I'm in contract on a duplex that is zoned to allow about a 10 unit condo complex to be built on it. It is a good area for such development (in WA state) and I'm interested in tearing down the house to pursue this. I'm wondering how much down payment is typically needed for a construction loan for 10 unit condo complex about 5 stories high with underground parking.
There should be about 200k equity within say 6m in the land alone based on the down payment, appreciation, good price, etc. This is with the current home torn down.
The est total cost to construct is say 1,400,000. So, if a construction loan also covered the current loan it would be a total of about 1.8m loan.
I've heard 10% equity is sometimes suffcient to get such a loan, with equity in the land allowed to be used, so in this case I would hope to leverage the 200k equity in the land with no further cash out of pocket to do the loan.
The finished value should make it at least 65% LTV (value of 3m).
Thanks for any insights!