Funding a new construction for rent
I purchased a lot near my home that I want to build a small house on. This would be primarily used as a rental property and also my first investment property of any kind. I’m planning to build/contract an 800sqft, 2 bed/1 bath house. We have a good mixture of mobile homes and older homes in my area that usually rent for $500-$600 a month. I have done some number crunching and feel like I can get it built in the low $50k range. I’ve been employed with a custom builder since ‘99 and have had my residential builders license since ‘04 so most of the work would be on me. The rental market is strong here and I would likely try to rent it out at $600-$650/month. I’m capable of such a project as I’ve built many homes as a superintendent, the issue is funding... Since I’m not an actual building company and have “no experience”, finance companies don’t seem to like my idea and recommend private funding. The crazy thing is that I’ve huge equity in my home, good credit, and money in the bank -just not an investment minded wife (which could lead into a whole different conversation). Unfortunately, I’m clueless on how to find anyone that would want to tie up their money on something like this. Is my idea of owning homes that I build too far fetched for investment financing? I ran into the same issue years ago when I dreamt up building a spec house. For me, these ideas seem almost impossible unless the money is there to be spent without tapping into personal funds. I don’t know what feedback I’m looking for other than maybe one day get it all figured out and live out my real estate investment dream.