To Summarize: How we Build with 0$ Down

Updated: Oct 22, 2020

I'm hoping this article will serve as a quick reference to answer some of the most frequently asked questions I get.


  1. What you first need to know: I want to start off by saying that new builds need the right market, that you can also achieve this with private lending and that it definitely helps if you can gather some construction experience first. Here's a link to another article I wrote a couple months ago with more details about that: https://www.thenewbuildcouple.com/post/build-hold-strategy-1

  2. If you've been following us for a while you know that: our method for building with 0$ started with a loan called an Auto-Construction loan from a local credit union. (This is in Canada by the way, apparently the states have a similar loan called "Construction to Permanent" but I don't know anything about that one so you'll have to do your research). What this Canadian loan means is that when you build a house for yourself, it let's you replace your down payment with your sweat equity. (Note: Not all banks offer this and if they do they don't all do it the same way) Here's a quick example of how we did it: You design your house and bring the bank the blue prints to have them evaluate it, they tell you the house is worth 100,000$ (for easy math). That means that they will lend you 80% of that value (80,000$) in progressive draws and it's up to you to build it for that amount. Which means you'll need to get in there and do a lot of the work yourself to save some money. When we built our first house, we kept our finishes to the cheapest we could get our hands on, got help from family and friends and did a lot of the trade work ourselves. I dive into deeper details in this article: https://www.thenewbuildcouple.com/post/property2

  3. Now that we are building secondary residences (AKA investment properties): the loan process is a little different. The bank now needs to make sure we have the 20% down available in some form, either from a line of credit, a private lender or cash in our accounts and we need to show the bank that we've spent that money before requesting for their first draw. HOWEVER, the fun part is that we spend that money for just a short amount of time because when you get that first draw you can pay back that money and by the time you've finished building (if you're in the right market and if you were able to build conservatively) the bank's loan should cover everything and MORE (by "more" we mean we can usually pull out a good salary for Rob....and sometimes for myself too).

Hope this helped! Cheers friends.


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