Construction loan process and build questions

[Alexandria Goldinak]

Hey All,

Hypothetically speaking, if I found a commercial space that is zoned for mixed use and I wanted to add an addition to make apartments on a second floor what type of loan would I need, new construction or something else?

A few more questions -

1. What is the process do I need to go to the town first and get plans approved then the lender to approve the plans?

2 does the builder hold the construction loan or would I?

3. Any other information About the process and how the loans work is welcomed as well.

Thank you!!!

[Chris Seveney]

@Alexandria Goldinak

1. First you need to confirm with zoning that what you are intending to do can be done as there are setback requirements for lot lines.

2. Once confirmed you could do the addition you would engage an architect and civil engineer to develop plans.

3. Plans are submitted to county for approvals

4. You can discuss financing prior to approvals but no lender will provide financing until plans are approved

5. You can also have some GC’s pricing the work while getting approval and then once approved have them finalize the bids when architect does 100% construction set

6. You get the loan not the GC.

My recommendation is if this is completely all new to you that you hire a construction manager to manage this entire process for you. Otherwise it will take you 3x longer than normal and cost you 2x more than it should