Hard money loans for new construction
Have anyone used HML Vs construction loan when doing new construction on duplexes? If so how was the process?
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If you own the land outright you can use it to put up for collateral and that'll cover any additional down payment on the loan. In my area the going rate for Ltv is 65%-75% or more depending on experience. The soft costs will not be counted into the down payment but it will be a factor in determining how strong you are. Nearly all HML use draw systems so if you don't have a ton of money in the bank make sure you talk with the lender about putting the soft costs into the loan so that on your first draw you get reimbursed for your soft costs and some money to play with. Talk with your GC/subs and explain your draw process and when you'll get paid. For example I tell my subs (I'm my own GC) that whatever you can get done by Friday it'll get inspected and I'll pay you on next Wednesday. Usually they're cool with that if you're up front with them, and that ensures you're never too out of pocket waiting on your draws. Pump some extra money in contingencies to cover some of the heavier payments towards the end of the project if need be