ISO: Private Lenders to fund purchase of lots to build on

[Eddie Auguri]

Howdy! I have a builder who's starting up here in Oklahoma looking to purchase 97 lots in NW OKC. We've found funding for the construction costs, but not for the actual lots themselves. The construction financing is dependent on already owning the lots, so this funding to purchase the lots is the last hurdle.

This builder grew up in the business and built homes in Kansas City for 30 years. After the crash in 08 he retired, moved back to Oklahoma, and now wants to come out of retirement and start building again. Send me a message to connect, we can set up a time to call and we can talk to see if it's a good fit.

[Chris Seveney]

Quote from @Eddie Auguri:

Howdy! I have a builder who's starting up here in Oklahoma looking to purchase 97 lots in NW OKC. We've found funding for the construction costs, but not for the actual lots themselves. The construction financing is dependent on already owning the lots, so this funding to purchase the lots is the last hurdle.

This builder grew up in the business and built homes in Kansas City for 30 years. After the crash in 08 he retired, moved back to Oklahoma, and now wants to come out of retirement and start building again. Send me a message to connect, we can set up a time to call and we can talk to see if it's a good fit.

 we have a lender that funds acquisition and construction, but must have a hefty equity percentage into the deal.

[Eddie Auguri]

Quote from @Chris Seveney:

Quote from @Eddie Auguri:

Howdy! I have a builder who's starting up here in Oklahoma looking to purchase 97 lots in NW OKC. We've found funding for the construction costs, but not for the actual lots themselves. The construction financing is dependent on already owning the lots, so this funding to purchase the lots is the last hurdle.

This builder grew up in the business and built homes in Kansas City for 30 years. After the crash in 08 he retired, moved back to Oklahoma, and now wants to come out of retirement and start building again. Send me a message to connect, we can set up a time to call and we can talk to see if it's a good fit.

 we have a lender that funds acquisition and construction, but must have a hefty equity percentage into the deal.

The lender needs high equity, or the buyer receiving the funding needs to have a strong equity position?

[Ko Kashiwagi]

So the builder is looking to finance the entire construction costs? If so they can get a ground up financing and use that cash on the down payment, as ground up financing can finance some of purchase and most of construction costs (on a withdrawal basis)

[Eddie Auguri]

Quote from @Ko Kashiwagi:

So the builder is looking to finance the entire construction costs? If so they can get a ground up financing and use that cash on the down payment, as ground up financing can finance some of purchase and most of construction costs (on a withdrawal basis)

 No, I should have specified. We've sourced financing for the construction, but not for the lots themselves. The construction financing is a program that requires the builder to already own the lots.

[Jay Hinrichs]

Quote from @Eddie Auguri:

Quote from @Ko Kashiwagi:

So the builder is looking to finance the entire construction costs? If so they can get a ground up financing and use that cash on the down payment, as ground up financing can finance some of purchase and most of construction costs (on a withdrawal basis)

 No, I should have specified. We've sourced financing for the construction, but not for the lots themselves. The construction financing is a program that requires the builder to already own the lots.

you need a money partners / equity partner.. the vertical loans will want first position. And in your market the lot costs are so low you need to pay cash for them and may still need more equity/cash.. in higher priced markets were the lot cost might be 40 to 50% of the total cost to build you can get a land advance but your still going to need equity/cash to do those as well.

so thats your mission find a captial partner.. or put a syndication together to raise the money and partner to build out the homes.. really going to depend on what kind fo NET NET NET profit is on each home after land a build costs.  I have seen builders in OKC that were fine making 10 to 15k a house.. but they will slam 100 of them out in a year so they make 1 mil to 1.5 mil profit and seem to be happy with that..  

[Joshua Huang]

Happy to discuss further on how we could align. Send me a good email through dm. 

[Adam Sikorski]

Hi Eddie, 

One strategy we've used on land deals is opening contact on the dirt subject to building approvals. Most landowners understand this process (your broker can help). Once the land is entitled to build you can secure financing to purchase the land & start construction at the same time. Hope that help! 

[Jay Hinrichs]

Quote from @Adam Sikorski:

Hi Eddie, 

One strategy we've used on land deals is opening contact on the dirt subject to building approvals. Most landowners understand this process (your broker can help). Once the land is entitled to build you can secure financing to purchase the land & start construction at the same time. Hope that help! 

u do need money for the horizontal or you need a loan for the horizontal if this is a new plat.. for infill this works great.