Hey all,

I have 7.5 acres in Texas in a fast growing community. We have been through all of the engineering and permitting and are approved for 30 homes. We are in our 4th year of general contracting so we have built around 40 homes at this point so I feel fairly confident in our abilities and pricing. The local bank seems to be interested in the project but that's tbd. 

We are looking to build small homes (lots of retirees) to hold as rentals. Total project is estimated to cost $2,900,000. I've been told I will need at least 20% down. My personal credit is good but not great. I'm 31 years old and I kind of feel like this is a long shot/pipe dream. But I'm hopeful. Any advice or tips related to financing projects would be wonderful and greatly appreciated! 

What are the odds of my bank or another actually funding this project

You're more likely to need 35-50% down on a construction loan. But if you own that 7.5 acres free and clear and it could part of your contribution to the deal. You can bring in partners for the rest of the money.

However, have you done any construction lately? Have you priced out your deal? $97k per house seems really low considering where costs are nowadays. Lumber is at $1500-1600 now compared to $450 or so a year ago.

Hey Michael,

The local bank that we have worked with before (although nothing this big) has said again yesterday that it would be 20-25% down and I can use the land and another property I own. So that will help significantly. 

And yes, we price things weekly. We have 6 houses under construction right now and while the prices are painful, we are being creative and making it work. Hoping for some relief in the fall and next year, hoping anyways. 

OK, sounds like you have it covered then. If your bank is saying they can give you a loan then what exactly is your concern?

I've never gone through this process and it seems a little too good to be true scenario. So I'm wondering what a more realistic loan usually ends up looking like. Or what people have experienced in the past when getting a construction to permanent loan on a multi rental project.