Why Does an Owner Builder Need Construction Experience?
Hi there, and welcome back to the Owner Builder Loans, LLC blog! If you are just now joining us, we are currently in the middle of a short blog series designed to help potential investors better understand what an owner builder loan is and how they can utilize these loans as a form of investment. After the housing market collapse of 2008, the country learned first hand what happens when people are allowed to take out loans that they cannot afford to pay back. Since the collapse, lenders have been cautious to loan people money; however, the realm of owner builder construction loans has been less affected. These loans are only given to people who have the means and experience to construct their own home and, as a result, are much more secure than traditional home loans. In today’s post, we are going to go over some of the ways that an owner builder can obtain a loan even if they do not have construction experience. Keep reading below to learn more.
Construction Experience Conveys Security
For a person to obtain an owner builder loan, they must have some sort of construction experience. This is required by lenders to help weed out people who have no idea what it takes to oversee a large construction job which, in turn, greatly reduces the chances that the person will go over budget on their project or be unable to complete their construction in a timely manner. However, there are a couple of ways for an individual to obtain an owner builder loan without having personal construction experience. Below, we have listed the two options that are most commonly used.
- Construction Management Companies: Hiring a company that specializes in construction management is often the least costly way to circumvent the need for construction experience to obtain a loan. While they are the cheapest option, construction management companies also perform the least amount of work in relation to actual construction. This option is perfect for those individuals who plan to oversee the construction of their home themselves but require the assistance of someone with a certification in construction to obtain the actual loan.
- On-Site Project Managers: When a person decides to take on the role of an owner builder, they are basically filling the role of general contractor on the project. If a person has no experience in this role, an onsite-project manager may be the best option for them. Project managers take much of the responsibility off of the shoulders of the owner builder by directly managing the project during the day. The only downside to on-site project managers is the fact that they are rather expensive and, in some cases, can reduce the amount of equity that a person earns from their own home.
If you have anymore questions relating to owner builder loans or you would like to learn more about the investment opportunities that we offer with our loan programs, please visit our website today. We are a family run business dedicated to providing people with the capital they need to make their dream home a reality. Through our decades of experience, we have learned the tricks of the trade necessary to ensure that our loans are solid investments that provide an excellent rate of return.