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Demolition and new property in downtown Chicago
I have a family member who currently owns (100% equity) his childhood home in the West Loop while the entire neighborhood has massively changed over the past 15 years. The building was constructed in the early 1900s and will likely need to be demolished. However, cost for demolish would be about 10-20k. He is currently seeking 500k in financing to build 2-unit multifamily. Rents around the area go for 3.5-5k for a 2 bd, 1 bath. I've suggested a construction loan then to refi once the property is completed.
What would be the best strategy for this situation? Any loan strategies or any tip he should look out for in regard to working with construction companies?