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Updated over 7 years ago,
Best bet to secure financing for a new build rentals?
I know it's been discussed at length, but I'm looking for more insight with regards to the business model that I'm considering. Here's the set up and the items that I think I have checked off:
1- I've made my living as a custom home builder for the last decade, so I'm confident that I can build townhouses/duplexes on infill lots. I already have my list of subs and suppliers that I've dealt with for years, so the construction piece is taken care of. Heck, that's the easy part.
2- I'm in central Indiana, so there's an abundance of affordable infill lots that I can get my hands on.
3- I have a few sets of building plans that I've put budgets together for, so I know what my build costs are versus what I can get in monthly rent. The margins are there and they actually look really good.
4- I have the property management piece covered as I've owned and managed several rentals in the past.
5- I have an LLC set up that is almost a decade old. I have accounts with my suppliers and access to small lines of credit with the local savings and loan.
All of this sounds good, right? Here's what I'm struggling with: The banks might let me do one or two of these , but that's not going to get me to where I want to be with this model. What's my best bet for securing the financing to a) do the builds and b) hold on to them long term?