Options, Options, Options!

[Andres Rivero]

So I purchased a dilapidated house in an up and coming neighborhood right on the Atlanta Beltline. I purchased it in the low teens. The house is a tear down, but the location is great. Now I figured option 1: demolish the house and sell the land. Option 2: demolish the house and build a new craftsman style home to match the area. Problem I run into is financing the new construction. I have been told I could build a new house for 170k and according to a realtor that is savvy with the area, I can sell it for $250k quickly. Possibly more if I wait. The house is currently the only one on the block that is in bad shape. The neighbors will love me for tearing it down. And that's good for business. What other options do I have? Can anybody shed some light on how to get financing on an investment property for new construction?

[Michaela G.]

Draw up your new construction as a major addition, get the funding for the renovation and then later tear down the front (original house) down.