Need Construction Loan - building my first 3-flat!!
I'm building a 3-flat in East Garfield Park, west side neighborhood of Chicago. I own about 80 MF units, but this is my first ground up construction. I have a partner who is the GC. I've paid for the land, architect/permit fees, excavation and foundation out of pocket. But I'm looking for a $500k loan to finish the project.
This will likely be the first of many. About to go under contact on a second lot in the same area. So looking for a lending partner that will help me grow as efficiently as possible.
Also would love to connect with anyone doing something similar or with any development wisdom to share. Thank you!
Most Popular Reply
@Roseann Koefoed first congratulations!
I’d recommend getting terms from private and hard money lenders. Likely 5-8 companies that UW loans in this market.
You can also try regional banks to get the construction and stabilized loan terms.
Make sure you have a backup plan (contingencies) for if/when obstacles arise and you’re required to spend more money and possible more time (3-6 months) to the overall project.
For your first ground up it might make sense to bring in your contractor as an equity partner building the project at cost in exchange for equity. That way they truly care about the project’s outcome (time and money) and are your partner helping you solve the challenges that will inevitably arise during construction.
Taking a smaller piece of the pie to gain experience can go a long way in the bigger picture.