New Construction Financing

[Stephen Oesterreich]

Hi,

I work extensively in commercial real estate development, which is a different set of investors and financiers. There is a model we have been very successful, and I am interested to find out if it can be applied to residential as my partner and I are working on launching a new housing development venture.

Is there a lender that could provide:
-100% financing
-Builder/developer fee treated as equity down payment
-Builder/developer willing to sign purchase agreement for residence upon completion

Thanks in advance.

Stephen

[Chris Seveney]

@Stephen Oesterreich

I have never seen any of them be acceptable on a commercial side.

[Stephen Oesterreich]

10-4, I appreciate the feedback.

[Jay Hinrichs]

in SFR I dont think the builder developer fee is enough to create any meaningful equity to the lender.

in many instances in SFR construction the land must be paid for and is the equity.. you could have builder fee paid on back end and not on the loan which would make the loan smaller

and a tad more equity but they want to know where the hard dollars are going .. and if anything the banks are getting much more conservative right now.. moving from 75% ARV to 65% ARV in many markets. NOT all but it did just hit us in FLA . on top of this the bank we are using which is a regional SE bank of good size.. they capped their SFR loans at 400k total. so they are not doing any high end stuff at the moment.

[Stephen Oesterreich]

Great info, Jay. Thanks for sharing.