How do builders finance 20-40 unit buildings in North Jersey?
I’ve recently came across several properties with approvals to build a 10-40 units. I was just curious what are some of the options on how people fund these projects.
It just seems as a hard money loan wouldn’t be the most cost effective way to do this project. I have yet to speak to the smaller local banks to see if they will fund something like this.
It will likely be a community or regional relationship bank. They will look at your balance sheet financials and also your experience at developing these type of projects. If you don't have it then you will need partners who do.
Generally, this would be commercial loan. Anything usually above 4 units is considered commercial. Are these units in one location or different locations, for which a portfolio loan would work better?
I am a mortgage broker part of a mortgage brokerage with 200+ lenders we partner with. Unlike working with a single bank, I would be happy to shop with multiple of our commercial lenders for their financing bids on the properties you are interested in, to find you the best deal.
Call or dm me if interested. I would be happy to assist you if you decide to proceed
Quote from @Dennis Muno:
Generally, this would be commercial loan. Anything usually above 4 units is considered commercial. Are these units in one location or different locations, for which a portfolio loan would work better?
I am a mortgage broker part of a mortgage brokerage with 200+ lenders we partner with. Unlike working with a single bank, I would be happy to shop with multiple of our commercial lenders for their financing bids on the properties you are interested in, to find you the best deal.
Call or dm me if interested. I would be happy to assist you if you decide to proceed
Do you offer construction funding?
Hey Andres (funny we have a client with the same full name in Orlando :) ). Bigger Pockets has a list of lenders active in NJ that you could check out. If you see a project you can also look up in public records who the lender is to reverse engineer it. I do similar loans but not often in the North East. Most hard money lenders charge interest only on the drawn funds, so it's often not a bad way to finance larger new construction projects. Definitely worth checking local commercial banks if you see that they are active. Builder Finance and CoreVest are active as direct lenders for similar projects.
No Hard Money Lender would even consider a loan on such a project UNLESS your experience was through the roof and you had two other like projects under your belt.
Now, the workaround is to add a builder to the operating agreement of the company applying for the loan and leverage their experience.
No lender would even think about backing this without the proper experience attached.
-
Lender
- 267-251-7649
- [email protected]
#3 Managing Your Property Contributor
- Real Estate Broker
- New Brunswick, NJ
- 2,039
- Votes |
- 1,629
- Posts
#3 Managing Your Property Contributor
- Real Estate Broker
- New Brunswick, NJ
It's funny because I am running into a similar problem on a project I have in Central New Jersey. 8 units with commercial on the ground floor. A lot of banks don't want to do business right now. It was murder getting a refi on a 2 family new construction I built in April. I am looking for local banks, mortgage brokers etc to try to get financing for my project. I'm ready to start but a lot of banks don't want to play ball right now and are also getting swallowed up.
@Peter Tverdov I may have a bank/broker for you. I'll shoot you a text
Quote from @Peter Tverdov:
It's funny because I am running into a similar problem on a project I have in Central New Jersey. 8 units with commercial on the ground floor. A lot of banks don't want to do business right now. It was murder getting a refi on a 2 family new construction I built in April. I am looking for local banks, mortgage brokers etc to try to get financing for my project. I'm ready to start but a lot of banks don't want to play ball right now and are also getting swallowed up.
Hey Peter, I may have a lender that can help you with that type of financing depending on what you need. Let’s connect