Construction loan for a triplex and 2 ADUs
Hello, so I've been looking around trying to find a bank that would do a construction loan on a triplex, I paid for the land, it's zoned right and I've got the builder and is now in the design phase. Banks are asking for experience (3 builds in the past 24 months and such) is there anyway around it ? will occupying one of the units help? should I try and get financing on only the triplex first and then in the future build the 2 ADUs ? any help is greatly appriciated.
When using private and hard money lenders, they want you to have experience supervising renovations before they give you money for new construction. Have you done any fix and Flips in that last 3 yrs?
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Lender
- The Trinity Company, LLC
I haven’t done any flips.
Quote from @Miranda Holland:
When using private and hard money lenders, they want you to have experience supervising renovations before they give you money for new construction. Have you done any fix and Flips in that last 3 yrs?
Quote from @Ali Barca:
I haven’t done any flips.
Quote from @Miranda Holland:
When using private and hard money lenders, they want you to have experience supervising renovations before they give you money for new construction. Have you done any fix and Flips in that last 3 yrs?
Do you have contractor experience in some other way? Have you supervised renovations on a rental? Why do you want to start with new construction?
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Lender
- The Trinity Company, LLC
Don’t have any contractor experience on paper but I do know my way around renovations, and is not scared to tackle something out of my boundaries. so I currently have 2 rental properties, had a big chunk of cash and don’t want to take the slow ride to financial freedom. this deal was too good for me to pass on; A land in a fully developed community, snatched at an out of this world price, multi family and ready to be built on not much grading needed.
Quote from @Miranda Holland:
Quote from @Ali Barca:
I haven’t done any flips.
Quote from @Miranda Holland:
When using private and hard money lenders, they want you to have experience supervising renovations before they give you money for new construction. Have you done any fix and Flips in that last 3 yrs?
Do you have contractor experience in some other way? Have you supervised renovations on a rental? Why do you want to start with new construction?
Alot of private lending companies would lend to new investors when it comes to fix and Flips, bridge and rental loans. When it comes to large rehab projects and new construction, they tend to require at least a few regular rehab projects as experience before they give you money for new construction.
I believe you have a chance of getting around that if you partner with someone who has done rehab projects recently and/or prove that you have quality help. Your personal experience with construction helps too. You definitely want to show lenders that you have the knowledge and personnel in place to compensate for you not having the experience of supervising rehab projects yourself yet
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Lender
- The Trinity Company, LLC
Quote from @Miranda Holland:
Alot of private lending companies would lend to new investors when it comes to fix and Flips, bridge and rental loans. When it comes to large rehab projects and new construction, they tend to require at least a few regular rehab projects as experience before they give you money for new construction.
I believe you have a chance of getting around that if you partner with someone who has done rehab projects recently and/or prove that you have quality help. Your personal experience with construction helps too. You definitely want to show lenders that you have the knowledge and personnel in place to compensate for you not having the experience of supervising rehab projects yourself yet
But banks offer financing to build single family homes for regular families with no experience; my question is can the same concept work here if I occupy one of the units?
Quote from @Ali Barca:
Quote from @Miranda Holland:
Alot of private lending companies would lend to new investors when it comes to fix and Flips, bridge and rental loans. When it comes to large rehab projects and new construction, they tend to require at least a few regular rehab projects as experience before they give you money for new construction.
I believe you have a chance of getting around that if you partner with someone who has done rehab projects recently and/or prove that you have quality help. Your personal experience with construction helps too. You definitely want to show lenders that you have the knowledge and personnel in place to compensate for you not having the experience of supervising rehab projects yourself yet
But banks offer financing to build single family homes for regular families with no experience; my question is can the same concept work here if I occupy one of the units?
Lending criteria vary from lender to lender and that can be frustrating. Most private lenders only lend for non-owners occupied investment properties. They do that so they won't have to fall under the same laws and regulations as institutional banks.
So it's best to ask the bank offering the program you're speaking about if living in one of the units will strengthen your position. They might consider single family to include triplex for that program but only they would know. If it's your first home you might qualify for 1st time home buyer benefits.
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Lender
- The Trinity Company, LLC
I've been working to close a GUC deal in Tenn since March. It was a real learning experience. These are the absolute toughest loans to get closed.
I'd hate to tell you this, but if you personally have no builds under your belt then you are drawing dead. The one thing GUC lenders ask for is experience from the Borrower. You have one workaround and that's if your builder agrees and that's to put him on the deal for 10% because then you can use his experience.
Then once you close the deal, you get exactly $0 at close to start. The Lender will expect you to get started and then be reimbursed. That's what is snagging my deal. I spent three months working with this builder getting the lender everything and they told him to have 150k at closing and he showed them that amount in a bank statement and then they said, oh by the way we need to see another 250k for that get started money. So now he has to find that money.
GUC works on a reimbursement draws, so you need to front the money for each phase and then get it back.
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Lender
- 267-251-7649
- [email protected]
Hey Ali! I may be able to help you with this, add/message me and lmk if you want to connect for a call.
@Ali Barca...I didn't know if you found what you're looking for yet, but is this investment or is it owner-occupied? I somewhat skimmed the post. IN this market, banks are pulling back and tightening up even if you were to occupy the units. Do you have a GC on the deal or were you planning to do this yourself? That's another major factor right now - most lenders, bank or private want to see a GC. Owner builder is usually very difficult. I'd be interested in learning more about what you've got going on.