HOME / GROUND-UP / RECENT LOANS / CHICAGO, IL

$1.45M ground-up build in Chicago, IL — 85% LTC, 13-day close

Illustrative case study modelled on typical files for this program; figures are examples, not a funded loan.

Land: $280,000
Construction budget: $1,420,000
As-complete value: $2,350,000
Loan: $1,445,000
Loan-to-cost: 85%
Rate: 9.00%
Points: 2
Term: 24 months, interest-only
Days to close: 13
Units: 4 units
Exit: DSCR refinance

Rendering — the finished build, Chicago, IL

THE STORY

Situation

An investor-builder planned a new four-unit rental building on a vacant city lot in a neighbourhood with strong rental demand, intending to hold it long term.

Structure

Four units sit at the top of the 1–4 unit program. The loan funded 85% of the $1.7M total cost at 9.00% with two points on a 24-month term, closing in 13 days.

In numbers: a $1,445,000 loan against $1,700,000 of total cost left $255,000 of borrower equity in the deal. The value test — 75% of the $2,350,000 as-complete value ($1,762,500) — sat above the loan, so cost, not value, set the size. Fully drawn, interest-only carry at 9.00% works out to about $10,838 a month, and 2 points of origination came to $28,900 at closing.

Draws

Phased draws — foundation, framing, rough-in, final — were documented with photos and invoices.

The file

What the file contained: the land deed, permitted plans for the four-unit building, the GC’s itemised budget, the GC agreement with license and insurance, builder’s risk coverage, and a rent survey for comparable new units nearby. The appraisal provided an as-complete value and market rent for each unit, which later supported the DSCR refinance. Because the plan was to hold, the desk reviewed the expected rents against the long-term financing from the start, so the construction loan and the refinance were sized as one plan rather than two separate decisions. The investor kept six months of reserves through lease-up.