All Forum Posts by: Erik E.

Reggie and Robert, 

Sorry, we do not work with wholesalers and only a select few agents that have been in this market their entire life. The company I partner with has been in business for 40 years and we work directly with the landowners throughout the entire state.

 Every week in Columbus OH I make contacts with agents who sell land to investors, residential owners, etc. It starts with what services they offer and charge for. If you are talking about reverse engineering a development and build site you need an all around agent not a builder. Builders look at architectural plans unless they are design build. Design build has an architect. You need architect or a potential site tied up before anyone will really give you any time of day. I'll shoot you a PM about development and construction I'm tied in with new construction in central ohio up to like 60 miles outside of columbus. 

I see FL, OH, and MI in your bio line. Where is this property? If it's in FL, perhaps we should talk. PM me. 

In short, the builder already owns the land, they are funding the construction costs and usually are selling the property already well under construction: 2-3 months away from completion. This is the avenue that the majority of our investors go with as it's a much shorter time frame and removes a-lot of the risk and work associated with ground up construction. @Erik E.

Hi @Erik E., I'm a long-time, Tampa-based lender that, among other things, is known for financing ground-up investor spec construction like you're doing. There are a few things that I can point out that hopefully will not discourage you, but I hope will help. Lenders do, indeed, look at the experience of the builder, but they also look closely at the new construction experience of the operator/developer (that would be you). We can usually get a deal pushed through if we've done several really heavy rehab deals with the operator, but getting a newer investor financed for new construction is sometimes tougher. We'll usually go 80% of the cost of the lot, plus construction costs, plus soft costs up to 70% of the as-completed value. That's going to be a far cry from 100%. Rates right now, in this 22-year-high interest rate environment will usually be around 12% with 3 points. That is what most legit non-bank lenders are going to be charging (banks hate this type of deal). My advice would be to get a partner with a track record with construction deals for the first three or four to learn the ropes. I'm not trying to discourage you, but a new build out of the gate is really ambitious and a lot can go wrong (thus the requirement for experience). I'm in Tampa as well if you want to grab coffee some time and I can answer questions for you. I would love to see you successful. 

Hey Eric congrats on the start of your real estate journey, I work with a lot of investors who are either looking to do ground up construction or purchase spec homes directly form the builder. When doing ground up construction we recommend investors get pre approved for the construction property before buying the lot. too many buy the lot first without knowing if they get approved for the construction loan or know their total financing and closing costs. This is beneficial to know ahead of taking on a project like this as it can easily be tens of thousands of dollars in unrealized costs. Most lenders will factor in 3 major components before approving the construction loan. that includes the builder, the project, and the investor. So we recommend working with the builder and their preferred lender as they have already previously worked together ( approved them and previous projects before). Once you receive approval for the pre construction loan, you can then look for lots now knowing all of your costs and that you will eventually be approved. The best rates are usually given to investors that have built 5 properties in the last 2 years. If you do not meet this threshold you are more luckily to get a hard money loan at much higher rates. When our investors look at spec or ground up , most go with spec build because it can cash flow right away and avoid build time, hidden costs ,and headaches. Those that go ground up are generally looking to build at least 5 per year. Let me know if you have additional questions.