All Forum Posts by: Keith Bloemendaal

How I Secured My Funding

As most of you know, securing funding for a project as a newbie is difficult and daunting. I knew my credit, cash, and experience (new contractor on my own) wouldn't even be worth going to the bank with. Private money would be my route, and I knew that from the start. 

I had a friend that was on the inside of a group of people that invested in companies. I presented him my project and met with him several times. He pitched it to at least a dozen investors, but these people/groups were more in the VC type investments, they wanted a piece of my company, and more than half the profits on most cases. Needless to say, I walked away from every single one of them. 

All of this was going on before I lost my job, so I wasn't too upset, I still had a job, and because I still had a job, I wasn't overly worried. 

Then I lost my job..... panic mode.

I had begun talking with someone a close friend of mine introduced me to. This guy was interested in diversifying where he was putting his money so I sent him about 30 pages of market analysis, budgetary numbers, comps in the area (new construction), avg DOM, my plans, etc.. Everything I could possibly come up with and had gathered over the past several months, I sent. 

Then I waited... and waited....

Finally he calls me up and wants to meet (he was in Raleigh). Him and his wife were interested and wanted to come see the lots I was looking at and have a sit down. 

We looked at the property and some new homes going up in the area, then had lunch and they asked me a bunch of questions (experience, goals, etc..) Basically, my investor was interested, I just had to sell it to his wife. 

Well, I did. A couple of days later, he called and said lets figure out an agreement that works for all of us. 

Hybrid Funding

After several more meetings, my investor/partner (more on the partnership later) decided we would use a combination of cash (his) and construction lending from a bank. We started talking to some bankers I had built relationships with as the Project Manager at my previous job, none were working out and one even told my investor we were in a housing bubble again?!?!?!? 

I finally talked to a small banker I knew and had worked with, he agreed to meet and discuss. After going over all the numbers, my investors financials, etc... he approved us for 3 specs. 

So, basically my investor is putting up $400k and the bank is committing a little over $500k. Not bad for a newbie with no credit and no money huh? We plan on starting three, in phases, and starting a new one every time one goes under contract.

More on the partnership in the next post... Have a great weekend!

 Thanks Roy, I look at losing my job as a blessing now, who knows how long it may have taken me if I had solid paychecks coming in!

 Thanks, I'd be happy to show you my homes when you come down in the summer!

Interested to see your floorplans, I read through your other build and I love the contemporary designs you are following. 

Ok, I am brand new here and have spent the last 4hrs (at least) reading diaries and listening to the podcast episodes at the same time. I am so impressed with the complete openness in this community, it is truly amazing! 

I am located in Carolina Beach, NC (south of Wilmington, NC) and am just starting out on my own as a new home builder. I have been in construction for over 25yrs, and spent the last 3+ yrs as a project manager where I managed 150+ new homes and townhomes. A couple of months ago, my position as Project Manager was eliminated, and I was let go. I had already seen this was coming, I just thought I had until next year. 

This put me in panic mode, and I immediately started working on getting started. I had no plans designed, no funding, and no cash. Because I had foreseen my making this step eventually, I had pitched my ideas out to some friends with connections in the private investment realm. Nothing had come about by that at this point. 

As soon as I lost my job, I took a hard look at what little bit of cash I had and decided I could survive for a few months and decided to go full speed ahead at making this happen. I started my LLC, invested in a new design, researched competitive market analysis for where I wanted to live, etc...

I knew I wouldn't be able to get traditional financing, so continued courting private funding options. I finalized my plans and put the entire project out to bid. Armed with all this data, it made my project an easier sell. 

Long story (and helluva roller coaster ride), I partnered with an investor and we secured funding for my first three specs, including lots, last week. 

My plan is called "The Aruba", rendering and floorplans:

I have so much more to tell, but for now I will leave you with this:

Lot Cost: $91,500 (it's 5 blocks to ocean, yet out of flood zone, prime lots)

Construction Cost: $185,00 (just under $110/ft for build, I may be able to get that to $100/ft)

Sale Price: $359,900

I plan on closing on the lots in a few weeks, then starting 3 in a row (one every 30 days). 

Ultimately, I have a goal to buy and hold with my profits over my overhead/bills, actually I like to call it a build and hold. Areas I will likely do this will be off the beach, lots $30-$50k, build costs $80/ft, ultimately with no debt initially, so one per year starting in 2016. 

I look forward to learning from you all, and thanks to all of you for creating such a great community and sharing your stories!

What a great thread! I am looking forward to reading along with your progress. I am about to break ground on my first spec next month and was able to make it happen using none of my own money as well. 

Being on the coast, our lot prices are in the low $90's (I am buying 3 right now for $91,500), but the homes sell in the $190-$210 per sq ft range as well. 

Anyway, just wanted to chime in and say thanks for documenting this, it inspires me to do the same!

Hi all, 

Just discovered Bigger Pockets last week through Google Plus, have listened to a few podcasts, and discovered the forums today. 

Just an introduction, and I plan to detail more of what I am doing later:

I am a new home builder, just starting out on my own, in Carolina Beach North Carolina. I have been in construction for over 25yrs, and spent the last 3yrs as a project manager for a mid-sized builder. I managed over 150 projects (SFR) for them in 3yrs. In September, I found my self out of a job as they downsized (owners are ready to get out I believe, still on good terms with them) and I had to make a decision, fast.

I was already looking at going on my own to build, the market is decent here, but I just wasn't quite ready (procrastinating?). Anyway, I had enough money to make it a few months, and then I would be in trouble. 

Last week, I secured the funding for my first 3 spec homes ($900k) using none of my own money. This was a huge relief, and I am excited to get started in the coming weeks. 

My plan is to build 6-8 homes in 2015. 

In the future I want to build up a portfolio of rentals, either new builds (I build) or rehabs, I prefer new builds because I can save on the property since I build it. 

I look forward to networking with like minded pros, and learning from this community!

Thanks!