All Forum Posts by: Chase Brumfield

It's a good question.  We actually looked into mobile homes originally.  I don't remember the exact figure, but what surprised us was how similar their cost came to the stick built home we chose.  The vast majority of the cost was in the installation.

It's a good thought though - I'm pretty sure our current lender doesn't cover mobile homes unfortunately.  I think the problem is... no matter what we do... we're going to need to find some cash.  Here's some scenarios.

1. Put the land on the market.  We purchased for 120K and owe 137K (current construction draws).  We gave the builder a 25K deposit - but they've only gone out there one day and didn't break ground.  The contract also doesn't say the deposit is "non-refundable", so we think there's a chance we get that (or some portion of it back).  We're not sure what we could sell the land for in the next 7 months.  Probably best case - what we payed for it.  If you take away 6% assumed agent fees, then we'd need ~25K cash to make up the difference to pay off the loan after the sale... which could hopefully be covered by the builder deposit.  Then again, we did get a septic permit - so maybe that's worth something over what we payed for it.

2. Find a lender willing to put the 137K on their books (or some portion). This seems pretty unconventional. Most lenders I can find for raw land want a 75% LTV at least (not to mention a promise to build). If I assume the land appraises for what we payed for it (120K), they would be willing to lend 90K. We'd then have to find 47K cash to make up the difference. We MIGHT be able to find that if we get a home equity loan on our Texas rental property - but it would all depend what it appraises for... my guess is we would be a little short but could hopefully combine it with the builder refund.

3. Consider a mobile home - or some type of living situation that doesn't require such significant foundation work.  I honestly have no idea what the likelihood of this would be and it would require a restructuring of our loan to someone else anyway I think (which would require some amount of down payment - likely being another big cash hit)?  Looking at new underwriting fees etc.  This MIGHT put us back in budget - but I'm not convinced it doesn't also carry significant risk at this point.

As a side note, because of how much cash any of these solutions appears like it will take us, we're wondering if there are personal lenders or hard money lenders that do these deals.  We'd be willing to pay some above market interest rate on our 137K loan right now to avoid the cash hit and keep the property.  Alternatively, we'd be willing to secure the loan (or some portion of it) with our rental property in Texas.  

We have great credit and solid income.  We do have some cash investments (stock/crypto/etc) but I really don't want to tap into those before EOY 2025.  We think, before RVs, we could turn it into a simple tent spot for almost no capitol and cover at least a portion of any payments (although our current income wouldn't require this).  We'd like to keep the property and re-approach the project down the road - it's in a great spot near the blue ridge in a growing area.  We simply need to find a lender willing to transfer the debt is our current thinking?

All ideas welcome!

We moved forward with a construction to primary mortgage loan after doing necessary diligence.  Unfortunately, we've hit a snag with the property (thankfully very early in the project).  TLDR - we won't buy a property without doing a soil test again.  We figured the septic permit from the county would be sufficient - but turns out our foundation quote/budget was way too low due to soft soil.

We're trying to figure out if we can get the land under another type of financial instrument and continue with the RV plans without putting a home on the property.  I'm looking at home equity loans for another rental property we own currently.

More than likely, we'll have to put the property back on the market and find some cash to cover the difference between current construction draws and sale price.

It's an expensive mistake - but we'll be back again to fight another day.  And who knows, maybe we'll be able to find a creative lender that would be willing to back our loan.  If you know anyone let us know!  We have about 7 months until the the rate lock payments start to kick in and the project is supposed to be complete.  So things don't get really hairy until then.

Dustin,

Thanks a lot for the response.

A few things worth noting. We own a rental home in Texas where we might have ~$50K to $75K in equity. But everything I've read says you can't actually get a HELOC on a rental property in Texas.

We're also not really interested in refinancing the Texas home - as we've got a 2.5% rate on it and any refinance at current rents would turn it into a cash-flow negative asset.

Anyway - we think if we moved some other investments around we might be able to find the $137K to pay off the loan outright - owning the land.  However, I'd then still want to be able to get the cash back out of the property - so I'd be looking for some type of secured loan, backed by the raw land I guess?

The other option is to find a lender that would take this deal up front I think?  So instead of us finding the $137K - finding a lender who is effectively willing to pay it and transfer that debt to them - with us obviously now making payments to them?  Does this type of thing exist?  There's a lot of value (even if a higher interest rate) to us finding a simple deal like this...

We have great credit and solid income - I would think, for the right rate, there would be lenders out there jumping at the chance for these guaranteed returns - we'd even consider putting up the equity of the Texas home (and obviously the land itself) to secure some portion/all of the loan?

I hear a lot about standard personal loans, mortgages, etc - but do banks or smaller players consider situations like the above?

Just wanted to loop back here and say thank you for the response.  Not sure how I missed it originally - but it has rang true so far in our experience.  We are learning a lot over here.

Hi folks,

My wife and I have a construction to permanent mortgage loan on land+home where we intended to build.

Unfortunately, we found out that unexpected foundation work due to soft soil would likely make the project use triple our contingency reserve before even breaking ground.

We are exploring our options on how to transfer our current financial obligations for this construction loan to some other loan offering (as moving forward with the project is now too financially risky). We requested a payoff statement today and should be receiving it in the mail within the next week (just to understand the details). 

We are expecting it to be ~$137K.  Has anyone been through this before?  What are possible options to transfer out of this construction loan?  We spoke to the lender but they weren't much help beyond saying "you've got to find a way to pay the 137K".

All thoughts much appreciated.

My wife and I are interested in leveraging a 2-10 acre single family property into a longer term RV park with 8-15 pads.

We've been in communication with the county.  Long story short, they recommend a process that basically looks like...

Soil scientist --> (septic engineer IF needed) --> site plan --> county approval...

We've spoken to a few soil scientists and they all quote 2k-5k to analyze the property for an appropriately sized septic system.  However, there's obviously no guarantee in what they'll find... so - how do folks mitigate the risk of the 2k-5k loss when looking to purchase a new property for a plan like this?

Also - is it appropriate to add a contingency related to this in an offer - specifically something like "earnest money will be returned if property soil is not found suitable to support 15 RV pads" sort of thing?  Or is this basically a guaranteed way to not get an offer accepted?

All advice and opinions welcome!!!