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8 years ago
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Owner-Builder financing in KS
Comments (0)Anyone have tips for getting an owner-builder construction loan in Kansas?...See MoreHow to Protect Yourself When Self-Financing a Custom Build?
Comments (10)I made a nice little supplement to my appraisal work by doing the construction draw work for projects that I appraised. I have no special training in this area and the extent of my responsibility was to tell the bank that the work had been completed. It's really not rocket science. Did they install the drain tile? Yes or No. If yes, they get paid. If no, they do the work and I get called out to reinspect. That's another fee btw. The bank doesn't care about the quality of the workmanship or the number of times the send someone out to look at things. They just want to know if the work is done. If you want to know if the work is satisfactory or meets code, hire your own qualified inspector. When I was building my own home and self-financing, I did my own inspections before I wrote the check. If I had a question, I met with my GC and discussed it. We started with a basic draw schedule. He provided me with bills at the end of each month. There were times when I would get two bills, but those were exceptions and I was expecting them. I provided him with some small amount of working capital to get the project started. He warned me when a big ticket item that his working capital account couldn't handle was approaching. Framing materials was a big number, for instance. The supplier wanted to a check now. Be certain to get itemized bills and a methodology for lien releases. A good GC will have a system set up for these functions....See MoreFinancing Remodeling
Comments (13)@C Marlin - For the most part based on impressions of the HH these are not people who are likely to have a lot of cash. For the most part they are first time homeowners who appear to have modest means. I am really basing it on what they are stating - e.g. that somehow for the ordinary buyer who is relying on a mortgage that somehow if they don't spend up to the amount the are approved, that somehow they will then have this "saved" money in pocket. Based on the way they are referring to having a "budget" which usually means what one is approved for. In general, one doesn't think of one's cash savings as being part of the home budget except to the extent that one needs a down payment and closing costs and for the most part a down payment isn't significantly less if one spends less than the "budget" - e.g. there isn't a direct correlation for being a home that is $50,000 less than what one is approved for and then having $50,000 for immediate improvements. ETA - And I am completely ignoring the economics of home remodeling for those who aren't somehow in the business and are paying full "retail" and not doing major DIY. Based on the "plots" (since all reality shows have somewhat of a story line) it is generally the aesthetics that are the issue - e.g. they want white cabinets or spa type bathrooms. Often times the actual expense of taking down a wall to create "open floor plan" is ignored....See Moreowner builder financing options
Comments (19)The consumer mortgage industry, including construction loans, is largely based on reps and even underwriters who are just checking boxes and really don't have the skills or knowledge to deviate from norms. One of my colleagues was a loan underwriter for a while, her degree is in classical studies (Latin), I dare say that she is not an expert on risk analysis. The problem likely has nothing to do with the OP's construction ability, or the OP's credit, etc. it is just the OP is asking for a loan that several deviations from typical and many banks are simply not interested in that business, mostly because there isn't enough owner-builder financing to defer the marginal costs of more training for their reps and underwriters. I have had good luck with medium sized regional banks. Most regions have a bank that will write portfolio loans and will work with Owner-builders, however, there may only be a single bank willing to do that in a particular region, you should just keep looking. I am sure North Carolina has a few "farmers banks" which can typically be a bit better for this type of financing. --- If that doesn't work out, there are always services like Ubuildit which basically take a fee for construction management and smooth the process of finding subs and financing. These companies are largely just selling their contact list, but that may be what you need. There are Ubuildit offices in North Carolina and they will have banks that are willing to finance their projects....See MoreLynnNM
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