modular home financing?

[Steve2278]

I'm a mason of 20 years who is looking to build my first modular home for investment purposes.
I have an option on a $20,000.00 conforming lot and have met with the local building inspector to discuss the town's requirements for modular construction. I plan to pay CASH for the lot, hoping that would be considered as part of my equity in the deal, and I plan to obtain the survey, the perc tests and soil logs for the septic system and all local and state approvals; the architectural plans (which is an additional fee charged by the modular company), a local building permit and I plan to erect the foundation myself.

After all said and done I will have approximately $43k in equity in the deal, and will be seeking 100% financing in the amount of a $100,000k loan to complete the project. The loan shall be used to pay-off the modular company once the modular is set upon the foundation, the remainder of the excavation, the well and septic installation, the punch-list work for the other tradesmen (electricians, plumers etc) and to construct the steps, patio, driveway etc., which I plan to do myself.

I received a Broker's Price Opinion of $250,000 based on the type of home and the type of lot, needless to say the deal has good potential.

My question is: Am I going about this the right way? Granted lender's always like to see substantial equity in a project, and I plan to use all my financial resources in one shot, and I am borrowing more than I need to facilitate timely completion of the project.
My concern is that a lender may not want to see me doing all the work, but would prefer I hire an outside contractor for the foundation and masonry work. And as I understand it, modular financing follows "construction financing" guidelines, which means that funds will only be available on a draw basis. And I don't want the modular company to delay the process once the home is set upon the foundation as it deems the remainder of the excavation, the well and septic installation and remaining masonry work as seperate/distinct stages of the project.
I don't know if I can finance the lot and home in one consolidated loan, or if I should try to retain more of my capital reserves by going about this differently? Any advice would be greatly appreciated.
Thanks,
Steve

[Gil Davis]

You will need an appraisal, a BPO will not do. You are talking about a construction loan, which will "roll" into a permanent loan. The problem you will have is the "investment" factor. Equity rules are higher for non-owner occupied.
Every construction loan that I have seen will require written contracts from tradesmen. That's what they finance.

[Steve2278]

Thanks for the advice Gil!

[rmurray]

You should talk to banks in your area...ask about builder construction loans that all developers use for spec homew..most do not use this much personal capital...They ususally pay interest only...some banks will require a licensed general contractor with a bond...