BUYING AND BUILDING ADDITIONAL HOME
I am looking to buy a property in Los Angeles area and build a second home on the same lot. Upon building the home I want to borrow money from hard money lender, refinance to a conventional loan and pay the lender. I do qualify for a FHA for the first property, but have trouble getting a hard money lender to finance the construction of the second home. Any advise is greatly appreciated !
From my experience Hard Money won't lend on your primary house. You'll have to get bank financing. If that can't be done then get Private Money Lenders (family, friends, boss, etc). But you'll have to show them the Business Plan. Something like - I but my front house and your funds builds the second one. When done, we sell the whole property and it makes x- money and you get your funds back with x- extra as investment income.
If you wanted to rent the back then no way any private money will get in on that.
Hard money won't lend me even if i place them as a 1st person/lien on my primary property; in order for them to secure their investment on the construction of the construction for the second property (in the same lot).?
Hi.
If you are getting an FHA loan for the property, then that lender will take 1st place. How were you planning to give 1st place to another lender? Do you have another property you could offer as collateral? As said above, your best bet would be private money. It will be very hard though to convince someone to loan money when they have zero collateral for the project (until your house is completed).