I'd like to demolish two Single Family Residences that I own. In place, I would like to construct a **2 - 3 unit CONDO** at each site. The property is zoned for such a project and similiar ventures are taking place throughout this beach resort neighborhood. I have about $150,000 equity between both properties. My father is a retired General Contractor, with Class A license, and is willing to supervise these projects. I do not know where to begin looking for financing. What type of financing should I be shopping for?
(i've just revised my previous post which was DUPLEX...my question now is in reference to CONDO...thanks)

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Dtaylor:

My construction lending experience is limited to larger projects involving experienced developers. The requirements for this kind of financing are much more strict. However, I think that getting financing for a duplex construction would still fall within residential construction and that you should be able to get some banks to consider it.

Contacting other lenders should be the best way to go. Unfortunately, I have a policy not to refer people to a specific lender other than telling them to try the ones located close to the property.

Good luck

I'd like to demolish two Single Family Residences that I own. In place, I would like to construct a **2 - 3 unit CONDO** at each site. The property is zoned for such a project and similiar ventures are taking place throughout this beach resort neighborhood. I have about $150,000 equity between both properties. My father is a retired General Contractor, with Class A license, and is willing to supervise these projects. I do not know where to begin looking for financing. What type of financing should I be shopping for?

Taken as a whole this is a construction commercial real estate loan. If your dad still has the license, he would have to be involved with the project, and there might be a bank out there that would take a look at it. However, take into consideration that your ” $150,000 equity between both properties” might be overstated as you are really looking only at land value here.

A couple of things come to play.

1- Loan to value
2- Loan to cost
3- Comfort level of the lender in your ability to pull this off.


Good luck.

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Thanks for your understanding.

This post has been edited by loanuniverse: Aug 27 2004, 12:21 PM

This is something to do some research on. The lenders would have a concern if you are wanting to borrow money first on the exsisting home/s and then demo it. There goes are collateral. This one could be tricky. If you demo the current property there goes your equity as well. Also if you do a construction you will have an existing lien that will need to be paid off and so I would think you wouldn't enough to build your neww project. I am curious now to know how this would work...any ideas? I have never came across this in residential mortgages.