Banks, and Designers, and Bears....
Actually, just banks and designers.
I found a good lot and I'm building a duplex. I had a great conversation with a builder who was willing to give me a ballpark estimate of construction costs that sounded fairly reasonable. He was also full of helpful suggestions to save costs and such. He even recommended a designer that he said works with investors.
Problem with this designer--he refuses to give me any idea, not even a ballpark, of what he's going to charge me. First he said he didn't have enough information, like number of stories, the lot, etc. So I sent him a detailed e-mail with everything I could think of--sq ft, stories, style, address of lot, etc, etc... answered every question he had asked--even included my rudimentary sketch of the site, and he still hemmed and hawed and refused to give me any idea of what I'd be paying him if we worked together. Is this normal for that profession? Because I don't think the idea of committing to buying something that could run upwards of $10,000 without knowing the cost is very good business.
I've also run into a surprising problem with my lender. They have no problem with giving me a loan for a purchased duplex, but their construction loan division will flat out not do a construction loan on an investment property. They did refer to someone who would though.
I thought my problem was solved, but it wasn't. When I asked the new guy about the terms of rolling my construction loan into a mortgage, he quoted me basically commercial loan terms: 20 year, balloon payment at 9 years.... When I said "huh, it's 2 units--residential" he said those are the terms because it's an investment property.
My current plan is to do the construction loan with bank #2 and mortgage with bank #1. Hopefully there isn't some hidden issue with that next.
Anyone else have these problems?