Here is a recent new construction deal we closed in Miami, FL for six townhomes. Our borrower purchased the land for cash a few years back. They came to use looking for financing just as the plans were completed and the permits were just about to be issued. Our borrower on this deal was a repeat borrower with several other completed deals. When considering funding a ground-up deal, prior experience of the borrower is a must for us. These deals are complex, and the borrower has to know what they’re doing. When reviewing this deal we took the following into consideration: borrower experience, project location, scope of the construction including feasibility, valuation (current and completed) as well as borrower profitability. After reviewing everything, we were comfortable advancing the borrower $300,000 at closing with the remainder of the loan as a holdback for the entire construction. This gave the borrower a small cash out at closing to begin construction, but yet still left the borrower with significant cash in the deal. For a detailed analysis of this deal please check out our lending blog.
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