# Financing a New Construction Project with a Loan from an American Lender & a Real Deal Example - Noam Segal - Entrepreneur of the Week - Post 5+ 6 #EntrepreneuroftheWeek #RealEstate #Flips #BuyAndHold #BRRRR #Mortgage #Investors #RiskManagement #NewConstruction Hi everybody, Today I want to talk about getting a construction loan from an American lender.…
2019 MARKET OVERVIEW
Median Home Income:
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Located on the northern banks of the Licking and Ohio River junction, Cincinnati is the third-largest city in Ohio and the 65th-largest city in the United States. Cincinnati was also the first major American city founded after the American Revolution, which is why it is sometimes thought of as the first purely “American” city. It was one of Winston Churchill's favorite US cities. He called it, "… the most beautiful of the inland cities of the union."
In recent years, Cincinnati has become a popular destination for new and relocating corporate headquarters, including 10 Fortune 500 companies and 17 Fortune 1000 companies. Some of the more well known of these companies include: Procter & Gamble, The Kroger Company, Macy's, Inc., and General Electric. Today, the Cincinnati metro area is recognized as one of the nation's 25 fastest developing regions (according to the Brookings Institution) with a Gross Metro Product of $ 119 Billion.
Today, the Cincinnati metro area is recognized as one of the nation's 25 fastest developing regions (according to the Brookings institution) with a Gross Metro Product of $ 119 Billion.
Why invest here?
With the cost of living and housing still below the national average, Cincinnati offers great opportunities for real estate investors this year. Especially for those who are looking to invest in REAL Income Properties ™ that'll produce positive monthly cash flow and have a strong chance of steady appreciation.
Cincinnati Trends & Statistics 2018-2019
In this section, you'll learn about the top factors that make Cincinnati one of the strongest real estate markets today, including: affordability, cash flow, and equity growth potential. Explore Cincinnati's housing market, population, and employment trends in the tabs to learn more.
Sources of information:
- “# 2 City to Buy Home for Best Rental Return” - CNBC
- "# 5 in America's Most Affordable Cities" - Forbes
- “# 2 Best City to Build a Green Career” - Good Call
- “# 9 Best City to Raise a Family” - Forbes
- “# 10 Best City for Commuters” - Trulia
- “# 13 Best City for New Grads” - Good Call
- "One of 15 US Cities' Emerging Downtowns" - Forbes
- “Steady Widespread Growth Continues” - Federal Reserve Bank of Cleveland
Financing a New Construction Project with a Loan from an American Lender & a Real Deal Example - Noam Segal - Entrepreneur of the Week - Post 5
#EntrepreneuroftheWeek #RealEstate #Flips #BuyAndHold #BRRRR #Mortgage #Investors #RiskManagement #NewConstruction
Today I want to talk about getting a construction loan from an American lender.
Okay, so I'll start by saying that this is a really not a simple process for an entrepreneur who does not have an SSN or an American partner.
If you are able to find a body that is willing to give a foreign investor a construction loan, the lender will want to check on you both financially and in terms of real estate experience for you. This will directly affect the terms of the loan he will be willing to give you.
In addition the lender will also require to check with the operating contractor,
He will ask for:
• His company name
• Contractor's license
• Examples of projects he has carried out in the last two.
He will ask you for tax returns from previous years, your and your company's capital statement, a printout of your bank account and more.
After you go through this step you will need to view the project details:
• House data you want to build such as size, number of rooms, baths, parking and more
• Architectural plan of the house you will build.
• An orderly budget for all construction
• General insurance of the contractor
• BUILDER RISK specific insurance for the current project
• The lender will send an appraiser who will assess the value of the home after it is built.
After going through all this bureaucracy usually anyone who has over 20 percent in the company will need to sign the loan, if you are not in the US you will need to use a POA and apostille power of attorney or find an American notary in the country (there are a few).
The lender will never give you the full cost of the project usually between 70-80 percent and will require you to put your money first before he puts his money.
There is no doubt that the process can be exhausting and sometimes everything seems to fall apart (it happened to us several times especially during the Corona period due to bureaucratic matters) but when it succeeds it fundamentally changes the returns of the project.
Two other aspects that I really like to get loans for are:
• The lender is actually another layer of protection in my tests and usually the appraiser is pessimistic, we almost always sold well beyond his forecast. If the lender is willing to give money then the deal makes sense.
• The loan is never given in advance, the money you will receive is against the things actually done and the correlation to the budget you submitted to them. This is another way to monitor the contractor's progress.
In the photos - one of the projects I did with a loan from an American lender.
In my next post I will give a numerical example of a project taken with an American loan without investors.
Continue reading on our site:
my previous post I talked about conditions for getting a loan for entrepreneurs who do not have an SSN.
So as most of you know house prices have risen significantly and so have wood and various building materials.
Finding real improvement deals is not at all simple and within that also construction deals.
Today I will show you a real deal I made right at the beginning of Corona April 2020 and used a loan from an American private lender to carry out the construction.
The house is on a basement two stories above. House size 2634 SQ (without basement). There are 5 bedrooms and 3 bathrooms.
The price of the plot includes closing expenses - $ 61000
Construction price - $ 281500
Selling price - $ 420000
Brokerage expenses - $ 21000
Closing expenses (Tachles goes to the buyer's mortgage) - 3500
Total profit - $ 53000
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Known primarily for its annual balloon fiesta and as part of AMC's performance show "Breaking Bad," Albuquerque, New Mexico, is a metropolitan area rich in culture and naturally beautiful. Albuquerque is also one of the major cities in the southwest of the city, with a diverse population and some of the leading high-tech research enterprises in the country, including National Sandia Laboratories, Intel and the University of New Mexico. At the same time, its cultural traditions continue to be an integral part of daily life in the city. With one foot in the past, one foot in the present and two eyes for the future, Albuquerque is a fascinating place to visit and an even better place to call home. (Source: (https://www.visitalbuquerque.org/about-abq/history/)
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Lior Lustig Chief Executive - The Realestate Investor Forum
Lior Lustig has been an experienced real estate investor active in the field in Israel and the US since 2007. Lior has extensive experience in the acquisition and management of single and multifamily properties.
Lior currently runs The Real Estate Investor Forum, which owns a real estate brand and interest, the Facebook group and the “Real Estate Forum USA” site. Lior is versatile in a wide variety of investment markets in the United States and provides solutions to investors through the company.