Put a 12-month balloon on a construction loan and nearly got burned

I put a 12-month balloon on a construction loan for a flip in Austin and the project ran 3 months late. The extension fees cost me $4,200. Anyone else gotten squeezed by a short balloon term?

3 comments

3 Comments

wilson.sam21d ago

Yeah 12 months is tight especially when lumber takes forever.

grace_allen21d ago

The extra time the concrete took on my last job really opened my eyes to how long projects actually take. @wilson.sam I was one of those people who thought 12 months was plenty until I saw how many delays the lumber shipments caused on a friend's build. It took almost 14 months just to get the framing done. Now I plan for at least 18 months if I'm being realistic about material orders.

evan_wilson1813d ago

My buddy's place in Oregon took 16 months just to get dried-in because the local yard kept running out of 2x6s for the roof deck. The lumber yards were blaming it on the mills cutting back on certain sizes and nobody could get a straight answer on when they'd be back in stock. It's brutal watching a foundation sit there with nothing happening for weeks on end waiting on wood that just never shows up.