Best lender for building loan

[Rahul Garg]

Hello 

We own two lots from our own money in Miami.  Want to start building the houses now but looking to get a building loan rather than tie up our own money 

any suggestions on who is a good lender in the area for a building loan? 

Thanks in advance!

[Raymond J. Rodrigues]

@Rahul Garg how much are the homes going to cost for each build and are you expecting to sell them right away? What will they be worth? 

[Stuart Udis]

Contact the local community banks. They customarily will have a commercial/construction lending division. The pricing is usually WSJ + 1 point adjustable with a floor. It’s  generally regarded as the cheapest form of construction financing. Some hard money lenders may offer better leverage but the interest rate and origination fees will be higher.  Since you already own the land, you appear to be in good shape. However the lenders will want to see the permitting completed before they fund their loan. It’s also helpful to pay attention to the public records of similarly constructed housing in Miami. You can examine the recorded mortgages and this is a good way to see who is financing the local projects. I’m constantly taking inventory of the lenders financing ground up projects in my market which is Philadelphia. 

[Chris Seveney]

Quote from @Rahul Garg:

Hello 

We own two lots from our own money in Miami.  Want to start building the houses now but looking to get a building loan rather than tie up our own money 

any suggestions on who is a good lender in the area for a building loan? 

Thanks in advance!

 As mentioned contact a local lender. If you provided more info maybe someone could give you names but are you building micro units, $25M palaces? You also should list how much $ you are putting into the deal even with ownership of the lots as depending on that equity a lender will require you to start with your own funds. 

[Branden Rivero]

Hey I build down here, I can connect you with my guy dm me

[Robert Ellis]

Quote from @Rahul Garg:

Hello 

We own two lots from our own money in Miami.  Want to start building the houses now but looking to get a building loan rather than tie up our own money 

any suggestions on who is a good lender in the area for a building loan? 

Thanks in advance!

 Rahul, I have about 10 you can talk to. you'll also want to have an equity partner with new build experience so you can get the best terms. most of ours are national lenders. we doing joint parnterhsips for new builds and take a small interest in a single purpose entity for example:

Rahuls New Build LLC (95% owner)

Pink Development and Construction LLC (5% owner, no voting or distribution rights)

Take title to "Miami New Build Limited Partnership LLC" which is a single purpose entity.

Now the hard money lender is lending to a single purpose entity where one partner has experience in new builds and the other does not but it qualifies the entity. We have 5-6 of these going right now and I have found it to be the best. I'm in Brickell in Miami if you want to meet I'll send you a PM to discus further. The loan option is great, the lenders we talk to are lending up to 85% LTC and 75% after built value. 

In addition to the above you should study the new construction in your market. We like to build under the average and median. For example look at the zip code you are building in, for a recent new build in columbus that we do since miami is expensive we pulled all these stats: 

Zip Code Statistics: 43206

Housing Units Delivered: 8

Average Sale Price: 642,875

Median Sale Price: 505,000

Average Price Per Sq Ft: $316.40

Average Square Feet: 2172 Sq Ft

Average Bedrooms: 3.25

Average Bathrooms: 2.75

Average Days on Market: 138

We design the house around this, around the lot, around the neighborhood, from scratch and try to pick a long term build design that will do well. I like to build about to the average house or a little under it. We always build less square feet so we can capture the highest price per square foot. you can't control your market economics so building and designing and constructing around them is good. 200 sq ft less might be a huge pool or another amenity. I hope that helps!

[Johny Omaga]

Quote from @Rahul Garg:

Hello 

We own two lots from our own money in Miami.  Want to start building the houses now but looking to get a building loan rather than tie up our own money 

any suggestions on who is a good lender in the area for a building loan? 

Thanks in advance!

 Hi rahul i would be interested in funding your project if your land is already entitled. DM me the details. 

[Scott Wolf]

Quote from @Rahul Garg:

Hello 

We own two lots from our own money in Miami.  Want to start building the houses now but looking to get a building loan rather than tie up our own money 

any suggestions on who is a good lender in the area for a building loan? 

Thanks in advance!

 Hi Rahul,

I just began working for LendingOne out of Boca Raton.  Feel free to reach out about the project.

[Doug Smith]

We do tons of urban infill, ground-up spec construction, and residential development, but they key is having someone in the ownership group with a wee bit of experience. If you've not done it before, you'll want a partner that does or even have your GC as a partner until you get a couple under your belt. Other than that, we usually do 80%-85% of the cost (lot + soft costs + build cost) up to 70% of the As Completed Value. We'll usually go up to $5 million per unit and we can phase the development up to about $20M (sometimes more) at a time. Its actually a pretty straight forward process, but that experience is key. 

[Robert Ellis]

Quote from @Doug Smith:

We do tons of urban infill, ground-up spec construction, and residential development, but they key is having someone in the ownership group with a wee bit of experience. If you've not done it before, you'll want a partner that does or even have your GC as a partner until you get a couple under your belt. Other than that, we usually do 80%-85% of the cost (lot + soft costs + build cost) up to 70% of the As Completed Value. We'll usually go up to $5 million per unit and we can phase the development up to about $20M (sometimes more) at a time. Its actually a pretty straight forward process, but that experience is key. 

 5 million per unit? per development? do you do horizontal or vertical? mid rise or high rise? for sale or for lease? mixed use or apartments only would love to learn more sounds like a guy to talk to 

[Doug Smith]

The development loans usually max out at $3M per unit and $20M of exposure including the horizontal. $5M is usually single-shot new construction. We don't see many of those. 

[Anderson S.]

Quote from @Rahul Garg:

Hello 

We own two lots from our own money in Miami.  Want to start building the houses now but looking to get a building loan rather than tie up our own money 

any suggestions on who is a good lender in the area for a building loan? 

Thanks in advance!

We could help with this. Feel free to DM/Email me.

[Alacia Mahnken]

Quote from @Doug Smith:

The development loans usually max out at $3M per unit and $20M Dougexposure including the horizontal. $5M is usually single-shot new construction. We don't see many of those. 

 @Doug Smith I may need to pick your brain in the not too distant future. My hubby and I are trying to create a plan (and save) for commercial new construction investment here in Tampa. We are still uncertain on which asset class to choose. He owns his own commercial GC company here in Tampa and I’m a realtor. Trying to put our heads together to figure out the best path forward. We certainly have time, because we are far from having the capital it takes for such a project.