New Construction Financing for Real Estate Investors
Whether you prefer fix and flip, buy and hold or BRRRR as an investment strategy you will find great returns in adding the new construction to achieve your investment goals. Investing in New Construction it is generally easier to have greater profit margin that in many fix and flip projects plus all things equal new construction is more desirable to many end buyers and consequently new construction homes sell faster. You can even presale your properties and therefore the buyer shares in your cost of construction.
New Construction Flip
New term old concept. Builders buy lots, build a house and sell it. Rehabbers buy a house rehab it and sell it. The difference is Ground up Construction projects will generally allow you to make more money. The out of pocket costs may be slightly higher, but the profit is greater and if you presale the home the end buyer may share in your costs to build the property.
New Construction Hold
Like buy and hold you can build long term cash flow buy building (pun intended) a portfolio of cash flowing properties that you will own and manage. With Ground up Construction the big advantage is you control the quality of your portfolio offering greater life expectancy with minimum annoying repairs as you build your homes. Of course new construction properties are generally more desirable, easier to rent and attracts a more qualified tenant. Even if you choose short term rentals or senior housing, when you build you have more flexibility to configure the homes to meet your long term goals.
New Construction BRRRR
For Rehabbers BRRRR represents Buy the property, Rehab the property, Rent the property, Refinance the property getting cash out, Repeat. For Ground up Construction Builders BRRRR represents Buy (the lot), R= Build the home, Rent the property, Refinance the property getting cash out, Repeat. The ultimate goal is that the cost to buy and rehab or buy and build will be less than 70% of the completed values, thus allowing you to refinance cash out at 75% and getting most or all of the money you invested back to do the next project.
New Construction or Rehab
Whether a Real Estate Investor chooses to build a home or rehab a home is a matter of the market they are in, their personal preference and liquidity. As it is slightly more money out of pocket for a new construction project but the benefits are much greater.
In either case new construction is a great option for rehabbers who choose to build in addition to rehab properties. FBC funding has many financing options for real estate investors.
For rehabbers FBC Funding offers rehab funding options including full documentation 100% financing options, lite documentation up to 90% loan to value options and up to 85% low doc LTC options where we can even roll in the payments into your loan.
For builders FBC Funding offers new construction financing programs including; 100% vertical financing options, up to 95% of vertical financing and 70% of land acquisition or 85% loan to cost options.
For Experienced Builders and Rehabbers FBC Funding offers new construction financing and rehab financing exposure credit lines to do multiple projects simultaneously.
These options are for 1 to 4 unit properties but we also offer renovation and construction financing options for multifamily and mixed use properties.