Lakes Region Builder

pjs1342 · 09-01-2010, 05:10 PM

Hi. I am looking for a builder who could finance the construction of a new home for me. I would be willing to use my lot as collateral. I would pay the monthly bill like a conventional mortgage and we could draft up the terms and conditions by an attorney. If interested, please contact me.

secondcurve · 09-01-2010, 08:19 PM

Quote:

Originally Posted by pjs1342

Hi. I am looking for a builder who could finance the construction of a new home for me. I would be willing to use my lot as collateral. I would pay the monthly bill like a conventional mortgage and we could draft up the terms and conditions by an attorney. If interested, please contact me.

Not many builder are in that type of position these days and if they are they probably aren't willing to take that kind of risk.

Good Luck

beachgal · 09-01-2010, 08:25 PM

I know what you're saying.. but it's worth a shot to throw it out there! I figured there may be someone who has the resources to do it in this down economy!! Thanks!

SIKSUKR · 09-02-2010, 12:35 PM

I would very surprised if any builder would take that on. Even spec builders don't finance the houses themselves in general. They have financial backing of some sort. Why would they want that liability?

gf2020 · 09-02-2010, 09:32 PM

Why not just get a conventional construction loan from a local bank?

When building a home, you, the homeowner, want to be in charge of the purse strings and be responsible for paying the disbursements to the builder.

VitaBene · 09-04-2010, 10:37 PM

Quote:

Originally Posted by gf2020

Why not just get a conventional construction loan from a local bank?

When building a home, you, the homeowner, want to be in charge of the purse strings and be responsible for paying the disbursements to the builder.

GF, I think a person acting as their own general contractor has a much more difficult tome getting a construction loan nowadays. I understand your point but being a GC demands time and presence. Banks know this and are reluctant to lend to non-pros.

jmen24 · 09-05-2010, 08:54 AM

In a standard construction loan from the bank, they will require that you have a builder that will perform the work. The owner is in no way allowed to manage the work, acting as a builder. The GC (builder) submits an invoice for work completed, the bank shows up and does an inspection. If everything is up to snuff, they cut a check and post the notice of said check on a board at the site. That way all the subs know that a check has been cut. It prevents builders from running with the ball or telling folks they have not been paid yet. And it prevents homeowners from getting a loan and building garbage that will be worth a lot less than the note.

Gone are the days of getting a construction loan and acting as your own builder. The banks rarely play those games anymore.

As for finding a builder that will finance a project for you. You are allowing the builder control of your project and the money to produce it, but your name will be on the note, thus being stuck with the debt at the end. You are an adventurous person. I have never even heard of this idea, let alone any collegues that would work like this.

Of the group of builders across the state that we have relationships with, in that we share financial information and strategy with each other. Most everyone is holding capital tight these days, having lost more than half of the workforce in layoffs, that capital is being used to continue payroll for office and estimating functions to get more work lined up to bring the workers back and start building again. These companies are in the 1.5 to 8.5 million a year in revenue range. We all have showrooms, multiple work teams, multiple divisions and have been in business for more than a decade (at least).

Good luck with your idea though.

gf2020 · 09-05-2010, 10:07 AM

Quote:

Originally Posted by VitaBene

GF, I think a person acting as their own general contractor has a much more difficult tome getting a construction loan nowadays. I understand your point but being a GC demands time and presence. Banks know this and are reluctant to lend to non-pros.

I wasn't proposing that someone should act as their own general contractor, however the process would be the same. Even in today's market, banks will lend based on risk and collateral, regardless if the owner is acting as their own GC or they have hired a local builder.

Quote:

Originally Posted by jmen24

In a standard construction loan from the bank, they will require that you have a builder that will perform the work. The owner is in no way allowed to manage the work, acting as a builder.

Gone are the days of getting a construction loan and acting as your own builder. The banks rarely play those games anymore.

This is not an entirely true statement. Maybe the banks you work with prefer to not have the property owner act as their own general contractor but it is perfectly legal for the property owner to do so and banks will still lend to owners for exactly this purpose.

We are all in agreement, however, that pjs1342's proposal is unlikely in this current economic climate.

BroadHopper · 09-05-2010, 08:37 PM

Seems like the construction industry and the banks are cutting each others throats.

Banks are reluctant to give construction loans without a substantial down payment. Banks no longer give bridge loans. This makes it harder for the average consumer to think about building their dreams.

Even though the economy is down and disposable income is down almost 40% according to WSJ. GC, Builders and subcontracters are releuctant to lower their wages to the sign of the times. Their excuse is that since there is no work they must pay their bills. I say there is work but people can not and will not pay the high wages.

No wonder housing starts are at an all time low!

I should know. I am building a house. Since I lost my job, I had to let the GC go and I am doing all I can to complete the house. It is a time consuming job but I have the time to do it.

I have found contractors who are willing but grudgingly work on a time and material basis. I pay for their time and they will buy all the materials and supplies from a company that I have an account with. This way I can terminate a subcontractor if I feel the work is not satifactory.

There are subcontractors that are desperate enough to work under this arrangement. They are not too hard to find.

Belmont Resident · 09-10-2010, 04:43 AM

You are mistaken. It might not be the norm but it does happen. Laconia Savings bank is backing a new home construction that I’ve been contracted to paint and the homeowner is overseeing the whole project.
Unless you have the time and resources and have ALL of your contractors lined up its a big mistake. This house has been under construction for over a year.
Many costly mistakes have been made which have driven the cost up significantly.

I doubt many contractors would be willing to do this even with unlimited financing.
In a situation like this the only thing the homeowner is really entitled to is the value of the property when the sale is complete. A builder would be crazy to put up all the money to complete a project like this then split the profits. That is if that’s what the plan is.

09-01-2010, 05:10 PM	#1
pjs1342 Junior Member Join Date: Mar 2009 Location: Westie, Cape & Nh Posts: 15 Thanks: 4 Thanked 3 Times in 2 Posts	Lakes Region Builder Hi. I am looking for a builder who could finance the construction of a new home for me. I would be willing to use my lot as collateral. I would pay the monthly bill like a conventional mortgage and we could draft up the terms and conditions by an attorney. If interested, please contact me.

09-02-2010, 12:35 PM	#4
SIKSUKR Senior Member Join Date: Apr 2004 Posts: 5,075 Thanks: 215 Thanked 903 Times in 509 Posts	Good luck I would very surprised if any builder would take that on. Even spec builders don't finance the houses themselves in general. They have financial backing of some sort. Why would they want that liability? __________________ SIKSUKR

09-05-2010, 08:37 PM	#9
BroadHopper Senior Member Join Date: Oct 2004 Location: Laconia NH Posts: 5,522 Thanks: 3,128 Thanked 1,090 Times in 784 Posts	Construction today Seems like the construction industry and the banks are cutting each others throats. Banks are reluctant to give construction loans without a substantial down payment. Banks no longer give bridge loans. This makes it harder for the average consumer to think about building their dreams. Even though the economy is down and disposable income is down almost 40% according to WSJ. GC, Builders and subcontracters are releuctant to lower their wages to the sign of the times. Their excuse is that since there is no work they must pay their bills. I say there is work but people can not and will not pay the high wages. No wonder housing starts are at an all time low! I should know. I am building a house. Since I lost my job, I had to let the GC go and I am doing all I can to complete the house. It is a time consuming job but I have the time to do it. I have found contractors who are willing but grudgingly work on a time and material basis. I pay for their time and they will buy all the materials and supplies from a company that I have an account with. This way I can terminate a subcontractor if I feel the work is not satifactory. There are subcontractors that are desperate enough to work under this arrangement. They are not too hard to find. __________________ Someday may never be an actual day.

09-10-2010, 04:43 AM	#10
Belmont Resident Senior Member Join Date: Apr 2004 Location: Belmont NH but prefer Jackman Maine Posts: 1,857 Thanks: 491 Thanked 409 Times in 251 Posts	jmen24 You are mistaken. It might not be the norm but it does happen. Laconia Savings bank is backing a new home construction that I’ve been contracted to paint and the homeowner is overseeing the whole project. Unless you have the time and resources and have ALL of your contractors lined up its a big mistake. This house has been under construction for over a year. Many costly mistakes have been made which have driven the cost up significantly. I doubt many contractors would be willing to do this even with unlimited financing. In a situation like this the only thing the homeowner is really entitled to is the value of the property when the sale is complete. A builder would be crazy to put up all the money to complete a project like this then split the profits. That is if that’s what the plan is.

09-01-2010, 08:25 PM	#3
beachgal Junior Member Join Date: Mar 2009 Location: boston Posts: 5 Thanks: 1 Thanked 0 Times in 0 Posts	I know what you're saying.. but it's worth a shot to throw it out there! I figured there may be someone who has the resources to do it in this down economy!! Thanks!

09-02-2010, 09:32 PM	#5
gf2020 Senior Member Join Date: Feb 2009 Location: North of Boston Posts: 203 Thanks: 11 Thanked 35 Times in 28 Posts	Why not just get a conventional construction loan from a local bank? When building a home, you, the homeowner, want to be in charge of the purse strings and be responsible for paying the disbursements to the builder.

09-05-2010, 08:54 AM	#7
jmen24 Senior Member Join Date: Feb 2009 Posts: 1,139 Thanks: 223 Thanked 319 Times in 181 Posts	In a standard construction loan from the bank, they will require that you have a builder that will perform the work. The owner is in no way allowed to manage the work, acting as a builder. The GC (builder) submits an invoice for work completed, the bank shows up and does an inspection. If everything is up to snuff, they cut a check and post the notice of said check on a board at the site. That way all the subs know that a check has been cut. It prevents builders from running with the ball or telling folks they have not been paid yet. And it prevents homeowners from getting a loan and building garbage that will be worth a lot less than the note. Gone are the days of getting a construction loan and acting as your own builder. The banks rarely play those games anymore. As for finding a builder that will finance a project for you. You are allowing the builder control of your project and the money to produce it, but your name will be on the note, thus being stuck with the debt at the end. You are an adventurous person. I have never even heard of this idea, let alone any collegues that would work like this. Of the group of builders across the state that we have relationships with, in that we share financial information and strategy with each other. Most everyone is holding capital tight these days, having lost more than half of the workforce in layoffs, that capital is being used to continue payroll for office and estimating functions to get more work lined up to bring the workers back and start building again. These companies are in the 1.5 to 8.5 million a year in revenue range. We all have showrooms, multiple work teams, multiple divisions and have been in business for more than a decade (at least). Good luck with your idea though.