In the last 2-3 years, the state of Texas has seen a significant rise in migration from other states in the country, which has increased the need for ground-up construction projects. Stephen King of Easy Street Capital, based in Austin, shares his insights about the increase in residential ground-up construction projects in Texas.
Private Lender Link:
What are some of the dynamics driving home building in Texas?
Stephen King:
In the past 2 to 3 years, there has been a huge migration to the state of Texas, which increased the need for residential new construction, as well as big companies making Texas as their headquarters, which has also been a huge dynamic piece for the development of ground up construction.
Private Lender Link:
Which parts of Texas are seeing the most residential construction activity?
Stephen King:
Houston, Dallas and Austin have seen the most influx in residential new construction, as well as cities near the coast like Galveston and Corpus Christi have also seen a huge influx in the last 2 to 3 years.
Private Lender Link:
What are some common trends with home building in Texas?
Stephen King:
The most common trend is HOA communities in the state of Texas. This has been a huge rise in the last 3 to 5 years. Anywhere from a couple hundred homes to a couple thousand homes being under one community, one HOA facility as well as in city infilled lots. Instead of doing a single family, most are converting into a duplex or quadplex. So they make the most of what the land has there.
Private Lender Link:
Tell us about your construction lending program in Texas.
Stephen King:
Our ground up construction at Easy Street includes being able to finance the total transaction up to 82.5% with still abiding at 65% of the after completion value. We have a 48 hour draw process and we only do vertical financing, meaning it has to be infill in a metro area, and all you need is one ground up construction completed in the last 2 to 3 years to qualify, as well as a 660 credit.
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