New Investor Help! Multi-Family New Construction

[Lauren Garritano]

Hello Everyone,

My husband and I are new into real estate investing and are working on our second deal. We accomplished our first project three years ago where we bought and renovated a large split level home in FL. We had such a great successful first deal but we are selling it now because it doubled in value and we want to put that money towards a new investment relocated it closer to where we now live.

My husband is military and we live in NC near the Wilmington area which is one of the fastest growing markets right now and we would really like to do a new construction for a Quadplex. We are just now getting the information to see what is possible to do. The issue is the numbers work out best for us to have 20% down on this new venture and be able to accomplish all we want to accomplish but Fannie Mae's guidelines is that there is a minimum of 25% down on an investment property which would throw off all of our numbers. The basic information we have right now is:

1. With 20% down, we should have enough to pay off our debt and put $100k down so we would have $500k for the land and construction which is definitely doable if we can accomplish the 20% down task

2. There is land on the market anywhere between $25,000-$100,000 -- we most likely will need to have a septic system set up since there still is not a lot of options for community sewer in many parts here.

3. A builder told us it's possible to have a Quadplex built for $400,000, we are trying to have each unit be 3/2 with anywhere between 1300-1500 sqft

4. Each unit would rent for $1500 (maybe more depending on location)

5. We would have more money available if we did a 1031 but were told this is much more difficult with a new construction with the 6 month time to close timeframe.

I am looking for advice from anyone who has gone through this process as well as any recommendations on lender and financing options to try to accomplish this goal! Thank you for your help.