Construction loans for 2-4 units

[Eli Jackson]

I live in an area where there's low inventory but high demand for rentals, I'm looking into what type of construction loans are possible for 2-4  units any suggestions would be appreciated.

[Nick Belsky]

@Eli Jackson

All kinds are available.  Depending on your experience and liquidity, you can build just about anywhere right now.

Lenders will look for 10-20% LTC in down payment and you'll need to have enough reserves available to cover loan costs for a time during the term (usually 12-24 months).

These loans are done on a draw basis, meaning you will have put the first dollar in then be reimbursed as you progress through the project.  Watch out for lenders who charge Dutch interest!  That means they charge you on the full drawn amount even though you haven't drawn it yet...

Working with a mortgage broker who knows GUC will be a huge advantage for you.

Cheers!