Can I finance the construction of the 5 unit apart

[Guest Guest]

Hi,

I just bought a fixer-upper with a big lot; the cost is $300,000, 10% down and finance the rest with a local bank.

 

I plan to torn down the home and hire contractors to build a 5 unit apartment;

Let's say the cost of the construction for the 5 unit apartment is $400,000. Can

I finance the $400,000 with the bank; can I put down 10% and finance the rest?

 

 

thanks.

[lacashman 0]

You first problem is that you owe for a building that you want to tear down. You will need approval from the lender to do this. But I don't think that they will go along they will want paid off.

 

different lender have different guidelines on how much they will lend on commercial construstion. But since this is a small deal and you don't have experience doing this expect a loan for around 70% of your cost.