I want to reach out to investors with experience with new construction. I have an opportunity to purchase an existing SFR for 400-425k on a property with a tentative map which will split the land into 3 lots, 2 land lots and the third with the existing 2/1 SFR. The SFR currently rents for 1350/month and tenants would remain (may increase rents to 1500 which is more at market rents). I would be purchasing the SFR, then would need to do necessary improvements (curb, sidewalk, gutter, road improvements and driveway between the new parcels to serve the 2 new land parcels. During the improvements we would freshen up the exterior of the existing SFR for curb appeal (paint and roof(needed)). Once the improvements are completed, we would begin new construction on the 2 parcels, which we have plans for already but need to be re-engineered a bit prior to beginning. My question to the community is, how is the best way to finance a project like this? I understand buying the SFR with conventional loan using my HELOC for the down payment, but once the property is split into 3 parcels, what happens then? Do I apply for a construction loan? Not sure what happens with the original loan in this case...Just trying to see if this deal could be a winner... New construction on the sq ft homes we plan to build are selling for 620-650k in the area. Additionally, we have another investor with 100k available but not sure how to incorporate that person as I am assumming all the risk by being the sole person on the note. Thanks for any advice or suggestions to help me analyze this better...
