Funding Spec Homes
I stumbled across this website and found tons of great information. As a home builder how do I go about locating investors or investor groups to fund the building of spec homes versus going to a bank? What are the usual splits? I know here in Texas there are lots of out of state investors, are you better off going with someone you can find local or does it matter? Any help is greatly appreciated.
[ Edited by bgr8ful on Date 02/14/2007 ]
What kind of investors are you looking for? It seems like the latest housing starts have slowed down a bit.
Building is still pretty good down here in the Hill Country. I think it will pick up after the first quarter, already starting to see some of the larger BOYL guys starting to expand, not as good as last year but leveling off. San Antonio just got inundated with Production homes, Houston slowed down so they came here.
Why a Builder Spec Loan?
Builders and Investors to finance the construction of a spec or model home as well as rehab an existing home.
Benefits
• Construction-only financing
• Can close in individual or company name
• No prepayment penalty
• Quick approval process
Property types
• 1-4 unit properties
• Modular or stick-built
• No condos or townhomes
Terms
• 12, 15, 18 months
• Two-year balloon
• Market pricing
• Interest-only payments
• Builders prime plus 1%
• Investors prime plus 1.5%
Financing
• Full Doc (min. FICO 660- 680)
Builder – available up to 80% of value or 100% of hard cost (whichever is less)
Investor – available up to 75% of value or 80% of purchase price (whichever is less)
• SIVA Stated Income Verified Assets (min. FICO 720)
Builder – available up to 75% of value or 100% of hard cost (whichever is less)
Investor – available up to 75% of value or 80% of purchase price (whichever is less)
Financing may include
• Land/house purchase or refinance of existing property
• Direct construction costs
• Permits, architect, engineer and similar third-party fees
That was the web site that would be vary helpful to me.
Thanks
That was the web site that would be vary helpful to me.
Thanks