Quote from @Caroline Gerardo:
finishing up a new construction STR build. Is the job card signed off and the project complete? Rare to find lenders who want to do a loan with possible mechanics liens.
in an LLC with a partner to do this. Although I think our personal names had to be on the loan in order to qualify. The lender made you transfer title to personal names and it's still that way? You know property taxes will increase?
i finish construction on the new build, am I able to use a HELOC to pull funds to continue building additional units on this raw land? The zoning allows it, but we do not have funds to build right after construction. If property is odd, legal non conforming, multifamily (more than 4) you are going to have big trouble with a residential appraisal. HELOC doesn't care what you proposed STR is, that does not matter. Valuation does. FICO 721 does. Non owner HELOCs are only for the perfect deals as they are high risk for the lender. My guess is appraisal will be lower than you think as comparables are what dominates residential valuation and you say there are no comps.
The other questions are: what comps are similar closed in past three months, what are your middle FICOS, what income do you both show on IRS returns past years, what loan to value is the first loan you have, when is this project operational, what exactly is the property...
Hi Caroline! Thanks for sharing some of your input and knowledge!
I am an optometrist and my business partner is an architect/contractor. I put my paycheck in a shared bank account every 2 weeks and he has used that to build this 750 sq ft STR cabin with 3 unique lofts. We have built the entire thing ourselves. We took out a 40k loan out on the land at 65% LTV, but everything after that we have directly paid for with cash. There are no mechanics liens. We are hoping to be finished in May, start producing income, and then HOPEFULLY take a loan against the new build to build 4 additional units.
I believe the title is in our LLC, but we had to use personal assets as collateral due to the fact that the LLC was new and I had just started working (i am a recent graduate). I am all in on this project.
We are in a vacation rental dominated town. Not any houses near us other than resorts with multiple small cabins.
From the previous posts of you and others, it sounds as if i will not qualify for a HELOC. That is alright, just looking for other options.
There have not been many comps sold in our area sold in the last 3 months. The most comparable is a condo for about 450k.
My partner and I have great credit scores. He has consistently made 100k+ for the past few years and I will gross 160k+ as an optometrist this year.
We are capable of taking things slow...putting our income + the new rental income in the shared account and slowly building the next 4 cabins. But we are young and impatient lol and very excited.
Thanks for the input everybody!
