Construction loan on an investment property

2 Replies

I am going to inherit some property, the lot is big enough to divide. I am interested in developing a house on the property and selling it or renting it. Is it common and normal for banks to provide a construction loans to build an property for investment property? 

@Diego Goding

I would say you are going to have to dig around awhile and make a bunch of phone calls.  I live in a very rural area and so my experience might differ from some more traditional markets, but we had to go through 5 banks before we found one that would do a construction/perm loan for us.  My partner and I also have about 10 years of experience building custom homes as well which was very important in securing our financing.  I would suggest bringing someone to the table with you who has GC experience or is a builder if you are going to try to secure financing for this project.  Good luck.

Thanks Kyle, That's what I figured. I am inheriting money. I ran the numbers, and the investment makes if the cost for construction and site work are reasonable. There is a good chance I could pay for the project out of pocket and refinance once I get renter, it's just a lot of capital to tie up at once, especially for a newbie like me, but if I will not invest in my self who will?

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