New GC Starting Real Estate Investing, (Financing Question)

[Blake Nash]

Hey Everyone, 

I am looking for the best financing options for my plan, but if there are any better plans someone might have a suggestion for, I would love to hear them as well.

Your goals and story: I am a newly licensed General Contractor in Northwest Arkansas looking to start real estate investing. I would like to build rentals to have a monthly cashflow. I have built 4 spec homes over the last 4 years with my Dad, learning the ropes from him as he is a GC with many years of experience.

Type of property: I would like to build a 1600 sq ft Single Family Home for my wife and I to live in as well as build as many single family home rentals that I can. )

Location of property: Our house would be in Bella Vista, AR, but I am considering 2 options for location of rentals; Bella Vista, AR or VInita, OK. In Vinita, OK my mom and step dad own rentals there that do well. The cost of land and labor there are cheaper than in Northwest Arkansas. There are also houses that have potential to be flipped in both locations

Purpose of financing: Construction of our own home, Construction of rentals, purchase of our own homes and purchase of rentals

Type of financing sought: More than likely Construction loans for home and rentals, Conventional Loan for purchases, but I am open to suggestions of anything that might work better

Current or prior ownership of real estate: I have not owned any real estate, only built and sold

Occupancy: investment with traditional long term leases

Value of property at present and/or your offer price: Our home we build estimated appraisal $225,900, estimated appraisal of rental in Bella Vista, AR: $170k-175k, Estimated appraisal value in Vinita, OK: $145k-150k

Anticipated or actual appraisal issues: no

Fair market rents per month: Bella Vista, AR: $1200-1500 , VInita, OK: $700-$1200

Down payment or equity: Anything I build, I project to have 18%-20% equity at completion of construction

Source of down payment funds, if applicable: Possibly HELOC after we complete construction of our house

Income Source: Salaried in Data Cabling Industry, 2 years

Gross monthly income (optional): $7,000

Monthly debt obligations appearing on credit report, plus (if applicable) personal rent and alimony/child support/etc: $700 debt, $850 rent

FICO:  Good-Excellent

Credit issues: N/A

Questions: If I go to a bank to get a construction loan to build my own house to live in, would I still have the borrowing capacity to get another construction loan to build, at minimum, one small rental to purchase with intent to rent out?

If the buy in for a Vinita, OK rental is cheaper than the buy in for Bella Vista, AR buy in, would this give me a better opportunity to get started?