Land and construction

[Samantha Nava]

Hi! My first posting here I wanted to ask about something I thought about Can I purchase land with owner finance, then get a hard money loan to build a home? Obviously to sell after, if so how does selling works since its two different loans. 

[Jay Hinrichs]

Quote from @Elealeh Fulmaran:

Yes, it’s doable, but line up the structure upfront. Buy the land on seller financing with a recorded first (or second if seller insists) and explicit subordination/permission for a construction loan. Then have a hard money or construction lender fund vertical with a deed of trust in first position during the build; seller stays subordinated. Use a clear budget, timeline, and exit plan to either sell on completion and pay both liens from closing, or refinance to permanent debt and then sell or hold. Key: get the seller to agree in writing to subordinate, verify your lender’s lien priority, and build a draw schedule that covers carrying costs and contingency.

for a novice first time builder while this is technically possible in reality it will never happen unless the seller has no clue and the lender is more clueless.. or if the lender is a relative.