Financing Options for Alternative Investments and ADUs (Video)

Alternative Investment Financing Options: Hector and Alfre delved into financing options for alternative investments like ads, construction loans, and investment loans. Alfre brought in his extensive experience, starting with conventional loans in 1987 and evolving to include commercial and hard money loans. They discussed the rising housing demand and government initiatives to increase housing units, such as loosening parking regulations for multifamily properties. Alfre highlighted the profitability of these loans, including the potential for rental income.

ADU Project Funding and Management: The conversation turned to the financing of Accessory Dwelling Units (ADUs). Alfre explained that lenders could cover up to 90% of the ADU cost, enabling homeowners to fund the rest and complete construction in 5-7 months. He also mentioned refinancing options and the concept of 'fund control' to ensure the proper use of the loan, with funds released to contractors based on a set schedule.

ADU Financing and Construction Process: They emphasized the importance of thorough planning and research before starting an ADU project. This includes understanding city regulations, acquiring necessary approvals, and being mindful of potential costs. Consulting with building officials and contractors was advised for better project understanding.

Loan Criteria and Alternative Financing for ADUs: Alfre detailed criteria for ADU project loans, like a minimum FICO score of 668, and discussed alternative financing for those not meeting this requirement. He noted that future rental income is considered for loan qualification, highlighting the high demand for rentals and the potential for increased property value.

Financing for Construction and Real Estate Projects: Discussing broader financing options, Alfre and Hector covered loans up to 85% of project costs, with the borrower contributing 15-20%. They touched on financing options for investment properties and commercial loans, with interest rates between 9% and 10.25%. Alfre mentioned 100% financing possibilities for certain projects.