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Profile picture for christhefrog

Construction loans

Hi,

We are currently looking to buy a lot and build on it. We have been working on the price of the lot and also found a decent builder (including checking background, past projects, BBB, etc). We have 20% to 25% cash to put down on the cost of the land + construction.
- We would like to purchase the land cash, then use it as down payment on the construction loan. This would enable us to get a better, faster deal on the land. Is this sensible?
- Does anyone know any construction loan specialists in the Marietta, GA area?

We've done a lot of research and think we've got a lot of bases covered, but struggle to find independent information on the whole process (i do not consider a real estate agent or builder independent, as they have vested interests)

Many thanks!
  • October 31 2011 - Marietta
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Answers (6)

Shawn,
Slow night?  Where did you find 6 outdated post to reply to?
  • February 19 2013
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The best construction loan lenders in Atlanta are Regions Bank, Wells Fargo, and BB&T. They are still lending for Construction-Perm loans with 20-25% down depending on the local market.
  • February 19 2013
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Call the Regional Banks in your area. Not the big boys, but the smaller players. If any construction money is available, that is where you may find some. Good luck with that. I'm afraid you may be attempting to do the temporarily impossible. No Bank wants to loan against collateral that may be losing value as fast as, or faster than, you can construct it.

I would thoroughly search the existing homes available in that area before I would consider taking the risk, and potentially higher expense, of building one. You could buy an existing home, at a distress sale price, with a FHA 203K Renovation loan, and make the garage doors fit your toys etc...
  • November 03 2011
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Profile picture for SoCal Engr
Custom builds are not just a dollar-for-dollar cost equation. At some point, it also is driven by features/design that you're just not going to get from a tract home, spec builder, etc.

As an example, the home I designed had what I considered to be a "true 3-car garage". That meant 3 doors and bays, and each bay wide enough to be able to open car doors without worrying about the car in the next bay.

The big deltas? Each door was 10' wide instead of the normal 8'. And, there was a 2' separation between door openings. Additionally, the doors were a bit higher than "normal", to allow for taller SUVs and roof racks.

It's a small thing, but there's no way to get/find that out of pre-built houses.
  • November 03 2011
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Profile picture for waring4
This is only my opinion, to build now, and come out ahead I believe you'd have to do at least 60% sweat equity. I mean, a lot of friends, family andco-workers in the building business, that you can COUNT on to help. years ago, yes great idea, today, existing properties are a bargian. Maybe you can go with one you can rent later, when building is back? I just saw a news flash, one of the Dakoto's is on a boom, b/c of oil drilling. Ex: custom building may pay off. It would be scary for me to build at this time b/c I don't believe I could sell for building cost. Developers and builders are going under. None of this applies if your finacially independent w/o money you put in this building project and are'nt looking for a return, but possibly a loss. My opinion is worth what you paid for it. Good luck no matter what you decide.
  • October 31 2011
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Profile picture for SoCal Engr
I went down the exact same road, back in 2002-2003. We also purchased the land first, and then were working on a construction-to-perm loan through Chase. We ended up never pulling the trigger, as the construction bids were more expensive than buying comparable new construction.

Best of luck.
  • October 31 2011
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