Construction loan for new building on owned parcel?

[Bud Dwyer]

I currently own a four plex on a large parcel.  I want to build a 2nd four plex next to it.  Does anyone know the process to put this in to motion?  I guess my main question is, would this void my current 30yr Mortgage and turn it in to a commercial loan?

Other than that I already have a contractor in place who can build it, but I don't know if I need to get plans drawn up from an architect first, or how to start it.  If anyone has done a similar project before or knows what to do, and what potential pit falls to avoid it would be appreciated.

[Ellis San Jose]

I did something similar years ago & we had to get a whole new construction loan that paid off the existing loan balance on the building.  Once the construction was complete we could then get permanent financing.

If you are able to analyze the possibility of dividing the parcel into 2 lots.  You will still need to refinance the existing parcel & 4plex but it would be a permanent loan.  The new parcel would require a construction loan.

You will need to submit plans to the city so you would need an experienced architect to help you.