How to estimate cost of New Construction

Question

Good Morning

I am interested in building a new construction single family home in Antioch Il. I would like to know some of the processes and procedures some have gone through.

what type of funding would work best for land purchase and new build?

What should my first 10 steps be?

How did you figure cost of new build per square feet?(how much)

Looking for the confidence to take this very big leap in investing any advice will help thank you in advance.

Anna Swartz-Lopez · Answer

Hi Traci,

Good for you! It is always difficult to get started, and I applaud your willingness to begin.

As a loan broker who works on the financing side of things, let me just say that lenders usually prefer that you own the land outright. Financing land can be very difficult - though not impossible. Your project will probably flow more smoothly if you purchase the land so there is no debt on it, and then finance the new build.

Lenders also feel more comfortable extending these kind of loans if the borrower is experienced. For your first project, perhaps consider partnering with someone who has the experience to guide you through the process, and also the experience that will make a lender more likely to finance your build. A JV, or joint venture, can be a useful tool when one party has the capital and another party has the experience.

On another note, local community lenders will be more likely to work with you than larger banks. In each community there are usually one or two local lenders who specialize in financing single family home construction. Ask around and try to figure out who those lenders are in your area.

As I mentioned, I am a loan broker and I do work with specialized lenders who operate nationwide and who will fund this type of construction. However, you really need the experience piece to get approved with those lenders.

Hope that helps! And good luck to you!