Private Construction Loan for 2 Spec Homes in Lake Oswego, Oregon

Lima One Capital, a lender for residential real estate investors, funded a $2,860,000 1st lien position ground-up construction loan for 2 spec homes in Lake Oswego, Oregon, a suburb of Portland. We funded 100% of the $1,670,000 construction budget and 65% of the $1,800,000 purchase price, while the Borrower contributed 35% cash to the purchase at closing. The completed value was estimated at $4,400,000 so our loan-to-completed value was 65%. The Borrower was an experienced builder. The initial financing that they had fell out, leaving them with less than 4 weeks left on their contract to purchase the land. If they couldn’t find a lender to close the deal before that time expired, the builder would lose significant earnest money. So they looked for another lender who could save the deal while offering strong leverage. The Builder decided to do their first loan with Lima One. We were able to facilitate 2 appraisals on a tight timeline and close the loan before the land purchase contract expired. Plus, the builder got 82.5% blended loan-to-cost and 65% loan-to-value leverage, providing the cash needed to keep the deal running. The builder was impressed by Lima One’s team and process and has continued to do more business with us because of the outstanding customer service. The Borrower plans to sell the property upon completion of the vertical construction. The loan term was set at 13 months. This private construction loan was funded in October 2022.