In the early stages of putting a project together to build duplexes and triplexes to own and lease. The land we would build on has way more equity than the construction costs would be. Would it be possible to only put the land up as collateral for the construction loan? Anyone out there with any helpful info would be appreciated. I'm not familiar with that process at all...

Thanks!

Yes - that is how your construction loan will work.

Your equity will be determined by the bank's appraiser's report.

Maybe you'll need $0 to close the deal. Maybe you'll have to bring some to the table because the appraisal wasn't high enough.

Something doesn't sound right. It sounds like you have very expensive land that you are going to build duplexes on. Typically, you don't see a $300,000 lot that someone builds a $250,000 structure on. Make sure you you put the right structure on the right lot.

If you have lots of acreage and are building some rentals on it, be careful not to over collateralize your loan. In other words, if you have 10 acres at $1,000,000 and want to build 2-3 duplexes on 1 acre, you won't want to collateralize the whole 10 acres to do that. If you do, when you want to build 2-3 more, the land will already be collateral for another loan. Maybe your lender can re-work it, but I wouldn't count on it.

Seems like the land is owned outright so your first step would be to sit down with a regional banker of choice (not a big box bank) and let them know what you want to do and what the estimated costs are. That way the process commences. Depending on financial wherewithal and banking relationship, you should be allowed a line equal to 90% of total costs or 80% of value, whichever is less.

Agreed. Was going to say something like this regarding the land value versus the development that is built on the land...you want them to be commensurate with one another.

Yes, this is about the situation. I'd probably end up parceling off 2-3 acres to build the duplexes and just use that acreage as collateral. That sound about right? Ideally, I'd like to build 6-10, but only 1 or 2 at a time.

Be clear with the lender about your plan and timeline.

We have a few rent houses that we could probably get a few 100k of equity out of. Would it just be easier banking and from a transactional standpoint to use that money to build the first one and then use each new duplex built as collateral for the next one?

Sounds like you have some good holdings (with this piece of land and rentals). If building and renting duplexes, triplexes is viable on this land location then it could be worth considering into a full scale development of that product type. Instead of depleting the equity in the land and the rentals that you have, would it be worth selling those rentals and spinning that capital into the plex development?
Just thinking out loud, obviously we do not know the ins and outs of the situation, all the best!