My wife and I recently found out that the former house of a close family friend (foreclosure) just came WAY into our price range due to some issues that make it so a regular bank won't deal with it. Namely, the lack of a deeded right of way. The family friend still owns the land between the house and the road (they used their right of way to access the house, and the bank missed that the house was never deeded a ROW).
Being a foreclosure, the house does have some issues that need repair, but is worth FAR more than it would cost to bring it up to standard. We aren't looking to flip the house, but to raise a family in it (when one comes along). The problem is that we spent over 75% of our cash reserves this past spring on a piece of land we wanted to build on in the future, and even if we wanted we can't get the money out of that fast enough. Due to that, we don't have the money required to negotiate and purchase* the ROW prior/concurrently to getting a loan, put 10% or 20% down on a construction loan, AND keep 6 months of P&I payments in cash that the bank requires.
*I would not expect to be given the ROW
If we are able to manage to find a way to finance the whole deal with a construction loan, we'd STILL have to use a licensed GC (per the bank's requirements) to do all the work required to bring it up to speed. We won't be allowed to do most of the work ourselves which we are more than capable of. A good example is that all but the last 100' of the proposed ROW has been roughed in and just needs gravel. There's an excavator sitting 300' away that I would use to finish driveway yet a bank would require us to pay somebody else for the work.
My question is: Is there somewhere I can look for a non-conventional loan? Ideally a bank, or private investor willing to lay out the cash required for the project, (purchase of house, purchase of ROW, and improvements), and essentially split the difference between what it would have cost with traditional financing and what it DID cost with non-traditional financing upon refinance. In the interim, the lender would hold a mortgage on a property that upon deeding a ROW (step 1) is worth far more than the actual cash outlay for the project. Rough numbers look like the return on the money would be around 10% in a period of less than one year (may be significantly less than a year).
