New Construction BRRRR

[Christian Sobiech]

Hello BP community,

I'm a long time reader and listener of the BP forums and podcast. I'm at the tail end of my new construction duplex project and considering financing options right now. The background to this project is lengthly, but i'll give the short version. I acquired a building lot back in 2018, the lot had a home on it previously before it had a fire and was reduced to just a foundation. I went through a zoning board variance process in 2020 to receive approval to build a two family home on the property. After receiving the approval in late 2020, I began navigating through various construction options. In 2021, I choose the modular route instead of stick building. Now I am almost to the finish line with the house being set, just the finish work remains for the two units. I choose to do this project without any initial construction loan or outside financing, which makes it very similar to a traditional BRRRR. I'm currently looking at cash out financing options. This property is in an LLC. I've talked to a couple local banks that offer balloon loans. Ex: 10 year balloon, 10 year fixed at 5.25%, 25/75 LTV. I'm familiar with ARM loans, but not balloons. I've read on some BP posts that people had success negotiating a guaranteed loan renewal at the end of the balloon. What are people refinancing with? I'm a relatively new investor with a focus on buy and hold rental properties. I have 1 commercial loan at the moment for a different investment. Greatly appreciate any advice!