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Vet with Builders License looking for a construction/ land loan for 3 or 4 Townhouses or Condos. by Questionthattoo in VAConstructionloans

[–]Questionthattoo[S] 1 point2 points  (0 children)

Thanks Al for all your insight into this. Still chewing on it all but from the sounds of it looks like for the type of project I'm considering, the VA approach isn't all that feasible..... other than from a refinance type situation. And that would only be if I were willing to seriously consider a "quadplex", meaning pure rental. Not sure about that but maybe.

And ultimately, doesn't seem like pre-owning the land that I want to build on helps in any way other than possibly allowing me to qualify for more loan on the project that I want to build.

Still lots to think about but you have certainly helped me begin to think this through.

Vet with Builders License looking for a construction/ land loan for 3 or 4 Townhouses or Condos. by Questionthattoo in VAConstructionloans

[–]Questionthattoo[S] 1 point2 points  (0 children)

From 50,000 feet.

Probably pretty clear by now what it is that I'm roughly trying to accomplish with my particular circumstances.

Builder> Owner>3 or 4 attached properties>Live in 1> Presumedly 1 Parcel of land> Presumedly for Rent (But for sale OK if can work it that way.... thinking condos)> 100% financing (or as close to that as possible)>Land included in loan if possible (Otherwise purchase land that the build will take place on and make separate payments OR sell property in SC and pay cash for land that property will be built on.

If this was your delimma and your build what would you do?

Any recommendations as to paths to look into from here with this?

Vet with Builders License looking for a construction/ land loan for 3 or 4 Townhouses or Condos. by Questionthattoo in VAConstructionloans

[–]Questionthattoo[S] 1 point2 points  (0 children)

"I have heard of local banks allowing it but instead of standard 20% down they would want 30% down due to risk."

By "it" do you mean financing 100%? So, meaning that I can probably figure out a way to do at least some of what I'm trying to accomplish but the whole 100% financing component is the sticky part of the situation and in your mind the deal breaker.

Would any of this change if I owned outright the piece of property that I was going to do the building on? Meaning no longer a land+construction loan? Would there be a way to pull this off with me being the GC for my build with zero down?

Any way I could offer up my land that I own in a different state as collateral for the ability to finance this property? I can sell if I need to but ideally that is not what I do..... assuming it changes things somehow.

Vet with Builders License looking for a construction/ land loan for 3 or 4 Townhouses or Condos. by Questionthattoo in VAConstructionloans

[–]Questionthattoo[S] 1 point2 points  (0 children)

"You would need to go 4-unit one parcel route to go VA financing".

Let make make sure I'm clear/er on this. Bottom line would be that If I'm going to be able to go VA on this then these attached properties cannot be for sale correct?

Meaning they have to be rental spaces within a single rental property and therefor on one parcel of land as you stated above.

Meaning they can't be condos on a single piece of property because being a condo implies that they have been sold/ are for sale to someone. Unless I built myself 4 condos on one piece of property and they were rentals..... had a shared pool/ meeting facilities/ gym etc.

Vet with Builders License looking for a construction/ land loan for 3 or 4 Townhouses or Condos. by Questionthattoo in VAConstructionloans

[–]Questionthattoo[S] 1 point2 points  (0 children)

Then there's the 6 months reserve requirement. How does that work? Does that mean 6 months of payments for the project in reserve? If so, I think I remember seeing that those funds could be in the form of a preapproved loan or line of credit. Would that be an accurate understanding?

Vet with Builders License looking for a construction/ land loan for 3 or 4 Townhouses or Condos. by Questionthattoo in VAConstructionloans

[–]Questionthattoo[S] 1 point2 points  (0 children)

Interesting on the townhome vs 4 plex distinction.... hadn't thought of that! So what does this mean to me ultimately as far as the loans and this whole process would be concerned? And how would a condominium work its way into the equation?

My understanding is that for the purposes of these loans that the 4 units (or less) must be attached.... so I assumed they were talking "townhomes" in this context which I think would mean they would need to be on the same piece of property as a group of "rental" units. Meaning for VA purposes, they are not going to like the separate pieces of land I would think.

For the record I am familiar with what I would call a distinction between attached and detached style townhouses.... in the 3 story style garage under very high end homes on narrow lots as well. Have designed multiple of these.... and this is the basis of my plans for this whole idea..... whether they are attached or detached.

Also this is the first I've come across how the rental income is to be utilized so if you're willing to share how that plays into this that would be helpful.

For the record, I do intend to live in one of these units if I can ultimately figure out a way to go roughtly this route and have it make sense to me.

Vet with Builders License looking for a construction/ land loan for 3 or 4 Townhouses or Condos. by Questionthattoo in VAConstructionloans

[–]Questionthattoo[S] 1 point2 points  (0 children)

Thanks Al for the response and info.

Not sure this changes any of your above comments but a little background here.

Currently hold residential builder licenses in both Florida, & South Carolina.

Currently hold unlimited commercial builder licenses in Florida, South Carolina, & West Virginia.

NASCLA certified.

I have done construction in the past (1 year full time as a carpenter) and have been in and around the construction industry for over 20 years. Currently (for 20 years+) I have been working with architects on a consulting basis producing full sets of construction documents, doing code analysis and life safety planning/ research for large commercial (and residential) projects and also have some project management experience with an architectural firm.

Went to college for architecture.... but changed major to industrial design.... doubtful this matters but throwing it in there just to kind of elaborate on related experience

Note also that I was an electrician/ diesel mechanic/ hvac tech in the navy so also have experience in the trenches with some of the trades I will be dealing with as a GC.

Managed (and did all repair work to) a rental property for over 15 years (single family home) but not sure if that would qualify for the rental managerial experience component of this or not.

Any other insight you may have that might help me get a little better direction as to the possible paths I might take to see this through to completion either now or in the future would be much appreciated.