I have 4 new construction homes that I am trying to start the building on. I am having a hard time finding the financing. Do the HML’s typically lend on LTC or Future LTV?
I don’t know if it is best to try to finance one at a time or do all 4 at once?
I have tried going with just one at a time through the banks but due to poor FICO score I need to come in with $30k per home which I don’t have.
The few HML I called don’t do new construction.
Numbers are:
Future LTV $2.27 million (all four combined)
Cost to build $1.5 million (all four combined)
Geeze only $30k, there requesting that you come in with only 2% of the total cost, that’s pretty excellent. How low of a fico are we talking? If its below 620 and there offering you that, that’s a really good offer.
What was your Fico score? With all the subprime problems going on now it sounds like this will be pretty difficult to do. There were a few lenders that did construction loans, but most of them didn’t do spec loans. Sounds like a very risky thing to do in general anyway. With the tightening up of credit, that will eliminate 500k-1 million borrowers and the supply of inventory may continue to grow for the next year or two.
ok that makes more sense. What state is this property? I can connect you with a hardmoney source that will go 65-70% of the completed value. On a first time deal though there going to want at least 3% of total cost into the deal.
You will find loan programs that LTV (loan to value), LTC (loan to cost) or ACV (after completion value).
100 LTC (between 65-75 ACV)
10.99%~11.99%
4-5 Points
Spec or Owner/Builder Allowed
6-18 month maturity (extendable to 5 years)
Interest Only Payments
Repayment is based upon disbursed funds not total loan amount
Not FICO Driven (equity driven)
No Reserves Required
Individuals, Corps. Partnerships, Trusts and LLCs allowed
No Prepay