Flipper/Rehabber · Columbus OH & Los Angeles, CA · Member since 2009 · 50 posts · 48 votes
I am looking at 3 plots of land in Columbus to do new builds on. The owner is selling all of them together for around 190k and is willing to do owner financing on the deal, we haven't discussed terms yet. I have never done a new build, so I am curious to how I should put this deal together. How would one go about financing the land AND the new builds? Can anyone with land/new build experience help with this?
Rental Property Investor · Minneapolis, MN · Member since 2020 · 540 posts · 285 votes
5y
@Justin Campbell
Get the owner to delay payment until after the build so you can count the property as your equity. Need to get 3 contractors to bid on the project (however without Plans that may be tough), be aware lumber prices are 170% YoY. That lot price does seem high... Zillow filter Sold land for the last year and see what the comps are
Real Estate Investor · Crescent Mills, CA · Member since 2010 · 127 posts · 74 votes
5y
> Need to get 3 contractors to bid on the project (however without Plans that may be tough)
FWIW You can get financing and/or bids with architectural drawings.
But Columbus, OH? Why?
I had friends that ended up with properties in OH (Cleveland, I think) by buying non-performing notes. They finally got out of the last one last fall (November, 2019???) and were totally relieved. Cash flow - mostly yes. Headaches, yes. Appreciation, definitely no.
Get the owner to delay payment until after the build so you can count the property as your equity. Need to get 3 contractors to bid on the project (however without Plans that may be tough), be aware lumber prices are 170% YoY. That lot price does seem high... Zillow filter Sold land for the last year and see what the comps are
This is a good way to approach this. Thanks for the info. I wasn't aware of the lumber costs amongst many other variables. I will also be negotiating these lot prices for sure, they are bit high due to the attraction of the area. How would you go about financing something like this? I was considering some private money along with a construction loan. Whatever option presents the most leverage. Thanks again for your input.
> Need to get 3 contractors to bid on the project (however without Plans that may be tough)
FWIW You can get financing and/or bids with architectural drawings.
But Columbus, OH? Why?
I had friends that ended up with properties in OH (Cleveland, I think) by buying non-performing notes. They finally got out of the last one last fall (November, 2019???) and were totally relieved. Cash flow - mostly yes. Headaches, yes. Appreciation, definitely no.
Columbus is where I'm from and I own several properties there. It has always done very well for me as far as cash flow AND appreciation. It just depends on where you are buying and for how much of course. My main reason for considering this deal is because I come back to Columbus very often and I am always spending money on AirBnB. I figured, why not build one right next to the airport? Pilots,FA'S, and visitors would always book it and I would have a place to stay everytime ; )