Before we go into any project we price the existing comparable set of new construction projects delivered in a trailing 12 months compared to the market or zip code averages as well.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $465,000

Cash invested: $80,000

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Now, I help the same type of clients get financing (both construction and long term) for their projects.

They will give you a normal mortgage + construction funds for your project.

Its a good thing they profited, because projects can go south sometimes and then that really hurts.  

I recommend modeling your family budget for a year and conservstively project project your income, investment growth and expenses conservatively out to at least 80 years old.

How big is the project?

While I am a lender, I personally use hard money on all of my own investment projects.

This is where I would start if I were you—perhaps leveraging one of your existing properties.As a last resort, you could look for a partner willing to fund the project in exchange for a share of the equity.

The fees and overall costs of these loans needs to be a key factor including what if the project goes over time . . . . you can be underwater in no time.Underestimating repair costs and overestimating ARVs based on Zestimates are the next stumbling block.There's money to be made but make sure numbers all work WITH contingencies defined and overages expected . . . remember, a project will always cost more and take longer than initially thought!