Fourplex /Triplex-What areas are good for new construction?

[Joe Gilroy]

Fourplex /Triplex-What areas are good for new construction?  

We  would like to buy a large lot that would allow new construction of a four plex or a triplex where we could live in one unit and rent the others. 

Looking for information on the best areas / states and also information on financing available .  

Thank you  

[Mike Wood]

@Joe Gilroy On financing side, most construction loans will require 20-25% down payment of the total construction costs, in the form of cash or equity in the land. By total construction costs, I mean land plus, build costs, plus development cost (plans, surveys, impact fees, etc.), For for a project with $100k land costs, $400k build costs and $25k development costs, your total construction costs would be $525k. Your down payment would be $105k (20%) to 131.25k (25%), depending on the terms from you banks. I am doing 20% DP loans on my construction projects. Please keep in mind that the banks typically only care that cost are less than the appraised value, they will not loan on project equity in my experience. Assuming that it does not cause issues with teh DTI ratio, you should be able to use a HELOC for the DP.

Your permanent financing will most likely be done at 75% LTV, but this can use the built in equity. Be careful with cashout refi's, as the LTV drops to 70%. These LTV rates are for investment properties, you might be able to get better if you are an owner occupant.

I also agree with @Manolo D. & @Kevin Fox about land loans.  Banks typically don't like them.  I typically purchase my lots first, then use it and cash as the DP for the construction loan.