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$1.19M ground-up build in Denver, CO — 85% LTC, 14-day close

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

Land: $420,000
Construction budget: $980,000
As-complete value: $1,950,000
Loan: $1,190,000
Loan-to-cost: 85%
Rate: 9.00%
Points: 2
Term: 24 months, interest-only
Days to close: 14
Units: 2 units
Exit: Hold one side, sell one side

Rendering — the finished build, Denver, CO

THE STORY

Situation

An investor bought a lot zoned for two units and planned a side-by-side duplex: one side to sell, one side to keep as a rental.

Structure

The loan funded 85% of the $1.4M total cost at 9.00% with two points on a 24-month term, inside the 75% cap on the $1.95M as-complete value. It closed in 14 days.

In numbers: a $1,190,000 loan against $1,400,000 of total cost left $210,000 of borrower equity in the deal. The value test — 75% of the $1,950,000 as-complete value ($1,462,500) — sat above the loan, so cost, not value, set the size. Fully drawn, interest-only carry at 9.00% works out to about $8,925 a month, and 2 points of origination came to $23,800 at closing.

Draws

Phased draws — foundation, framing, rough-in, final — were released against photos and invoices.

The file

What was in the file: the land deed, the permitted plans for the side-by-side duplex, the GC’s itemised budget and schedule, the GC agreement, license and insurance, builder’s risk insurance, a rent estimate for the retained side, and the investor’s completed-project history. The appraisal valued each side as complete. Planning a split exit from the start mattered: the sale of one side paid the loan down, and the rent on the retained side carried the DSCR refinance on what remained. Six months of reserves covered carry through the sale and lease-up, and there was no prepayment penalty on the paydown.