Labor ??? 70,000
Sale price 140,000
Minimum Loss 33,000
Could this be why you cannot find financing? Forgive me for being presumtuos but if you know how to build a house how could you not know this simple math?? Does this not sound like a upside down deal???
We have a private person who is holding the first note right now on the lots, I guess that I could ask him to move the notes to a second or pay him off when we find a construction loan or sell the home.
The total price we need to build the first house is between 50-70k at the most since we have almost everything needed to build the house in a tractor trailor right now.
Our labor we are doing 90-95% of that ourselfs and like I said I think we have enough building material to build one or two homes already but didnt want to start the project without some financing just incase we needed something and had to go out and purchase it.
If you can do this deal this cheap, I do not see why you cannot get a loan with your equity in the deal as your down payment. All you need to do is get an appraisel. If you do not want to pay for an appraisel up front, gather all of your iformation and go sell it to a bank, they can ussually make an intial commitment, based upon the information and subject to the appraisel. If the property appraises at 140k, you are good to go. If the first house goes well they will be anxious to do more…does that make sense?
Yes it makes sense the problem we are running into is that the banks want us to own the land free and clear first before they will loan us the money.
And although we are licensed carpenters they want us to be licensed general contractors and were not such as life. So our first step is to find a way to come up with 25k to pay the first lot completely off and then go to a private lender instead of a bank.
Which leads me right back here looking for anyone who would loan us the money to pay off the lot or to pay off the lot and give us a construction loan.
We can build our own home and we can file permits in other peoples names to get around the license thing but the banks wont give owner builders the funds in the state of florida that I know of ., atleast not unless we paid off the lot first anyways and that still leaves me right back here seeking someone to loan us enough money .
Since you own several lots, and this is a private lender, who it would seem would have more flexibility to work with you, would he be willing to release the lien on one lot, and place a larger lien on the other lot(s) so you can start building? There is probably more risk there for the lienholder if the lots aren’t worth what the lien is, but if you have a feasible plan, maybe you can talk him into doing it.
Just a thought–I have no experience in vacant lots or building houses!