Florida Pre-Construction Spec Homes

You can build a spec home with 100% construction financing. This means you can build a home worth up to $400,000 for as little as $4000 down and no more out-of-pocket expenses until the home is finished and ready for sale. You can pre-sell the home before completion and lock in your profit.

This is not about the house or the land. It is all about the financing.

100% Pre-Construction Financing

What I am about to describe is a financing program that makes us different than most other realtors. This is about getting the maximum leverage from a real estate deal. We use this process in Ocala, Cape Coral, Lehigh Acres, Punta Gorda, Hernando County and other areas throughout the state.

The 100% financing means that with the exception of a small down payment, the lender is going to buy you a lot and build you a house. You owe nothing until the house is complete.

There is no magic involved. We can do this because we have spent months negotiating special financing with various lenders.

The entire program is dependent on the appraisal value of the property. Our challenge, which we have met time and time again, is to insure that the appraisal on the house and lot is at least 10% greater than the cost to acquire it. This is an up front appraisal and not one that takes place a year later.

If the lot is $60,000 and the house $240,000, they will have an appraisal of at least $330,000 before the deal closes. In theory, you have at least $30,000 of equity going into the deal. In many cases the appraisal is a lot higher than 110%.

The lender is going to purchase the lot, pay the builder their draws as the construction progresses and monitor construction. When it is finished, the house is yours to sell or rent.

This is the ultimate OPM (Other People's Money) deal. The mortgage company is paying almost all the costs so you can buy and sell a new home with very little out-of-pocket expenses.

Investment Process

We can break the whole process down into a few simple steps:

1. Qualifying for the Program - The lender wants a credit score of 700 (depending on your situation you might have to verify 2 years of employment and/or 2 years of rent receipts or mortgage payments).

2. Selecting a Lot - We have individuals who have special expertise in lot selection. They are very familiar with all of the problems associated with this process and will assist you in finding a suitable lot. You can come out and look at the lots or have us pick one and send you the details.

Lots go very fast. I don't want to make it seem like we are trying to force you into a decision. When we send you a lot contract, you have less than 72 hours to sign the contract and return it. Very often the lots get sold the same or next day. So, if you plan to wait and think about it for a few days, chances are you will end up with nothing.

3. Selecting the Home - Within the next few days after you get confirmation on the lot, you need to select the home. We work with a few builders and we will help you to choose a model that makes sense for the lot you are building on.

Remember, you are building a home to sell or rent and not to live in yourself (usually). You want to keep the upgrades to a minimum.

4. Construction - At this point the builder will pull permits and start construction.

Is This a Sure Thing?

We do have some “sure thing” investments. You invest $1500 in a CD and 15 years later you walk away with a cool $3,000.

In our investment program you are building affordable housing in the fastest growing areas of Florida. The mortgage company is lending you almost all of the money necessary to buy a lot and build a house on it. When it is complete or anytime before, you can sell this brand new home for a profit. Even if the market softens and the 20 - 30% increases we have seen go into the toilet and drop to 10%, you still have a $30,000 profit on a $300,000 house with a $5,000 investment.

Regardless of "Bubble Hysteria", affordable housing is in demand. There are no surpluses of lower cost homes for first time buyers and the houses sell very quickly. But, I would be remiss if I did not tell you that this is an investment and it is not a sure thing.

Detailed Information

I have detailed information on the financing, locations, home selection, etc. You need to call me and I can send you what you need.