Investor · KY · Member since 2022 · 204 posts · 77 votes
I have about 60K in Heloc money I could use to purchase land lot in the Red River Gorge of Campton KY, pay that land off with the heloc, then use that paid off land to secure a construction loan from the bank or PM lender for a new ground up build. We currently have used our personal funds to purchase one lot already and have our first ground up construction going right now. But are wanting to move with pace! Any recommendations? Preferably the plan would be to pay the heloc off on the back end when we refi out of the construction loan or sell the property later once build is completed. I know the big thing would be to factor that full heloc payment into your carrying costs equation.
Yep, totally doable. Your basically cross-collateralizing the purchase of the land with your home, and then using the "free and clear" land as your equity down for the construction loan. However, why not just use the HELOC funds as the down payment on the construction loan? Unless your going to buy the land at deeply discounted value off-market and then have it appraised. Am I missing something?