The General Contractor’s Guide to Real Estate Investment

Every home you’ve built as a general contractor has increased someone else’s net worth. What if the next one increased yours? 

A general contractor’s construction experience is one of the biggest competitive advantages in the real estate world—and offers some of the strongest transferable skills when it comes to investing. Construction isn’t what holds most investors back; it’s often managing people, budgets, and timelines that investors struggle with. And yet, you’re already accomplishing these tasks each and every day.  

If you’ve ever considered investing yourself as a general contractor, Asset Based Lending can help you explore financing options designed for experienced builders like you. 

What does Hard Money Mean for General Contractors?

A hard money loan is a short-term, asset-based loan secured by real estate. Unlike a traditional mortgage, hard money loans are underwritten primarily on the value of the property and the strength of the investor’s project plan, not on the borrower’s W-2 income. Hard money loans typically close faster than conventional financing (often in 20 days or less) and are used by real estate investors for fix-and-flip projects, ground-up construction, bridge financing, and rental property acquisition.  

In recent years, hard money lenders have become a much more mainstream source of financing in the real estate world. Experienced and inexperienced investors alike are understanding the beneficial differences—whether it is speedy closings, flexibility, or inside knowledge—between hard money and conventional lenders that make hard money loans a better choice for their projects. And when it comes to general contractors in real estate investment, hard money can be the key to success.

Why General Contractors Make Great Investors:

1. You Already Know Construction: You understand permits, inspections, scheduling, and budgets. These are often the biggest learning curves for new investors.
   
2. You Already Have the Right Network: Contractors already know electricians, plumbers, suppliers, etc. That network becomes a competitive advantage when investing.

3. You Control the Outcome: Rather than relying on another contractor’s schedule, you’re the one making the decisions. More control means fewer delays, better quality, and faster execution. 

4. Better Margins: Instead of only earning construction income, investors can also benefit from appreciation, equity, refinance opportunities, rental cash flow, and resale profits. 

Let Your General Contractor Experience Work for You 

At Asset Based Lending, qualifying experience isn’t limited to previous investment properties. If you have completed qualifying residential construction projects, your experience may help strengthen your financing profile. That being said, ABL recognizes qualifying residential general contractor experience when reviewing certain projects. Projects that meet the following criteria will be considered during your application process:  

• Residential 1–4-unit projects   
• Completed within the last 36 months   
• Completed in less than 36 months   
• Certificate of Occupancy in the GC’s name   
• Satisfactory project completion   

If your name is listed on the permit, title doc, or deed of the home you worked on, you should be sure to mention this during your application process. And of course, have those documents on hand to provide to your loan officer as needed. 

Building Your Team & Getting the Funding You Need  

As a general contractor, you know that working with smart, reliable people ensures your job gets done right every time. The same goes for every project, whether you’re the general contractor or the investor. Whether you’re bringing in electricians, plumbers, or suppliers, you already have a network of professionals. And now you can turn to them for your own investment projects.  

When creating your team of professionals, it’s important to reach out to them early on in the process. Make sure to go over all of the details of your project, the expectations you have of them and their work, pricing, and overall timelines of when you plan to have things done. Remember that communication is always key. But whether or not you and your team are all on the same page can make or break your project.  

If you’re looking to strengthen your approval odds for a loan, consider having a guarantor co-sign your loan with you. A guarantor can be your partner, managing member, or a third-party with stronger assets, credit, and the ability to repay your loan should it end up default for one reason or another. When applying for the loan, the guarantor’s qualifications will be reviewed as well, which could strengthen your approval odds in the process. Should you have a guarantor sign on for your loan, it’s important that they are fully aware of the legal obligations that come with being a guarantor and have sufficient financial coverage to cover the cost of the loan as needed. 

Get Started on Your First Investment with Asset Based Lending 

Most hard money lenders won’t work with first timer investors because of the greater risk compared to lending to an experienced investor with a proven track record. However, Asset Based Lending understands that everyone starts somewhere, and that’s why we work with first-time real estate investors and experienced general contractors. 

If you’re ready to get started and become an investor and owning your worth, Asset Based Lending is ready. Whether you’re looking into New Construction or Fix & Flip, we offer loans designed to fit your project.  No matter where you are in your journey, ABL is here to turn your real estate investment dreams into reality.

Leave the financing to us, so you can focus on what you do best: creating homes and building success. You can click here to pre-qualify with Asset Based Lending now and get started on your investment journey.