All Forum Posts by: James Petty

Hey team,

Anyone have recommendations for a Bond company? I see some random results of companies I've never heard of come up with Google but curious if you've ever done business with one you can recommend. 

The City is requiring that I obtain a Performance Bond for Work in the Street in order to complete a property Subdivision (splitting a lot into two so that I can build a home on the newly created lot). Has anyone used a Steet Opening Bond before? 

Hey Jordan,  were you able to find good (and bad) contractors in Beacon? I'm looking for recommendations. 

Hi @David Edwards,

you should see about trying to meet up with Cady and John over at WC Studio in Tacoma, WA. They are an Architect & Developer studio and are doing some nice work. I'm sure you could learn a lot if you have an opportunity to pick their brains. 

www.wc-studio.com 

@Victor So 

I am currently talking with First Republic which seems like a good deal at less than 4% fixed rate. From what I understand they typically only work with people in the upper-wage spectrum which you should qualify for. I think they only work wth people that are near to one of their bank locations though, which may restrict you. Maybe they're opening up in Chicago soon? Worth investigating. 

Thanks @Rogers Smith ! 

It sounds as though if you knew that the bank was giving you 80% financing, that you have an incentive as the builder to build (using numbers from your example) a $400,000 home for $320,000 or less. Is this something you typically try to do? 

How much will having student loans affect my ability to get a loan for building / heavily renovating a property?

I have been scouring the forums with the topic of student loans and continuously see the same messages:

• 6 Tips For Buying Your First Property When You Have Student Debt
•  Newbie with Student Loan Debt: FHA, 203K, Conventional or SBA?
• Pay Student Loan Debt or Invest
• Pay off student loan or purchase real estate

Essentially in each of these texts, the advice is to get your Debt to Income Ratio (DTI) down by getting your debts under control. In terms of low interest student debt, everyone tends to recommend investing in assets that can outperform these debt interest rates. That all makes sense. Now lets talk about logistics.

I have a large balance of student debt, and I am currently in the process of refinancing this into a private fixed interest rate of 3.95%. My intention is to build duplexes or quads in late 2018/early 2019. Between now and then, I will be stashing large sums of cash to be used as equity for that endeavor. 

From a banker's perspective, what is better? More cash on hand, or lower debt balance? Should I be sending more money to the student debt rather than raising capital? 

Regarding the debt itself, would this debt look more favorable as formal "student debt" by the government, or does it matter? By refinancing, I am turning this into effectively a signature loan. I am concerned that this may look worse to a banker down the road than "oh he went to college/grad school, how nice."

Many thanks for any advice!!

@Nathan Hemming, 

Yeah I have heard plenty regarding Segal and his Jonny Bucks. I'm curious to meet someone who has made that fatigued statement a reality. Thus far, I've only heard about the tactic of using CDs or deferred fees as debt collateral from people who are quoting Segal, but without personal experience. If you find someone, please let me know. I would love to hear about someone's personal experience. 

@Rogers Smith, thanks! This is pretty useful information. 

Hey BP. I'm in the process of educating myself on building houses/townhouses to sell and trying to find good examples of Pro Formas for construction loans and general home builders. Most of what I am finding is more of a hold strategy with passive income. Are there good resources out there for people home builders when putting the initial numbers together? I want to make sure I'm not missing anything. 

Hi Nathan, 

I'm curious what information you have found regarding your statement: "I've also read the potential of banks to allow for deferred architect/developer fees to count towards the down payment, but that seems to vary by location and I don't want to depend on that."

I am also an architect and looking into information on self-initiating projects.