I am a newbie real estate investor and was wondering if anyone has heard of Hard money lenders in Florida who would do a 0% loan on plot of land that has building permits ready for three townhomes?
I have done my due diligence on the deal and have even run the deal by a few real estate analysts to make sure the numbers and Comps are correct, but couldn't find any reliable 0% down hard money lenders for new builds.
@Joseph Feldman unlikely unless you have significant personal assets or a great track record. Best look for a partner with capital and/or a track record.
@Joseph Feldman unlikely unless you have significant personal assets or a great track record. Best look for a partner with capital and/or a track record.
If you're a newbie investor, nobody is going to give you a 0% down loan. Especially for a new construction project where chances of a newbie failing are higher than usual.
Any private, bank, or alternative lender will want you to have some skin in the deal. Think about it this way. If you are trying to have someone invest in your company, but you yourself had no money invested in the company, do you think others would trust in the success of your company?
To add, it's going to be very difficult as a newbie to get 0% down. The one thing I can recommend is asking family/friends. A lot of investors start off this way. Find someone who has experience investing in real estate who has completed a similar project that you are looking to do.
0% chance you will find 0% down for new construction. It's hard enough to get 0% down on a flip with a terrific LTV and a great track record of success.
@Ryan Herting Thanks for the helpful advice. I went down the family and friends route and got a family member that committed to Lend me the cash to buy the land. Now I need to find a lender for the construction.
@Ryan Herting Thanks for the helpful advice. I went down the family and friends route and got a family member that committed to Lend me the cash to buy the land. Now I need to find a lender for the construction.
It will be in your better interest to partner with a GC on the deal now that the land is covered. GC should be experienced with some recent projects under his/her belt.
Buying the land first then trying to finance the construction is a common mistake. At a minimum, try to get some assurance that you can even get the construction loan, before committing to this endeavor. For investment properties, this is becoming more challenging. I know several investors that have gotten burned attempting to do this. They take on a bunch of risks and when asked, they aren't even aware of the potential upside compared to buying a pre-construction.
I agree with @Paul Sofia. If you feel compelled to build, then partner with the builder and share the risk while leveraging their experience/credit. If you want to go at it alone then just buy a new construction investment property that is being built by a spec builder. This is what I recommend to all of my clients in Florida. Just use the money that would have gone to the land as a down payment and all you need is an end-loan. No need to buy land or take a construction loan.
Please advise if I can provide further assistance.