Proposed New Construction For Only The Exterior Of The Home

[Mark K]

That has been my question--who would lend on this? Most lenders live in fear that they will end up with one.

Even local lenders are afraid of this type of loan. Generally, you'd have to prove that you didn't need the money first and then they'd loan about 50% LTV.

 

[Mr Rex]

You only lend on projects soon to be complete with as much borrower collateral interest as possible. Not the other way around. I'm guessing the loan ocifer still has their grade school star pins for attendance and participation and thinks because the government prints money there are no limits to how much can be printed to cure all ills..

 

[sebridges]

Your appraisal problem is quite different than the OP problem...now that you gave the information of 30 acres, the acreage imo is the dominant feature of the property and the key to comps for it....bringing a farm house into C3 condition is not that costly or important ( imo) than the large multi acre site....just do the best you can to find houses on the most similar acreage you can, adjusting for condition or upgrades is usually fairly straight forward...can I assume if rural a number of properties might have barns or sheds? Whether this combined acreage is HBU as residential ( if you are doing it as a residential appraisal ) might be another issue ,needing its own thread if it is.

Land is pretty cheap around here and in this case, about $1,850/ac with 6-7 recent comp land sales of similar parcel size within a few miles of the subject. The buyer will have about $28k in the land and about $22k in an early 70s shell on land that happens to adjoin the buyer's parcel. Crazy enough, I had to stretch out 40 miles to bracket the site with a similar quality home and not a ranch or commercial operation.

Lol......now the lender will try to use us as their construction monitor with 1004ds........and that'll be fine at $125 per inspection.

 

[sebridges]

Your appraisal problem is quite different than the OP problem...now that you gave the information of 30 acres, the acreage imo is the dominant feature of the property and the key to comps for it....bringing a farm house into C3 condition is not that costly or important ( imo) than the large multi acre site....just do the best you can to find houses on the most similar acreage you can, adjusting for condition or upgrades is usually fairly straight forward...can I assume if rural a number of properties might have barns or sheds? Whether this combined acreage is HBU as residential ( if you are doing it as a residential appraisal ) might be another issue ,needing its own thread if it is.

Land is pretty cheap around here and in this case, about $1,850/ac with 6-7 recent comp land sales of similar parcel size within a few miles of the subject. The buyer will have about $28k in the land and about $22k in an early 70s shell on land that happens to adjoin the buyer's parcel. Crazy enough, I had to stretch out 40 miles to bracket the site with a similar quality home and not a ranch or commercial operation.

Lol......now the lender will try to use us as their construction monitor with 1004ds........and that'll be fine at $125 per inspection.

My thoughts exactly. The lender is obviously a maroon.


View attachment 36785

 

[J Grant]

Land is pretty cheap around here and in this case, about $1,850/ac with 6-7 recent comp land sales of similar parcel size within a few miles of the subject. The buyer will have about $28k in the land and about $22k in an early 70s shell on land that happens to adjoin the buyer's parcel. Crazy enough, I had to stretch out 40 miles to bracket the site with a similar quality home and not a ranch or commercial operation.
.

Combined, it'll be a 30 acre parcel.
Not quite getting the math as the total site will be 30 acres , $1850 an acre $54,000....not sure what "22k in" for the shell means...that is what you think the house is worth as contributory value? I assume if they are purchasing there is one price for the total, the house and both parcels in a sales contract ?

.if you had to go 40 miles to bracket the site with a similar quality home because the properties around the subject are ranches or commercial operations, it might be possible the HBU of subject due to its acreage size is a ranch or commercial operation? Or maybe in your area there are other homes on such large parcels but if so why go out 40 miles to find one..

Prices sure are reasonable there !

 

[sebridges]

Combined, it'll be a 30 acre parcel.
Not quite getting the math as the total site will be 30 acres , $1850 an acre $54,000....not sure what "22k in" for the shell means...that is what you think the house is worth as contributory value? I assume if they are purchasing there is one price for the total, the house and both parcels in a sales contract ?

.if you had to go 40 miles to bracket the site with a similar quality home because the properties around the subject are ranches or commercial operations, it might be possible the HBU of subject due to its acreage size is a ranch or commercial operation? Or maybe in your area there are other homes on such large parcels but if so why go out 40 miles to find one..

Prices sure are reasonable there !

He is buying 15 acres with the shell (slab and studs) for $50k. The lender is requiring him to throw in his adjoining parcel as the "down payment", and then loaning additional funds to complete the house. The bank will have their hook into the entire 30 acres if something doesn't work out.

The properties around the subject aren't necessarily ranches or commercial operations, but the sales in the 5-10 mile radius with that many acres tend to be ranches and commercial operations. Your typical SFR rural comp around here would be on 1-10 acres. Even if a seller had more land, he/she would break off the 10 acres around the house for the sell.

Lol.......it's 20 miles from the subject just to get to a town of 2,500......and then one more town of 2,500 further away to the comp. I feel much more comfortable doing it the way I did rather than trying to make $200k-$300k downward adjustments with a closer comp to bracketing purposes.

 

[J Grant]

Thanks for the explanation..its your area, a challenging assignment, good learning experience as you will find the knowledge we gain from each assignment builds toward the next. As I thought might be the case, you note the properties that have similar acreage to your subject 's combined 30 acres tend to be ranches or commercial in immediate area. Which goes back to HBU...as appraisal problems always do.....

The properties around the subject aren't necessarily ranches or commercial operations, but the sales in the 5-10 mile radius with that many acres tend to be ranches and commercial operations. Your typical SFR rural comp around here would be on 1-10 acres. Even if a seller had more land, he/she would break off the 10 acres around the house for the sell.