BEST Way To Finance Building Multiple Homes (Commercial Loan vs Individual Loans)

[Timothy Ocampo]

Hey Guys!

In a bit of analysis paralysis I believe, my family and I own 13 lots down in Jacksonville, NC. I just built a house last year and have it rented out for long term use and we are looking to likely develop the rest of the lots sooner than later. The home that I built was financed using HELOC's which is fully paid off and cash flowing $1550 a month.

I am a realtor but have no real experience in the commercial development side so I'm not sure if there is upside to trying to build maybe 3 or 4 homes using a commercial loan or would it make more sense to do construction to perm individually? Or maybe even trying to build off lines of credit whether that be business or HELOCS. I know the concept of pulling the equity as well eventually but I've been told I have to wait 6-12 months to do a cash out refinance based on ARV otherwise it would be based off the cost to build ($200k). We also could likely use the land as part of the downpayment for either scenario but I'm not entirely sure how that factors in either.

House: 3 bed 2 bath 1540 sqft 2-car garage

Cost to build is roughly $200k

ARV: $265k

Monthly Rental income: $1550

Each lot is worth:  $20k (Owned free and clear)

Build time: 6-7 months

So roughly looking to build 4 houses: $800k with a total ARV of $1,060,000, downpayment of $160k, and cash flowing $6,200 a month. The part of unsure about is how to run the construction numbers.

If there's anyone that could help give me some advice/talk things through I would be extremely grateful. If there's any other numbers that I need to provide to get better advice please just let me know and I can provide as much as I can!