New construction but no experience where to start

[Keleisha Carter]

I'm pivoting into new construction in Tampa and most lenders need someone on the team who has found up construction experience. most builders I've spoke to don't want to leverage their experience and just come into as a the builder. How do I navigate that?

[Bruce Woodruff]

Quote from @Keleisha Carter:

I'm pivoting into new construction in Tampa and most lenders need someone on the team who has found up construction experience. most builders I've spoke to don't want to leverage their experience and just come into as a the builder. How do I navigate that?

 Keep asking. Offer more $$. Give the builder a % cut in addition to money. You'll have to take a serious cut in what you expected to make.

[Michael Haynes]

Hello Keleisha Carter in Tampa. Do you know the Margin that Builder's work for is 20%? Build out time is normal six months to a year. That's why lots of people with some Money do Flips. Do you watch all the Fix Up to Flip programs on TV and Youtube videos? I had a Real Estate Agent/Broker lady, who had been in the business for a few years and was on her third 3/2 new house near me. That was during Covid. She had just bought the corner house near me and did a Fix Up to Sell in three months and Sold at a Premium. Her thought was to find four to six lots next to build. Her husband was in Construction and she had a Team of six to do the work from start to finish. What do you have? Look before you Leap. Remember, "the Bigger They Are, the Faster They Fall" in the next downturn. 

[Jorge Vazquez]

Hey Keleisha, diving into new construction sounds exciting! If you're wondering where to start without much experience, here are a few ideas:

1. Hit the Books (and the Web): There’s a wealth of knowledge out there. You can find loads of articles, videos, and online courses that'll give you a solid foundation in construction basics.
2. Network and Find a Mentor: Try connecting with people who've been in the game for a while. Local industry groups or events are great places to start. You might even find a mentor who can guide you along the way.
3. Begin with a Bite-Sized Project: You don’t need to jump into a big project right off the bat. Try starting small to get a feel for things without too much pressure.
4. Classes and Workshops: Keep an eye out for construction-related workshops or classes in your area. They can be super helpful and a lot of them are aimed at beginners.
5. Volunteer Your Time: Organizations like Habitat for Humanity are awesome for getting hands-on experience. Plus, you’ll be helping out a good cause.
6. Consider Internships or Part-Time Work: How about a part-time gig or internship with a construction company? It’s a great way to learn the ropes and get a feel for the daily grind in construction.

Remember, everyone starts somewhere, and it’s totally okay to learn as you go. Wishing you the best on this new adventure!"

[Doug Smith]

I'm in Tampa and, in addition to financing homes, we've built our share of ground-up spec homes here in the Bay Area. You're right, experience is key when lenders look at financing a construction deal. It's way too risky for the lender not to have an experienced hand at the wheel. Your best bet is to partner with someone with a great deal of experience. Get a handful of deals under your belt and learn the ropes. Once you've got that experience, you can slowly transition to solo projects. 

[Henry Clark]

Are you talking about becoming the GC on new projects?  Or just investing in new construction?

I would look at what your strengths are and what you enjoy.  Only go down the new construction GC route if you plan to do a lot.  Not worth the learning curve.  Plus you will need to carry your own team or be in good with sub contractors which means you need volume.  Do you plan to scale up to 5 to 10 houses per year?  

[Keleisha Carter]

Quote from @Doug Smith:

I'm in Tampa and, in addition to financing homes, we've built our share of ground-up spec homes here in the Bay Area. You're right, experience is key when lenders look at financing a construction deal. It's way too risky for the lender not to have an experienced hand at the wheel. Your best bet is to partner with someone with a great deal of experience. Get a handful of deals under your belt and learn the ropes. Once you've got that experience, you can slowly transition to solo projects. 

 Thanks Doug, I would love to chat more to understand your terms when it comes on to lending on new construction projects

[Keleisha Carter]

Quote from @Henry Clark:

Are you talking about becoming the GC on new projects?  Or just investing in new construction?

I would look at what your strengths are and what you enjoy.  Only go down the new construction GC route if you plan to do a lot.  Not worth the learning curve.  Plus you will need to carry your own team or be in good with sub contractors which means you need volume.  Do you plan to scale up to 5 to 10 houses per year?  

 It would be investing in new construction

[Henry Clark]

If you're talking about investing in New Construction versus existing houses, and not GC'ing new construction then your lenders won't care about your construction background. I would see if there was a misunderstanding with the lender. Your existing REI background will be sufficient for any lender.

[Dustin Lauer]

Quote from @Keleisha Carter:

I'm pivoting into new construction in Tampa and most lenders need someone on the team who has found up construction experience. most builders I've spoke to don't want to leverage their experience and just come into as a the builder. How do I navigate that?

If talking to more builders does not work out to join you on transaction #1+ and you have enough capital and heavy rehab experience along with a GC / builder doing the project many lenders out there will offer you a lower leverage loan for your first project on your own.  60% finished value and 75% LTC is probably achievable without a builder in your company for the loan.  Hope that helps!

[Brandon White]

Hi Keleisha, I have ran into this problem often with many of my clients. I now have a solution for closing these deals without needing a more experienced partner. I am happy to discuss if you're still interested in funding new construction projects.