Infill build financing strategy

Infill build financing strategy

Floyd JohnsonPro Member
Real Estate Agent · Orlando, FL · Member since 2025 · 60 posts · 16 votes

I have duplex in a small city outside Gainesville Florida. It’s worth about $240k being a 3/1 and 1/1. Zoning allows me to put 2 more doors on. I want to build another duplex 2/2 each side. I have $60k equity in it that would use to secure a $40k bridge loan to start all the permitting and site work then get a construction loan to build out and refi out. Estimated Total value $560k at completion to refi out. Preference would be to use one company for everything. Is this financing process standard way to do this or is there a more fluid way to get this done?

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
2mo
I would check local commerical banks and see if they have a construction to perm loan product. 
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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2mo
    I would check local commerical banks and see if they have a construction to perm loan product. 
  • Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes
    2mo

    Your 3/1 is worth $240,000 but adding a 2/2 will increase the value by $320,000? That seems a little odd.

  • Vijay FriedmanBusiness Member
    Miami, FL · Member since 2026 · 766 posts · 122 votes
    2mo
    Quote from @Floyd Johnson:

    I have duplex in a small city outside Gainesville Florida. It’s worth about $240k being a 3/1 and 1/1. Zoning allows me to put 2 more doors on. I want to build another duplex 2/2 each side. I have $60k equity in it that would use to secure a $40k bridge loan to start all the permitting and site work then get a construction loan to build out and refi out. Estimated Total value $560k at completion to refi out. Preference would be to use one company for everything. Is this financing process standard way to do this or is there a more fluid way to get this done?

    @Floyd Johnson
    Sounds like an interesting infill project. If your goal is to hold the property long term, I'd compare whether a construction-to-permanent option is available versus using separate construction and refinance loans. I'd also make sure your projected completed value, construction budget, and lease-up assumptions all support the refinance before breaking ground. Best of luck with the project!

    DreamPoint Capital
  • Floyd JohnsonPro Member
    OP
    Real Estate Agent · Orlando, FL · Member since 2025 · 60 posts · 16 votes
    2mo

    @Eric James Hey Eric, thanks for the comment. I will give you more context to clear any oddities. The current duplex is an 1890s SFH converted into a 3/1 bottom and 1/1 top in 1994. Nothing was upgraded or renovated since the conversion before appraisal so yes that appraised for $240k. So a new construction 2/2 duplex would be of substantial more value yes.

  • Floyd JohnsonPro Member
    OP
    Real Estate Agent · Orlando, FL · Member since 2025 · 60 posts · 16 votes
    2mo

    @Vijay Friedman Thank you for the comment Vijay. I guess in my head, the bridge to construction to perm was the same if it rolled into everything together at the end but I think I see what you are saying. A construction with fixed perm from beginning would be able to start the finance process to get going? And that would just be 10-20% on my part down for that construction loan or the land covers that part? I have an ADU build finishing up and want to reserve cash I have just in case that goes over.

  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    2mo

    What would it cost to expand the 1/1 to a 2/2 or 3/2?

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