On behalf of a general contractor with minimal experience, we obtained a construction loan for him to build a spec home in Stuart, Florida.
Having recently purchased the vacant land, our client needed funds for the ground-up construction of a single-family residence. In only three weeks, we were able to close his loan with the following favorable terms, despite our client having minimal experience as a self general contractor (his main experience to date had been as a construction manager for the city):
- 85% loan-to-cost;
- Flexible draw schedule to meet our client’s timing requirements;
- Interest is only charged on draws (another lender would have charged interest from Day 1);
- Loan term of 9 months (7 months to build and obtain a certificate of occupancy, and 2 months to sell);
- Option to obtain 2 extensions (1 month each); and
- Minimal cash required to close (less than $4,000).
His exit strategy to repay the loan is to sell the property at the end of the nine-month term.
We plan to help him with other spec home projects in the near future, under the same loan program with the same lender. Because this lender specializes in providing capital for home building, their loan process is streamlined and fast.
Everyone has to start somewhere. Even if you haven’t done a ground-up construction project yet, there are still loan programs available to you. Read our blog article, “Construction Loans for First-Time Builders of Spec Homes” and also check out our detailed guide to residential construction loans.
To see if we can help you obtain a construction loan — whether to build a spec home to flip, or to build your own home of your dreams — contact us today.
