New to Real Estate · Cleveland, OH · Member since 2022 · 21 posts · 15 votes
Has anyone ever gone the new construction route for investment properties? How does it work getting a construction loan? And do you convert it to a conventional 30-year mortgage after it's complete?
Contractor · Nashville, TN · Member since 2014 · 1k+ posts · 1k+ votes
3y
That model is called build to rent and I have done a few single-family houses. You get a construction loan that automatically rolls into an amortized loan. All that is set in motion at the beginning so there's no refinance or anything. I always got commercial loans, but there might be a construction loan that rolls into rental and the conventional world. You could easily talk to a mortgage broker and have an answer in 5 minutes. Although those guys sure love to talk so it's probably more like 30 minutes.
Investor · Statewide, MO · Member since 2011 · 814 posts · 425 votes
3y
Generally these are financed 12 months interest only with a 4 or 5 year trailing term / balloon on a 20-25 year am. You'd have to go the fannie/freddie route to get 30 year financing and as far as I know, would need to do this after the home is complete.