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Best way to finance a teardown

I'm tearing down my old second home in a good ZIP code (10605) and I have a great HELOC (2.75%) on my primary residence but it's not enough to completely finance the new infill home. I assume banks won't finance the new infill home based on that property value.Any suggestions?
  • December 10 2011 - White Plains
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Answers (7)


Be sure to check to make sure the house isn't regarded as historical.  This can create major issues.  If it's not considered historical, I agree with Dan...ask the fire department if they would like to do a training on the house.  This can lower your cost of removal in some cases (check with your demo company first though).
  • June 05 2012
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If you're keeping the foundation but replacing the rest of the home, you "may" be able to do a 203k loan but many lenders will prohibit what you're trying to do since it's so close to a true construction loan at that point.  Without more information, it's hard to say what you can or can't "technically" do.
  • June 05 2012
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Naughty teardown man....promotion made the tassel fall off my new hat <:( You might want to consider other ways to promote your business on Zillow instead.
  • June 04 2012
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Many of the construction-to-permanent loans have left the market - try  [Commercial hotlink removed by Zillow moderator. Please see our Good Neighbor Policy for more information on posting in Advice.]

Thanks,
  • June 04 2012
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The easiest way would be with your cash.

The second best way may be a construction loan that includes the cost of tearing down the old house.
 
A third way to consider would be, a loan that would allow you to significantly renovate the existing house.

Why is it a tear down? Is it free and clear? What is the land worth? How much would the house you're replacing the old house with, cost? What would the new house appraise for?

This idea represents one of the riskiest activities, in Residential Real Estate, that a Lender is ever asked to loan money towards. It will not be easy to find. You'll have to contribute significantly.

If the land is valuable enough, and it must be to support the notion of a tear-down/rebuild, you may be able to do it without any cash out of pocket, but you're going to have to be strong financially, and you're going to have to find the right bank, that is not as risk averse, as most of the Banks are now. I'd suggest a Regional Bank, that portfolios loans, in the area.
  • December 11 2011
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If you want a cheap teardown contact your fire department. You may find they will burn it for free for practice.There could still be some costs involved but it is about the cheapest house removal possible.
  • December 10 2011
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Matches.

Seriously, tear down should be part of a construction loan.  See your favorite lender.
  • December 10 2011
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