Profile picture for caesar1075

Use new house at 50% LTV as collateral to build second home?

I am real carpenter and have $172,000 to buy a lot and build a house. I estimate that I can buy a lot and build and house for 100,000-- I can do all the work myself that should sell for about $200,000. I want to borrow $100,000 from an investor or lender and use the new home as collateral for that loan so that I can build another home. I will have $72,000 left over to pay the interest.  The point is that I want to use the new home as collateral, so I can get my original investment back and build another home without wait necessarily for the first home to sell.

IS THIS POSSIBLE- NEED HELP
  • September 07 2011 - Philadelphia
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (5)

Caesar,

Talk to a loan professional in your area. Possible remedies: Construction loan; Portfolio lender that will cross-collateralize properties; Private money loan.

Happy funding, Rudi
  • September 07 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for shapiroamg
Sounds like a plan. I think there may be an investor out ther for you but you may want to look around your town and see who might have $ to invest. I would start with any attorneys that practice real estate. Network with them and see if they have any clients with $ to spare that may want to get into small development. You would need to plan this out but you both could succeed by keeping it small and managable.
  • September 07 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Construction loan would do it, right?  Or what am I missing??  You shouldn't need to cross-collateralize if you get a construction loan and finding a lender that would be willing to allow you to cross-collateralize  may prove challenging anyway.  Rudi, do you know of anyone doing that? 
  • September 07 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I am not Rudi, but many regional banks will portfolio cross-collateralized loans.
  • September 07 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

TC we have portfolio lenders that will Cross-Collateralize, but only in CA. For a Cross-Collateralized Loan I suggest talking to local banks and credit unions.

For Construction Loans on a nationwide basis I only know of U.S. Bank and Wells Fargo. Certainly, there are a lot more.

Happy funding, Rudi
  • September 07 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.