All Forum Posts by: Miranda Holland

2.5 million is a lot to start with for a new construction job when it comes to most lenders in the private lending industry. 

The way it works is that most lenders want you to have experience doing renovations before they lend you money for new construction. But they prefer for that 1st new construction job to be a single family in which costs are in the low six figures to build.

To start with 2.5 million, you'll have less lenders willing to take this on, not only would you have to come with that huge down payment, you'll have to show you have enough to cover the loan if the project fails. 

It varies from lender to lender but I always tell investors to expect 10% for closing costs 

I'm pretty sure there is. The quickest way to find them might be to work with a licensed mortgage broker. They have a list of conventional lenders to match you with the right one 

Not really. Brokers can be labeled private lenders because they work closely with with lenders. 

In your situation, I'm more concerned that they could be a complete fraud altogether. 

A good private money broker can put investors at an advantage when it comes to shopping for loans. But the private loan business is vulnerable to fraud for borrowers since sensitive information can be exchanged 

A lot of " lenders" are not actually lenders. They're  private money brokers such as myself but they don't disclose that information. 

I'm not saying that's the case with your situation. I think you should go with your gut feeling. 

Different lending companies have different lending criteria. In the private lending industry, plenty of lenders will lend to you as long as the deal makes sense, you have a decent credit score and you have a down payment to bring to the table. 

And private lending companies are designed to allow you to have multiple deals going at once. Some lenders might put a limit on how many projects new investors can be funded at once. But let's say your lender won't fund your next project because you already have 3 of them going at the same time, you can wait until one is completed or go to another lender. 

I recommend you get a broker to help you out especially in the beginning. 

You can always find a private lending company that will work with you.  Whether or not you will be pre-approved for a conventional loan is based on how the lending institution's guidelines matches your situation. Private lending companies are not big on pre-approvals. If your deal makes sense and the property is valued at at least 75k, you should be able to find a lender with 25% down

I can't say what your lender would do, but private lending companies would approve new investors for at least 3 loans at a time. And  if you reach your limit with one company, you can always work with another. 

If you're an experienced investor, there's no limit. You can do as many projects as you can handle 

Private lending companies may be an option. Their approvals are primarily based on whether or not the deal makes sense.