Creative acquisition of new property

[Daniel Siapin]

I've got my eyes on a nice property for sale, it's primed for new construction (grading, sitework & retaining walls done, plans approved).

As far as acquiring it, I've been searching a bunch on BP on this and haven't come up with anything, other than people like @Karen Margrave and @Albert Bui

I'm trying to figure out if I can lease the land from the owners, and give them title to a SFR I own (about equal value as the nice property). Once I complete construction and sell, then I pay off property owners + interest. How would I structure something like this?

Ironic: I just found out that the owners are friends of our family!

[Karen Margrave]

@Daniel Siapin I will private message you too, but post some ideas for others to see. 

You don't mention if you have the cash to build or will be getting a loan. A lease will muddy the waters, and complicate the deal so I wouldn't do that. Also, you didn't mention how much you were buying the land for, how much you have to put down, etc., or what experience if any you have. Would you be doing as owner/builder or ? What is the value upon completion? Having so much of the initial work already done has value, and makes for a much simpler project, so that's great.  

Any construction lender is going to want in 1st position with their loan. You might be able to get the sellers to subordinate to a construction loan thereby taking 2nd position behind the construction loan. Once the house is completed, and sold or refinanced they get paid off. The danger for the seller is that you spend all the construction money, and the house isn't finished, then they endup with liens, from subs.  Whoever does a construction loan will probably have a system in place for disbursing construction funds to help with that issue, there's a few ways that is done. 

Another safety measure would be cross collateralizing the loan with your other property. 

Talk to @Antonio Gonzales for more information. He's the lender we're using on our condo project in San Clemente.