Hello, I have a property that is not owed any money , the title is free an clear and the sell prices goes for 380-395K. My issue is that I need to take out at least 85-90% to be able to build another property and placing a mortgage on this one. My credit is currently not the best so I can't re-finance through a conventional means . The reason for the 85-90% requisite is because I have to add the price of a vacant lot to the 2nd property's build cost. What loan product can I use to keep my current property , rent it so it can help pay for the loan while I build the second property ? I am a builder so I know what my cost to build the 2nd property will be , please help I currently only see the sell option of the current property i have.
Lender · Savoy, TX · Member since 2020 · 187 posts · 78 votes
2y
Hello Andy, if your 1st property is finished you will be able to pull 75-80% of the market value out of it, if you have a minimum of a 660 Credit Score you can get a DSCR rate which will be in the high 6 to low 7% range. For your other new construction project we can get you funding for up to 90% of costs, please let me know what your credit score is, you may also want to bring in a credit partner. If you have been building for a while we also offer a 5 year Guided line of Credit through the SBA. This program has bi- annual payments which mean you only make payments 2x per year. Rate is currently Prime WSJ 8.5% plus 3%, but the nice part is that as rates come down, so does this loan rates.
Hi Dustin, the credit may be an issue since we just took out a vehicle . I don't think we would make it to a 660 . As for the other project we have a vacant lot that the owner doesn't mind doing a joint venture with us . In that he gets the price of the land once we refi or sell the property. The land has been cleared already and we're about to start permitting process. Would we still be able to get financing for it now or would we have to wait further down ?