Financing Advice on New STR Construction Build

[Cameron Wells]

My father has roughly 14 acres of land about 15 min west of Asheville. He has given me permission to build an investment property on this land which I feel very fortunate for this potential opportunity. I am leaning towards building a smaller 800-1,000 sqft modern cabin as a STR and for personal use throughout the year. We initially met with a couple builders my father has worked with previously and are currently awaiting for detailed breakdown of cost estimates.

What would be recommended for taking out a loan for this build? A construction loan? I own an investment property in Charlotte which is paid off, would a HELOC be an option to fund this build? Any lenders for a situation like this you would recommend I reach out to?

Obviously this is new territory for me so thank you in advance for any advice.

CW

[Cameron Wells]

Quote from @Connor Ryan:

Hi Cameron, based off what you’ve explained I believe you could go several routes but a heloc would be great considering you have the equity in a rental already. Depending on your time period for construction, a heloc could be a great option as it provides flexibility and then you can always reuse later down the road. If you were to do a cash out refinance after the property is completed and take out that equity, you could pay off the heloc and lock in a lower long term rate on the home.

Connor,
Thanks I appreciate the insight. I will look into this more.