Construction loan? Land + construction? Trying to learn...

REDLYNER

REDLYNER

Mall Crawling Race Rig
Joined
Oct 31, 2008
Location
Mountain Island
I know a few of you guys are experts in this area, I’m trying to learn. My dad and I bought some land together, it has some old structures (100 year old house and barn), we are looking at taking those down and building a cabin for my parents. Non primary residence.

Are there credit unions and banks that you guys prefer over others for construction projects like this?

Also, safe to assume $100 to $120sq/ft finished for such a structure? Or is that off? A-frame, or single story + loft type layout.
 
Loganwayne said:
I’d say your sf number is going to end up being low. Lumber has sky rocketed in the last month. Now there is a shortage on pvc. I can’t get anyone to hold pricing on anything longer than 7 days


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I’ve actually heard that as well in the last 48 hours. Those numbers were from my looking Into this a year or so ago.
 
There is a new stick built house going up near me. Over 5k sqft. At the value on the permit, it is $79 psf. I dont see how that's going to happen.

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I can only hold lumber pricing for 3 days. There’s a shortage on shingles, which has driven up the demand for metal roofs. Labor is at a premium, and steel is all over the place.
I would think you’d be $150+ sqft depending on how you choose to finish it out (counters, cabinets, flooring, etc)
 
My recent experience had been that most conventional banks and Credit Unions will not loan if the acreage is over 10. I had to go with Carolina Farm Credit when I built my house because I had 20 acres and nobody else would touch it. If you are 10 or less then you shouldn’t have any issues.
 
Now is a BAD time to get pricing/quotes and around here, banks are starting to make construction loans a bit more difficult. Given the lumber situation. We decided to wait out the election and winter of protests before going back to the bank
 
Fwiw, I was able to borrow against my 24 acres for a construction loan with First Citizens 2 yrs ago. BB&T wanted me to carve out 5 or less acres on the road and use that to borrow against. I didn't want to build on the road frontage so that wouldn't work for me.
 
Nothing officially, just conversations...but my brother just bought a nice house on 26 acres...so it got me itching to start inquiring about my ‘dream house’ again. Sat down with my local banker, she did some back of the envelope math...4,000sq/ft house, 10-20 acres, 6 bay stand alone garage...she told me I’d need 25-40% down for the house and property. Talked to a buddy of mine that owns and builds Built Green residential homes, told me I’d need every bit of $175-200 sq/ft for what I’d want for the house...plus the stand alone garage. Like I said, nothing official, mostly friends doing back of the envelope estimates...but was enough info for me to decide to wait a couple more years.
 
UTfball68 said:
told me I’d need every bit of $175-200 sq/ft for what I’d want for the house....
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Yep about right. That is what GC's were saying in 2018 when we wanted to start building on the 25 acres we owned. Thought that was crazy. Figured we would come out ahead to find a house already on some land. So that is what we did. Sold the 25 acres and bought the place we have now.
 
tknopp said:
Yep about right. That is what GC's were saying in 2018 when we wanted to start building on the 25 acres we owned. Thought that was crazy. Figured we would come out ahead to find a house already on some land. So that is what we did. Sold the 25 acres and bought the place we have now.
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Yeah...brothers house is a little smaller with a little more property than what I’d do...and dollar for dollar I’d end up paying about $250k more than what he did, before even adding the garage. When I looked at it from that perspective...I’m waiting for the next recession.
 
UTfball68 said:
When I looked at it from that perspective...I’m waiting for the next recession.
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You won't be waiting long...at ALL.
With home loans in the sub 3% range and EVERYONE refinancing/buying, as well as auto/toy loans at 0% look for 2008 all over again in about 6 months or less. Also, the largest auto dealer in the southeast is low on NEW inventory, but now has hundreds of repo's from the "0% or 90 days no payments" from march from all the deadbeats that couldn't qualify for 0% but had their unemployment money and were feeling [inappropriate word] rich at the time, and now can't make that FIRST payment. Remember "clunkers for cash" to Jumpstart the economy and keep the big 3 alive? How'd that work out?

With all those junk loans and the $600 a week ending...look for a bubble like we had in late 2008

If Biden is elected, look for a recession the likes you've never seen in your lifetime.

If Trump is re-elected look for civil unrest that'll make these past few months look like a gay pride parade, sending us into a recession due to lack of spending.

Either way, I'll say by February we'll be in such a downward spiral with either at the helm, that it will have everyone's head spinning.

OH..and if you've not been paying attention and are JUST now starting to think you need more ammo....good luck. I'm buying scuba equipment to go look for "boating accident" material myself
 
Yeah hoping for like 1200sq/ft or so. The size of the land is fairly decent (larger than 20 acres). I spoke with Quicken and they don’t do construction loans. I’ll make some calls this week and try to post up what the banks are saying.
 
I use my local bank, none of the big names. The big names are moving away from personalized service it seems. My local/regional bank always works with me on my construction loans, etc. They are good to work with and convenient. I use Union Bank but looks like they only go as far west at GSO.

I’d say look for a local bank or even Carolina Farm Credit. I wouldn’t do squat with Quicken, BB&T, Wells Fargo, BoA, and similar. When I talked with them all, they all either said they weren’t interested in a construction loan or their product offering was less than stellar.
 
CasterTroy said:
You won't be waiting long...at ALL.
With home loans in the sub 3% range and EVERYONE refinancing/buying, as well as auto/toy loans at 0% look for 2008 all over again in about 6 months or less. Also, the largest auto dealer in the southeast is low on NEW inventory, but now has hundreds of repo's from the "0% or 90 days no payments" from march from all the deadbeats that couldn't qualify for 0% but had their unemployment money and were feeling [inappropriate word] rich at the time, and now can't make that FIRST payment. Remember "clunkers for cash" to Jumpstart the economy and keep the big 3 alive? How'd that work out?

With all those junk loans and the $600 a week ending...look for a bubble like we had in late 2008

If Biden is elected, look for a recession the likes you've never seen in your lifetime.

If Trump is re-elected look for civil unrest that'll make these past few months look like a gay pride parade, sending us into a recession due to lack of spending.

Either way, I'll say by February we'll be in such a downward spiral with either at the helm, that it will have everyone's head spinning.

OH..and if you've not been paying attention and are JUST now starting to think you need more ammo....good luck. I'm buying scuba equipment to go look for "boating accident" material myself
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We all hope your wrong but fear your right on the money with that statement.


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I wouldn't build right now. I would just spend the time getting your plan together.
 
rabb11d said:
carolina farm credit
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I have an account with them, they seem to be the only game in town (which means no competition to drive down costs).

drkelly said:
I wouldn't build right now. I would just spend the time getting your plan together.
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It will take months and months to get the plan together, this is just part of the process for me. I’ve never constructed anything larger than a tree stand, so lots of reading and learning and listening to do.
 
I did mine through BB&T, but we already had the garage apartment on the land, so they probably viewed as a safer investment since there was a marketable "house". A friend of mine just built a house this year (f'er started in February and finished in June, his contractor didn't suck), and he went through Ag Carolina Farm Credit near Raleigh, no issues building on about 15 acres of bare land. I think its just Carolina Farm Credit down this way.

Regarding square footage, it widely depends on what finishes you go with and quality of construction, but there's no way you'll get out for less than $125/sqft in today's market, and its super easy to end up in the $150-175/sqft range. We already had well, septic, garage, driveway, grading, landscaping, etc, and still ended up at $175 per finished square foot when you factor OUT the unfinished basement. I think if I had done it myself, it would have ended up closer to $100/sqft, but it would be hard to be any cheaper.
 
We just closed on a vacation house down on Sunset Beach. We bought the lot (no existing structures) with cash then did a construction loan through Raymond James Bank. Once the final draw was complete the construction loan converted to a mortgage. Hope this helps.
 
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