All Forum Posts by: Account Closed

Thanks Keith and Mike,

These rates would be great but what are the upfront points paid on your loans?

Also, do your loans include the land cost when calculating LTC?

Currently I'm building spec homes on land that I buy with all cash using a construction loan that resembles a hard money loan with ~10% APR and points. My builds are fairly quick and have been completed in 2-3 months. I'm able to get projects done fast because most of the time I'm fronting my own cash at the front end to get permits, surveying ,design approval and sometimes even foundation completed along with several other deposits on windows, doors and cabinets. After I get the construction loan funded I immediately pay myself back (except for the land) and pay the rest of the construction expenses with the hard money funds. This means that I'm already several weeks into a project before I take on the loan, saving me interest but I'm taking on serious costs in points for a loan that only last 2 months. Additionally, once I have the loan pressure is on to take the first offer I'm given because of the daily interest costs on the loan, I've lost out on an extra $30k on one deal because I pulled the trigger 10 days too early on an offer.

I’ve tried to present bankers an offer to fund the loan but I haven’t found the right “combination” as Brandon Turner likes to call it.  This gave me the idea to reach out to the BP community for advice on the following:

• 1.Is there a specific stage in the build that would catch the interest of a banker?, such as:
  • a.Once plans are approved and permit is granted
  • b.Once foundation inspection is passed
  • c.Once framing inspection is passed
• 2.Are there specific banks that fund construction projects that I’m missing out on?
  • a.Are there special appraisals needed?
• 3.Should I give up all hope on saving hard money costs and write it off as a cost of doing business until I put up all the construction costs myself?

I've built aspec home in a development that I see as a gold mine with great returns. Homes are selling before the siding goes up, however the biggest hurdle is getting an empty lot. I have found dozens of nice, flat lots with privacy that fit my floorplans perfectly, the only catch is that most of them are not up for sale. I have pulled the public records on the lots and I see many are owned by trust accounts while half of them seem to owe some amount in back taxes. I want to contact the owners and offer cash with all closing fees and taxes paid for by me. I figure thatmost of these lots get overwhelming interest from agents but I would like to save the seller's their 6%+ in fees and offer a deal without RE agents involved, with a guaranteed closing under 5 days. I’m coming to the BP community for advice, some topics I’d like to discuss are;

-Does anyone have experience with these "cold call" purchase offers?

-How would you recommend approaching the land owners?

-Other than opening with "I am a private investor, NOT a real estate agent", what points would you recommend I make to get a deal done. 

Hello all,

I'm excited to see how bigger pockets can bring together great real estate investors.  I know I can bring a lot of knowledge to anyone looking to build or rent in California but i'm also hoping to grow and portfolio.  I have flipped, rented and built spec homes in both Northern and Southern California. 

-Chris