Development Loan Points on 2M+

[Austin V.]

I have a Multi-Unit Townhome project that was originally plated for 170 lots. Utilities are in, phase one of the roads, curbs, gutters and water retention has been completed as well.

I have received approval from the municipality to build the project as duplexes that will optimize cash flow and raise the number of finished units to approximately 300.

I owe 1.25M and need 1.05M to finish the roads, curbs, gutters, and water retention.

The first lien(1.25M) is overdue and was intended only as a bridge.

The finished value of the subdivision would be 3.4M -4.5M as finished lots, depending on the comparables the appraiser uses.

I have also found a lender that will lend to take the first out, but his points are high, it's not hard to get very expensive in points on a loan size like this.

I am outside the Phoenix and Tucson markets in a smaller but rapidly growing area. Given my area, it has been tricky to find someone that will both lend in this setting, especially in these amounts, for infrastructure, even with the equity intact.

Does anyone know of a someone who may be able to touch a project like this?

As an aside, I will need additional funding to build the project 100+- units at a time. It's funny, but I have quite a few lenders that will lend on that project :). In a perfect world, I would love to find a lender that can do both.

Thanks!

[Jared Rine]

@Austin V. Coming from a lender who places out of box deals, I'd take the expensive terms.  I know that you're going to be able to get the construction financing and the cost of money and length of outlay probably won't mean much even if you're paying 12-14% as @Jay Hinrichs pointed out.

Plus it's above most lenders comfortability on land even if you have the takeout. I just placed a first lien at way lower LTV on develop-able lots in my own backyard near Sacramento and it was 6pts/11%. Experienced and decent borrower too who actually got a CA bond to pay for the horizontal improvements. The money I got him was float money during the process.

If this was in a major metro in AZ, I'd say to PM me, but I'd go with who you've got or maybe contact American Life Financial (notsohardmoney.com) and see if they are a play.