Inside Coastal Equity Group: Residential Construction Lending in the Southeast

In this episode of Private Lending Insights, I interviewed Robert “Alex” Baker and Kent Liggitt from Coastal Equity Group, a direct private lending firm based in Charleston, South Carolina. We discuss Coastal Equity’s rapid growth, closing over $200M in annual loan volume (mostly ground-up construction), trends they are seeing, capital markets, their lending guidelines, and the Southeast markets seeing the most development activity.

Interview Summary

Coastal Equity Group has grown rapidly since its founding in 2018. Alex Baker explains that the company started as a balance sheet lending platform and later expanded by bringing on capital partners and selling some of its paper on the secondary market. That capital access helped fuel significant growth, especially in 2022, 2023, and 2024. By the most recent year discussed in the episode, the company had closed more than $200 million in loan volume and had built out a more sophisticated operating structure with dedicated servicing, sales, marketing, underwriting, and processing functions.

Company Growth and Platform Evolution

The discussion makes clear that Coastal Equity Group is no longer operating like a small entrepreneurial lending shop where everyone wears multiple hats. Instead, it has evolved into a more structured lending platform with defined departments and a growing team.

• Founded in 2018 as a private lending fund focused on residential investment loans
• Scaled meaningfully after gaining access to secondary market execution
• Closed more than $200 million in annual loan volume
• Built internal departments for servicing, underwriting, processing, sales, marketing, and account management
• Maintains a high repeat-borrower retention rate and emphasizes relationship-based lending

Alex also shares that his own background as a borrower and investor strongly shaped the firm’s approach. Before becoming a lender, he was actively flipping homes and using private money himself. That experience gave him a firsthand understanding of what borrowers need from a lending partner, especially in terms of speed, responsiveness, transparency, and consistent communication.

Ground-Up Construction Has Become the Core Product

One of the biggest themes in the episode is the shift toward ground-up construction. While Coastal Equity Group still funds rehab and fix-and-flip loans, the majority of its current pipeline is now tied to new construction.

• Approximately 70% of the current pipeline is ground-up construction
• The remaining volume is largely traditional fix-and-flip or rehab financing
• Most construction projects are one-to-four unit residential deals
• The firm will occasionally finance small subdivisions, generally up to around 15 lots
• Large multifamily development is not the company’s main focus

Kent explains that many borrowers who originally came to Coastal Equity Group as flippers have gradually “graduated” into new construction. In some cases, they are shifting because teardown opportunities make more sense than rehabs. In other cases, they have found that costs and project management are more predictable when starting from the ground up.

The team also discusses how this trend is especially visible in markets like Charleston and parts of Florida, where older homes in desirable locations are frequently being purchased for teardown and replaced with significantly larger new homes.

A Notable Borrower Trend: Builders Moving Into Spec Development

Another major takeaway from the episode is that Coastal Equity Group is seeing more general contractors and custom home builders move into speculative development for their own account.

Instead of only building homes for clients on a fee basis, many of these builders are now deciding to take on projects as developers themselves. According to Kent and Alex, this trend is being driven by a few factors:

• Builders want more control over the project and timeline
• Many are tired of managing demanding custom-home clients
• They see stronger upside in spec development than in fee-based construction work
• They often already have relevant build experience even if they have not previously been the owner-developer

A key differentiator for Coastal Equity Group is that the company is willing to count qualifying general contractor experience when underwriting construction loans. If a borrower can document prior projects through certificates of occupancy and a verifiable construction track record, that experience may help them qualify even if they have not personally developed a similar project before.

Market Trends and Exit Strategy Shifts

The episode also highlights how market conditions have changed over the last few years, especially when it comes to borrower exits. During lower-rate periods, many investors could reliably complete a rehab or build and refinance into a DSCR rental loan. That is no longer as easy in many markets.

According to the Coastal Equity team, today’s environment has changed because:

• Rates are higher than they were during the refinance-heavy years
• Insurance costs, especially in coastal areas, have increased materially
• DSCR exit strategies are harder to make work at certain price points
• Many projects are now more likely to exit through sale rather than refinance

For rehab loans, the team estimates that roughly 70% of borrowers are selling rather than refinancing into long-term rentals. For new construction, the percentage of build-to-sell borrowers is even higher, with the team estimating something closer to 80% exiting via sale.

That shift is especially true for higher-end homes, where DSCR financing may be possible in theory but often does not pencil well in practice.

Loan Guidelines for Rehab and Fix-and-Flip Loans

The conversation includes a detailed review of the firm’s loan programs and underwriting guidelines. For rehab loans, Coastal Equity Group structures leverage and pricing based on borrower experience and project type.

• Minimum loan amount: $250,000
• Maximum loan amount: $5 million
• For light renovations, leverage can go as high as 95% loan-to-cost for top-tier borrowers
• For heavy rehabs, leverage is generally lower and capped around 85% to 90% loan-to-cost depending on experience
• ARV caps typically range from 70% to 75% depending on the borrower and project
• Interest rates are generally in the low-to-mid 9% range
• Origination fees typically start around 1.75 points for experienced borrowers and 2 points for less experienced borrowers

The team notes that pricing has become much simpler over time, with less variation from borrower to borrower than in earlier periods. They have also introduced a structure where repeat clients can receive lower origination fees as they complete more loans with the platform.

Loan Guidelines for Ground-Up Construction

Ground-up construction is where Coastal Equity Group says it has become particularly strong. The company offers leverage that it believes is highly competitive, but it also adjusts terms based on borrower experience, permits, land position, and project complexity.

• Land acquisition can be financed if it is part of a construction loan
• Up to 60% of land acquisition may be funded before permits are in hand
• Up to 70% loan-to-value on land may be available if permits are in place at closing
• Total project leverage can go up to 85% loan-to-cost for middle-tier borrowers
• Total project leverage can go up to 90% loan-to-cost for top-tier borrowers
• Construction loan terms are commonly written for 12 to 18 months, with many recent loans around 15 months
• The largest projects are typically one-to-four unit builds, not large multifamily developments

The team also explains that if a borrower already owns the lot outright and has meaningful equity in the land, that can satisfy some or all of the required cash contribution. In those cases, the borrower may be able to close the construction loan with little to no new cash coming in, depending on the numbers.

Borrower Requirements: Experience, Credit, and Liquidity

Experience is a major component of underwriting, especially for construction loans.

• Construction borrowers generally need at least 3 on-title completed projects or 5 completed projects for clients if using builder experience
• Top-tier construction borrowers generally need around 10 completed projects
• Rehab borrowers can qualify with no prior experience, though leverage is lower
• Minimum FICO is generally 680 for rehab and 700 for ground-up construction

Liquidity is also a key part of the approval process. Coastal Equity Group generally looks for:

• Cash to close
• Six months of payment reserves
• Roughly 10% of the construction budget or project budget in additional liquidity

The firm will count bank accounts directly and may give partial credit to brokerage accounts, retirement accounts, or other qualifying liquid assets, often using a haircut for conservatism.

Why Local Market Knowledge Matters

Both Alex and Kent emphasize that local knowledge is one of the company’s biggest advantages. They believe it is easier to underwrite effectively when you understand not only the city, but the submarket, block, and neighborhood-level dynamics.

That matters for several reasons:

• Valuations can vary sharply even one street over
• Permitting and entitlement timelines differ dramatically from one municipality to another
• Insurance pressure is especially relevant in coastal markets
• Some submarkets are oversupplied while others remain highly liquid
• The best opportunities may come from understanding local migration and employer trends

They also point out that it is easier to stay disciplined when lending in markets they know deeply, rather than trying to force expansion into unfamiliar geographies simply for the sake of growth.

Regional Market Insights Across the Southeast

A large section of the episode is devoted to discussing the markets where Coastal Equity Group is most active.

South Carolina

South Carolina remains the company’s strongest market, with Charleston serving as the core hub. The firm is also active in Columbia, Greenville, Myrtle Beach, Hilton Head, Beaufort, and other parts of the state.

The team sees several major drivers behind South Carolina’s strength:

• Strong domestic migration into the state
• Significant job growth and employer expansion
• New housing demand across both urban and suburban areas
• Strong demand from retirees and out-of-state buyers in coastal markets
• Development growth along major corridors such as I-26

Kent also mentions that Charleston’s new mayor has created a more development-friendly permitting environment, which may further support construction lending activity in the market.

Georgia

In Georgia, Coastal Equity Group has done business in Savannah, Augusta, Athens, and select submarkets around Atlanta. Savannah in particular is described as a market where neighborhood-level underwriting is extremely important because valuations can shift quickly from one area to another.

The company also sees appeal in college-driven markets such as Athens, where the University of Georgia supports both rental demand and ongoing investor activity.

Tennessee

Tennessee has been another active state, particularly in the Nashville area and surrounding suburbs. The team notes that while downtown Nashville may face some inventory and valuation concerns, suburban markets remain attractive, especially for new construction and spec homes.

They also cite growth and activity in Knoxville and Chattanooga, with Knoxville in particular standing out as a city seeing meaningful redevelopment and construction activity.

Florida

Florida remains one of the firm’s most important states, but also one of the most nuanced. Historically, Coastal Equity Group has done a large amount of business on the west coast of Florida, including the Tampa Bay area and further south toward Cape Coral.

However, the company has grown more cautious in certain west coast markets, especially where oversupply and insurance pressure have become bigger issues. Cape Coral and Lehigh Acres are specifically identified as markets where inventory built up significantly and where the team has become more selective.

At the same time, they are increasingly bullish on South Florida, particularly:

• Miami-Dade County
• Broward County
• Palm Beach County

The team describes the redevelopment activity in those markets as intense, with many older homes being torn down and replaced by new luxury construction in the $7 million to $12 million range.

Capital Markets and 2026 Outlook

On the capital side, Coastal Equity Group says liquidity remains strong. They are still seeing favorable capital availability, and they believe the leverage “box” has opened somewhat. At the same time, however, they caution that underwriting scrutiny has increased, particularly around valuation and borrower experience.

Their broad outlook for 2026 is constructive but disciplined. They are optimistic about continued opportunity in the Southeast, but they expect success to depend on:

• Conservative ARV assumptions
• Closer attention to borrower track record
• Better liquidity planning
• More selective underwriting in oversupplied submarkets
• Stronger focus on value support and realistic exits

The company also expects to grow meaningfully by expanding its sales coverage, including adding more “boots on the ground” in target markets such as North Carolina and South Florida.

Final Takeaways

Overall, this episode provides a strong look inside a fast-growing private lending platform that has chosen to specialize deeply in the Southeast rather than expand broadly across the country.

Some of the biggest takeaways include:

• Coastal Equity Group has grown from a small lending fund into a more structured operation closing over $200 million annually
• Ground-up construction now represents the majority of its pipeline
• The company is seeing many flippers transition into builders and many general contractors move into spec development
• Exit strategies have shifted more toward sale than refinance in today’s rate and insurance environment
• Local knowledge, customer service, and repeat-borrower relationships remain central to the company’s strategy
• The Southeast continues to offer significant opportunity, but market selection and disciplined underwriting matter more than ever

For builders, flippers, and investors operating in South Carolina, Georgia, Florida, Tennessee, and nearby markets, this episode offers a detailed look at what one active lender is seeing on the ground and how they are positioning their business for continued growth.

Visit Coastal Equity Group‘s profile, and contact them directly. They pay us a monthly subscription, so there is no cost to reach out to them through our platform.