a loan to build a rental duplex. Lets say I can build an economical duplex for 70k and it would be appraised at 100k. So, the bank would loan up to 80% of the appraised value which would cover the entire cost to build the duplex correct? Would something like this work or not to avoid having to put 20% cash down?

Account Closed · Answer

Yes, this is possible if you can find a lender that will do a VA Construction to Permanent Loan, a deal in which you pay no closing costs, and you are 10% or more disabled from the VA. See my story as well as the VA requirements for loans:

https://www.biggerpockets.com/forums/52/topics/178...

http://www.veteransunited.com/valoans/va-funding-f...

Stephen Hundley · Answer

seems like you can ask your loan officer friend that question.

Aaron Montague · Answer

@Dan Ward

If you can build duplexes for 70k, I'd recommend you go into the construction business :)

Dan Ward · Answer

Thanks for the input! I have found the most difficult part of getting into property ownership is getting your first one. I currently own a home, make a good living, but I just cant see digging into my nest egg to put 20% cash down on a property. It must be because I'm sure a cheapskate. And oddly enough I have done some work with a local architect and although I wont actually build a duplex for 70k, it wont be terribly far from it. Its more of a loft style concept, one bed, one bath, industrial style with a monolithic slab and a similar design to what you see in the picture.

Dustin Smith · Answer

Is it possible?  Yes.  Through a bank, not likely.  I'm having a hard time figuring out what the problem is, however, if your friend can and is willing to get you every dollar to build the duplex?

Is it possible to build a duplex with zero out of pocket? Would this method work?

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