New construction loan for duplexes.

[Sal Zafar]

Hello BP - I have an opportunity where I can build 3 to 4 two stories duplexes in Austin land area. And may be 4 to 5 more in future (1 to 2 years). However, I need to find out couple of things; 

1) Loan==> process of loan for new construction? 

2)   Builder ==> where/how to find reputed and trust worthy "new" construction builder? 

Thanks
Sal 

[Jennifer Beadles]

I can't speak for Austin specifically but I imagine construction loans are handled similar to how they are in Washington state.

For the construction loan the bank will need building plans and a budget. They'll order an appraisal based on those plans. They usually give you a loan for 75% of the total budget including the land. So most often you pay cash flow the land and the bank will finance the construction. If done right, you can refinance at the end and recoup your 25% down.

Smaller local banks are the best to work with.

For builders you'll want to ask around, or you can check the building permit records and see who is building other multi family projects around town.

Hope this helps, sounds like a great project.