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
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September 07 2011 - Philadelphia
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Replies (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
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September 07 2011
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.
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September 07 2011
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? 
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September 07 2011
I am not Rudi, but many regional banks will portfolio cross-collateralized loans.
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September 07 2011
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
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September 07 2011
 
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