All Forum Posts by: Sean Ryan

Hey All,

Currently building a single family residence as an owner-builder that will eventually be used as STR when complete. So we've got a few different important details with the different phases of the building.

I have a State Farm policy with course of construction coverage that covers on almost all perils. However, I've been looking around for some additional "earth movement" or landslide coverage, just to add some piece of mind since the home is built on a hillside. Curious if anyone has experience adding this coverage on top of another policy and could point me in the right direction. Ideally this coverage would cover the construction phase and extend to the STR rental. Located in Idaho.

Appreciate it --

Thanks Chris -- will definitely start talking to specific lenders. Is there a reason a bank wouldn't refinance new construction like this?

Hey All -- I believe I have an understanding of the financial workflow here, but figured this group would have lots of personal experience and or advice. Thanks for your help--

Background -- About to start construction on a single home residential property as an owner builder (and yes I know how many in this group already feel about that). The land is owned and paid off, budgets are dialed, bids are in, etc. We'll be paying for the first half of the build via a HELOC on our primary residence. When they money is gone, we have a hard money lender that works exclusively with owner builders lined up to fund the remainder of the project.

All this seems straightforward, with the understanding that this money will incur higher interest rates and will need to be paid off as soon as possible. Am I correct in my understanding that after the house is built and a CO is issued, we can work with a traditional bank/lender to get the new home appraised and take out a traditional mortgage on the home for XX amount (the amount owed to HELOC and hard money lender)?

If it is that simple, do we receive cash from the the mortgage holder/bank and then just pay off the first two parties via cash? How exactly does that work? There are no penalty fees for paying off the loans early, FYI.

Anything in this workflow that I'm missing? Am I completely off here? Thanks--