Funding advice for Apartment Complex

[Dustin McCluskey]

I purchased a single-family home on 2 acres about a year ago. I have since renovated the home, re-zoned the property to Medium Density Residential, rented the home and I am now in the public comment period on a partition to separate 1.86 acres of MDR from the single-family home. After that is complete I will get a partial lien release on the loan so I will have 1.86 acres of MDR free and clear.

I have a site plan which has undergone initial review and have made all necessary updates/ changes and it is ready for final submission, and I have a conforming design for 9 - 5 plexes, and roughly 75 parking spaces. The land is ideal for development, no wetland issues, and there is a straight pull through for emergency vehicle egress.

At this point I have a bit of a dead end, and I am trying to figure out how I can acquire funding. The entire site is 45 units and 58,600 square feet. It is an approximately $13M build. I believe it will value at $16-18M upon completion. In speaking to many local banks I am finding that based on debt service coverage ratios I am likely to receive around $9M in financing, and coming up with the rest of the capital is a challenge I haven't been able to overcome.

I have discussed phasing with the city to try and overcome the issues with capital, and it is possible for me to phase this project all the way down to 1 or 2 of these 5 plexes at a time, but will lose some of the construction economies of scale, complicate the site plan/ permitting, as well as make the financing a longer more drawn out and complex process. 

The issue I come across with hard money is that they don't want to lend over top of a bank loan.  I have looked into real estate syndication to some degree, but coming up with investors is a challenge.  Are there other ways of getting funding, or other lending sources that I should look into?

Thank you,

Dustin