Texas Construction Lenders for Residential Investment Property
Are you building a residential investment property in Texas? On this page you'll find a list of private construction lenders for ground-up projects throughout the Lone Star State. The maximum loan-to-completed value (LTCV) for most lenders in TX is 70%. You typically need to contribute 20%-25% of the project costs and have some cash reserves. Development experience is always required. Most lenders will require the project to be fully entitled and shovel ready. A small percentage of lenders will consider land acquisition and/or horizontal financing. The lenders listed here can fund a single home build, or a development with multiple homes. We have a separate page for lenders that offer ground-up construction financing for commercial properties.Texas is a large state, and many lenders only consider construction loans in particular metro areas. Select a region to filter the lender list:
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Malve Capital LLC
Fast And Easy Real Estate Loans. Closing as fast as 5 business days, subject to clear title.
RBI Private Lending
Direct lender, specialized in Bridge, Fix and Flip and Construction. FN and new investors welcome.
Texas Ground Up Construction Insights from a Local Lender
In the last 2-3 years, the state of Texas has seen a significant rise in migration from other states in the country, due to the rise in interest rates and inflation. Stephen King, an Account Executive at Easy Street Capital, states that this rise has “increased the need for residential new construction.” He also makes a point that not only are people moving their residents to Texas but large corporations are also starting to move their headquarters to Texas, adding to the increased need for ground up construction projects.
This increased migration has created a new trend in the HOA communities throughout Texas. Stephen says in the last 3-5 years investors have been purchasing large lots to build anywhere from a couple hundred homes to a couple thousand homes creating one HOA facility. He says, “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.”
Popular Markets for Texas Ground Up Construction Projects to Consider
According to Easy Street Capital, the cities that have seen the most influx in residential new construction in the last 2-3 years are Houston, Dallas and Austin. Stephen states that in addition to the larger metropolitan areas in Texas, they have also seen an increase in construction near the coastal areas such as Galveston and Corpus Christi.
Easy Street Capital is a private real estate lender headquartered in Austin, Texas serving real estate investors around the country. They offer financing for ground-up construction, fix and flip, and cash flow investment properties. For their ground up construction financing their max LTC is 82.5% with still abiding at 65% of the after completion value. They have a 48 hour draw process and only do vertical financing, meaning it has to be infield in a metro area and only require one ground-up construction project completed in the last 2 to 3 years to qualify. View their profile to find their contact information and learn more.
Funded Residential Construction Loans in Texas
i Fund Cities, an alternative lending platform built for investors, funded a $1,725,508 residential ground-up construction loan for 5 single-family homes in Leonard, Texas, a small rural town close to the DFW metro area.. The purchase price was $325,000 and the construction budget was $1,738,915. iFC funded 84% of the total project costs in 1st lien position, and the Borrower contributed 16%. The completed value was estimated to be $2,493,915 so the loan-to-completed value was 70%. We provided much higher leverage than local banks offered.
The Borrowers were experienced SFR developers who have established a strong reputation in their market, with proven success and a solid track record. They were looking to obtain optimal leverage in order to support five new construction projects while closing in an efficient manner. They had worked with banks before but found it more challenging to get “spec” home projects done with them. iFC and Jack Pagliarini, our totally on-it new Sales Rep in Dallas were quick to find a solution that met their needs, so we were able to get the process moving right away!
The key benefit to the borrower was that the developer was not only able to feel comfortable with the terms when the deal started, but they could also feel confident throughout the entire process that i Fund Cities would get their deal closed quickly. The loan term was set at 18 months, and the Borrowers planned to sell upon completion. This residential ground-up construction loan was funded in August 2022.
Private Construction Loan for DFW Builder Tired of Dealing with Unreliable Lenders in McKinney, TX
$1,080,000
I Fund Cities (iFC), a direct private lending firm, funded a ground-up construction loan for a single-family residence in McKinney, Texas, north of Dallas. The purchase price for the land was $399,900. The construction budget was $877,800. The estimated completed value was $1,440,000. So our total loan-to-cost was 85%, and the builder contributed 15% of the total costs. Our loan term was set at 18 months. The client has been building and renovating homes at an increasing pace. Their previous lenders either ran out of funding or were hesitant to fund their new construction projects. In one recent case, their lender even left them at the loan closing table! When they called us, they were looking for a lender who didn’t shy away from deals, and who could be reliable throughout the process. iFC looked at the project but, just as importantly, we listened to the borrowers to understand their specific personal and project needs. By doing this, we were able to discover a deal structure that leveraged the best characteristics of each guarantor, providing more favorable terms and a quicker route to closing.
This private construction loan was funded in June 2022.
Key Benefit for the Borrower:
This borrower gained from iFC’s ability to close on short notice when other lenders weren’t willing to follow through.
Customer Feedback:
What was the client’s experience in working with Jack and iFC? “Customer service. Hands down, unequivocally, customer service. Responsiveness, attentiveness to all of the needs, and full communication. No one can ever say i Fund Cities dropped the ball.” “With such a short timeline to close, if the borrower is not on it on their end, there was no way we could have gotten the deal done as fast as we did. It was pretty intense moving through the deal, but there was transparent, fast communication throughout the whole process.”
Lead Funding, a Colorado-based private lender, funded a $630,000 1st lien position fix and flip private money loan for a single-family home in Alamo Heights, north of San Antonio, TX. The Borrower was an experienced builder who had successfully completed a few other projects in the area and was seeking a new lending partner. The purchase price was $333,000. The Borrower put down $33,000 cash for the purchase, and we funded the remaining 90%. We also provided 100% of the construction budget, which is estimated at $330,000 and will be released in several draws. The existing structure will not be torn down, but the project entails a complete rebuild, plus a 2nd story and additional square footage on the ground floor. Approximately 2,000 square feet will be added to have 5 bedroom, 3.5 baths and a 2-car garage. Upon completion, the Borrower plans to sell the home for around $860,000. The loan term was set at 12 months. This SFR private money rehab loan was funded in July 2019.