Any Guidance On Construction Loans In LA County
Hey BP,
I'm a first time buyer looking to secure some land in LA County. Obviously land and new construction, specifically FHA construction, is not popular these days so it seems to be extremely difficult to locate anyone with sufficient expertise or specialization in this area. If anyone has any leads or contacts on lenders that specialize in land loans or FHA construction loans that would be great! Thanks so much BP family.
Kai
Hi Kai,
I am a realtor and I do have two lender contacts that I can connect you with creative loan programs for land loans and new construction.
Hey Kai, what city is this in? Have to warn you that construction in LA country is HARD. I did it, and probably increase the value of my holding 2.5x, or even 3x, but it was a long 7 year process and at times very touch and go. You're right, it's not popular, and there is a good reason for that. There were times when my projects were on the verge of failure and I was at risk of losing everything. Huge reward, huge risk. Really huge risk.
With that said, regional banks in the area would be best. They are all different, mostly based on the kind of new construction that you're doing (residential, commercial, and some even more specific than that). You may have to go creative rather than conventional, but depending on where it is and what you are doing, you may be looking at anywhere between 100K-300K in soft costs (permitting, design, architecture, utility hook ups, etc.) and a construction budget of probably 1 Mil to whatever, once again depending on what you are doing and where. But even with the smallest of projects, never heard of any new construction going less than 1 mil.
Keep in mind that you are actually going for 2 loan products with new construction, not 1. The construction loan is only for the actual construction, and you will want to refinance that into a new loan with a longer amoritization, unless you have a couple Mil lying around. And here's the dirty secret than lenders will not tell you: the lender who you get the construction loan from DOES NOT have to be the lender you convert with.
