LEARN MORE AT: http://beaueckstein.com How to get a Construction Loan 1. Identify the property that you are interested with. You may: Write an offer Already have the property (you already own it or a partner owns it) 2. Get the financing so you can build your house or apartments Our company usually get involved right around when: the plans are done you have submitted them you’re going to get all your permits and you’re going to get what we call shovel ready The difference is that sometimes we help and we’ll do an acquisition loan We do acquisition type loans that lead into a construction loan. Those type of deals we structure them first as the purchase money deal and then we’ll usually do a second deed of trust, which is the construction money. But that’s after the plans get approved through the city. Are the requirements more stringent, less stringent with a construction loan? Difference is there’s hard money construction loans, there’s regular construction loans through a bank Spec - means a contractor, and investor is basically building on speculation, they’re building to sell for a profit Through Bank: in the spec world , these types of loans are very difficult in the market right now to get funded by any banks. Banks are starting, finally, to loosen up and lend a little bit more in the construction world, but it’s still very difficult Through Hard Money: We fund and we special in lending money on construction type projects we’re not so driven on having a 750 credit score and fully document everything; , we do require tax returns and bank statements and a credit report—but we look at the overall project. we put more weight on the project as opposed to the individual overall, it’s more like, we underwrite almost like a commercial property. Where the property needs to really be able to take care of itself we also do a future value appraisal based on the plans of the property. And we’ll go up to 65% of the future value