'Build To Rent' Spec Model - Buyer Funds Construction

[Katie Anderson]

Thank you in advance for any guidance or direction here!

For simplification purposes, my husband and I are new construction spec builders. Our original marketing model was "build to rent" selling to investors. We have found that we are able to get a higher sale price for our homes listing on MLS to primary home owners, however, we still have a waitlist of investors wanting to purchase our homes (albeit at a slightly lower price point than the MLS sale so it cash flows).

We own the land. We are the general contractors. We need more cash to build quicker.

I have been playing with the numbers and if we can cut out financing fees, relator commission, construction loan closing costs, etc... we can lower our sale price and the homes will easily cash flow.

QUESTION -- If we have an investor with enough cash to fund the construction (with no interest), how can we structure our contracts to avoid unnecessary title / closing fees until after construction is complete and the investor gets his own mortgage on the property.

We have purchased these lots this year, we have title insurance on the land. The investors we have in mind are close friends and there is mutual trust, but I'm trying to figure out the appropriate legal way to do this to protect both parties. Basically we have procured the land, will provide all pre-construction design and engineering and manage construction; but we wanting to "pre-sell" the property to the end investor at the beginning of the process without either party incurring closing cost fees until the project is completed.

I hope this make sense. Thanks again!

Katie