I ran into this a month or so ago. Outside investors will not underwrite jumbo construction loans California since the state has been declared a declining market. I found a local bank willing to give me the loan but honestly the whole process scared me off. The property I was looking to buy is still way overpriced and construction costs are sky high. The market still has a long way to fall (especially in my neck of the beach) and as much as I’d love to build right now, I can’t justify the risk that the completed new construction could easily be worth 20% less than what I put into it in a couple of years.

I ran into this a month or so ago. Outside investors will not underwrite jumbo construction loans California since the state has been declared a declining market. I found a local bank willing to give me the loan but honestly the whole process scared me off. The property I was looking to buy is still way overpriced and construction costs are sky high. The market still has a long way to fall (especially in my neck of the beach) and as much as I’d love to build right now, I can’t justify the risk that the completed new construction could easily be worth 20% less than what I put into it in a couple of years.

I ran into this a month or so ago. Outside investors will not underwrite jumbo construction loans California since the state has been declared a declining market. I found a local bank willing to give me the loan but honestly the whole process scared me off. The property I was looking to buy is still way overpriced and construction costs are sky high. The market still has a long way to fall (especially in my neck of the beach) and as much as I’d love to build right now, I can’t justify the risk that the completed new construction could easily be worth 20% less than what I put into it in a couple of years.

I considered a construction loan as well on some tear downs up here. But after researching what it takes and how the loans work and how you get them and all the particulars (not to mention the hassels with the construction itself), I decided it would take far too long, with too much risk. Instead, I would rather buy a fixer upper I can improve over time with cash, rather than financing.

Raw land construction loans were even more risky to me after looking into it.

I considered a construction loan as well on some tear downs up here. But after researching what it takes and how the loans work and how you get them and all the particulars (not to mention the hassels with the construction itself), I decided it would take far too long, with too much risk. Instead, I would rather buy a fixer upper I can improve over time with cash, rather than financing.

Raw land construction loans were even more risky to me after looking into it.

My father is actually in the process of acquiring a construction loan for a remodel on his childhood home that he just inherited after the passing of his parents. The house had a refi a few years back for a small amount of money to help cover bills that could not be covered with their retirement funds.

When my dad transferred the deed into his name and assumed the loan balance, he also inquired about a construction loan. He was told by the bank that they are not giving any construction loans unless the home is the owners primary residence for at least 8-12 months — I cant remember the specific time frame.

Obviously for someone in my father’s situation, this isn’t a problem. But I can imagine the surprise if this happened to a flipper expecting to do a zero out of pocket flip.

My father is actually in the process of acquiring a construction loan for a remodel on his childhood home that he just inherited after the passing of his parents. The house had a refi a few years back for a small amount of money to help cover bills that could not be covered with their retirement funds.

When my dad transferred the deed into his name and assumed the loan balance, he also inquired about a construction loan. He was told by the bank that they are not giving any construction loans unless the home is the owners primary residence for at least 8-12 months — I cant remember the specific time frame.

Obviously for someone in my father’s situation, this isn’t a problem. But I can imagine the surprise if this happened to a flipper expecting to do a zero out of pocket flip.