If the existing home is over 50 years old you will need to get the historic commission to sign off on it prior to being able to tear it down. If they deem it historic and it is not in a historic district it you may have to wait 1 year to tear it down.
Does the zoning allow for a two family dwelliing??? Just because there is a 2 family there now, it may be a pre-existing non conforming use that may have to be brought up to todays conforming use.
Asbestos will have to be removed prior to tearing the home down by a licensed mitigator
1. Go to inspectional services at City Hall to confirm you can do as you want - questions would be zoning and FAR allow it
2. Check with and get forms from Historic commission & conservation if any is near or around it.
Tree ordinance will have to be adhered to also.
3. Price on asbestos removal - DONT just assume it is only on the exterior walls - boiler-boiler lining? Pipes? Window chaulking? Plaster? Vinyl flooring? Glue behind flooring? etc
4. Attorney - let me know I have some great ones that know Newton inside out.
5. Certified instrument survey will be required. You will also need to keep all drainage on site and need to show it on plans as well.
6. Building Plans - you will most likely need a architect even with store bought plans.
7. Are you going to over see it or have a contractor? Either way the bank is going to want to see breakdown of construction costs.
8. Bank go to Village Bank - they are a local bank that holds loans and knows the market. They will tell you immediately the likely hood of the financing of your project.
Good luck with your project.
Since you are tearing down the house, it must not have memories attached to it. What could you buy in Newton for the money you are talking about spending that is already done and without the headaches? S e r i o u s l y compare that with the time and effort that the project will take - not to mention the school of hard knocks that you will have to graduate from.
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The answer below outlines a good finance option however it appears the first thing you should do is sit down with a real estate agent to discuss value, an accountant to discuss your current financial position (and whether a project this big make sense for you short/long term) and a lender to talk about your financing options. You will need 2 different loans for each phase of the project.
Massachusetts Leading Buyer Brokerage
Unlike a builder, you are doing this on a shoestring budget, so getting the mortgage will not be easy.
With that said, the type of mortgage you are looking for is an FHA 203B loan, otherwise known as a rehab loan (link below). The purpose of this loan is to rehab a property though. Not sure they would lend on a tear town. So check on that first. You could go to masshousing.com to look for FHA lenders.
Do your research and think it through based on your goals. Good Luck!
First off can you justify a finished price of %1,250,000?
You forgot the cost of approval, development, design... which could run upwards of 70K
Can you qualify to carry a mortgage of the same?
Will the town allow you to do what you want to do?
Sit down with a local bank, before you do all of the leg work to see if it is even feasible to get financed for such. My guess is 10% down will not allow you to do what you want to do unless you have substantial incomes.
On financing, you will need a loan to buy and a loan to construct. If you have never owned an income property and had experience as a landlord, many lenders will shy away. If you've never build anything, many lenders will shy away. Interest rates can be pretty high on the construction loan as well.
Newton's a great place to build a future. I hope you can work it out. Need to find a creative lender or local bank to take a bit of a gamble and you'll have to turn them into believers first. Good luck.