“Owner Builder Construction Financing Available Through Both Institutional and Private Mortgage lenders”

Owner builder construction financing is a very common type of construction mortgage that we provide to our customers.

In most cases, the customer already has the property secured as it can be difficult to try and arrange both property acquisition and construction financing into one financing facility due to the amount of time it takes to get everything completed.

That being said, bank or institutional construction loans for owner builders typically require the property to be free and clear of encumbrances so that a first mortgage position can be secured against the real estate, so a single mortgage to acquire the property and then construction the new building is not going to likely work anyway if you are considering working with a bank or institutional lender.

The real key to owner builder construction financing is making sure that you are focusing in on the lender source so that the needs of your project can be properly met.

In many cases, owner builder loans are provided by private mortgage lenders even though the cost of financing is going to be higher than a bank.

This is primarily due to the speed in getting a construction loan in place through a private lender and the predictability of the draw advance schedule which is going to be critical to making your cash flow work through out the project.

Yes, private money will cost more, but this is also a short term cost that will only last during the time of construction and typically will not have a material impact on your overall budget.

Lower cost owner builder construction mortgages will take longer to get into place, and you’re well advised to access to a cash or credit reserve if the draw advances are delayed or reduced for any reason during construction.

There can certainly be cost advantages to bank or institutional loans for owner build or self build construction, provided that you approach this type of financing in the proper manner and clearly understand how to manage it for best results during the entire time the funding is required.

The best way to determine which type and specific source of owner builder construction financing is best for the project you’re planning, or perhaps one that you are in the middle of, is to work directly with an experienced construction mortgage broker who not only has broad access to different types of construction financing sources, but also has the track record of placing and administering construction loans and mortgages for other owner builders.

Click Here To Speak Directly To Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Owner Builder Construction Financing Options

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“Retail Building Construction Loan Or Construction Mortgage Financing Available From Both Institutional And Private Mortgage Lenders”

Retail building construction loan financing can be placed through several of our lending partners, depending on the size, location, and borrower requirements.

When we are talking about construction of retail building, this could include plazas, strip malls, big box stores, mixed use properties, or stand alone retail outlets.

In the case of most retail building projects, there is going to be a defined exit strategy whereby after construction the property owner or developer will either be selling the property, occupying the property, or renting it out. For the last two possibilities, the property owner will be retaining the ownership of the property and will require a long term take out mortgage to repay the construction loan.

Having a well defined exit strategy prior to the start of construction is going to be most important to banks and institutional lenders and will be a requirement with many of them in order to entertain an application for retail building construction financing.

Private mortgage lenders that fund retail builds will still be interested in the exit strategy as it will identify how they will be paid out at the end of the project, but they may not require that a commitment to purchase the property or fund a take out mortgage need be in place prior to funding the construction loan advances.

Other than a well defined and established exit strategy, the lower cost bank financing will require an equity investment of the total project costs of 25% to 30% in most cases. Private lenders will require similar equity investments, but typically do not have as many other lending/funding criteria to meet as compared to a conventional lender.

So there is a cost/benefit trade off between bank versus private construction loans for retail projects.

With banks, the cost of financing is likely going to be lower, but the application process will also take more time and have more requirements. In addition, the draw advance agreement from a bank and result in draw reductions and delays as well, requiring the borrower to have another source of capital to draw on in the event of an advance issue.

Private lenders on the other hand are going to be more expensive for retail building construction loans, but they also tend to provide commitments to fund faster and the draw advance process is more predictable.

So there are pros and cons to each form of retail building construction loans and mortgages.

The key to construction financing success is having a good match between the borrower’s needs and what a chosen lender can deliver with respect to rates, loan costs, terms, and so on.

The best way to secure the right retail building construction financing for your project is to work directly with an experienced construction mortgage broker who can quickly assess your requirements and introduce you to relevant construction mortgage lenders that are capable of meeting your needs in the time you have to work with.

Click Here To Speak With Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Retail Building Construction Loan Options

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“Office Building Construction Loan Financing And Mortgage Financing”

Office building construction loans can be arranged for both small and large office building projects by lenders in our construction financing network.

The keys to financing any office building project are going to be the amount of time you have to work with, the amount of money or equity you are investing in the project, and the amount of space you have committed prior to building at market rents.

The more time you have to work with and the stronger your project is viewed in terms of location, design, and tenants, then the more likely you will be able to qualify for bank or institutional construction financing.

When there are some elements of an “A” credit lending package that are missing, then there is going to be the need to focus in on the next level of financing sources in the “B” credit or sub prime construction financing category.

While sub prime institutional lending will likely be slightly higher cost than a “A” credit bank or institutional lender, there can also be some advantages to this type of lender that should also be considered.

For instance, sub prime or quasi institutional lenders may be willing to consider a higher level of leverage than an “A” lender. Its not uncommon for banks to only finance 65% of hard costs. A sub prime lender may be able to finance up to 75% of hard and soft costs, depending on the strength of the overall project. Secondary lenders may also be open to considering a lower level of tenant commitment at the commencement of construction.

Once again, depending on the time you have to work with, and the factors related to any specific office building construction loan requirement, a private mortgage lender can also be a good choice.

Yes, rates are likely going to be a bit higher. But if you are working on a project that will be completed in less than one year, interest rate on advanced construction funds is less of a concern compared to a long term interest commitment.

The real advantages of private mortgage construction funding on office building projects is the speed in which financing can typically be put into place and the predictability of the draw advance schedule.

In some cases these two factors may cause a private mortgage to either be the preferred choice to the builder or developer, or the only choice.

The key here is to make sure that your project is lined up with the most relevant source of capital, which may not always be the lowest cost office building construction mortgage financing sources out there.

The best way to get an office building construction loan that is the best fit for your requirements is to work with an experienced construction mortgage broker who can help you navigate through the market and get you working with lenders that are most likely to be able to fund your deal in the time you have to work with.

Click Here To Speak Directly To Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Office Building Construction Financing Options

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“Construction Financing For A Professional Building Development In Toronto Or Southwestern Ontario”

Professional building construction financing is available through our lending network for a wide range of construction projects and financing amounts.

For this type of building project, lenders are interested in the location and design of the building as well as the post construction list of committed tenants and the marketing plan that will secure the vacant space by the time construction is completed.

Professional building construction mortgages can basically come from three different financing sources.

The first and lowest rate, lowest risk form of construction loans comes from banks and institutional lenders. Because of the lower risk financing position, considerably more time is going to need to be invested in the application and qualifying process as compared to the other categories of financing. Even after qualify for a bank construction loan for the a professional building project, the builder, developer, or property owner should be well versed in draw advance procedures of the lender which can be hard to satisfy at times and can require incremental sources of capital be brought into the project on short notice to keep the project on track.

The second category of professional building construction mortgages comes from quasi institutional sources such as investment funds, investment banks, hedge funds, and so on. This group of debt lenders are basically targeting construction projects that either do not quite satisfy the requirements of conventional lenders, or do not have the time available to complete a bank or institutional lender’s application process.

The rate will be slightly higher, but the process for qualifying for funding as well as the draw advance process will also likely be more straightforward. So with higher cost comes incremental benefits to this category of lending for professional building projects.

The third form of professional building construction loans is from private mortgage lenders. Projects under $3,000,000 can potentially be financed by one private lender or a small group of privates while the larger deals will typically be considered by mortgage investment funds or larger syndicates of private lenders.

Once again the cost of financing is going to be higher than what you would pay at a bank, but when time is short to get construction financing is place, this could very well be your best option. And, similar to the quasi institutional lending category mentioned above, the draw advance schedule tends to much more predictable with private mortgage construction financing.

If you are in need of construction financing for a professional building project you are are planning or are in the middle of, I suggest that you give me a call so we can do through your requirements together and discuss different professional building construction financing options available to you.

Click Here To Speak With Construction Mortgage Broker Joe Walsh

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“Student Resident Development Construction Loan Financing Available”

Student resident development construction financing is available through a number of lenders in our funding net work.

This can include financing for the purchase of land, site development and service installation, and the construction of building(s). During the project, we can also arrange construction bridge loans if cash flow requirements are higher than expected to complete the work, and at the end construction we can also arrange a long term take out mortgage if the property owner or developer is planning to retain the asset long term.

Funding options range from bank and institutional lender programs to sub prime and private lending alternatives.

For the lowest cost construction financing for the building of a student residence, there are a number of things to consider.

First, you are going to need to have 20% to 30% of the total project costs available in cash, and you’re going to have to invest your funds into the project before a lender will make their first advance.

Second, you are likely going to have to provide a first mortgage position to the construction financing lender on the property where the student residence is going to be built.

Third, you will have to have the property zoning and permitting in place for the project to move forward.

Fourth, the project will require a complete set of drawings and an as complete art rendering of the Student Residence once complete.

Fifth, the builder or developer will need to meet the qualifications of the lender including a resume of similarly completed projects. For smaller scale student resident developments, self builds can also be financed, provided that there is a building track record among the owners to support the completion of the proposed work.

Sixth, the project will require a detailed budget and cash flow timeline so that cost items can be agreed to and draw advance scheduled be prepared.

Seventh, there will need to be market research that shows the market demand for the project as well as a marketing plan to either sell or rent out the units. In either a sales or rental scenario, pre sales or rental commitments may also be required by the lender.

In the event that a project cannot qualify for bank or institutional student resident development financing, we also can pursue sub prime and private construction mortgage financing options on your behalf.

The cost of these options are going to be higher than a bank or institutional construction loan, but the lender conditions to approval and funding, as well as the timeline to complete the application and funding process can be considerably less than what you may experience with a conventional lender.

All student resident construction lenders are also going to want a clear idea of the exit plan to get them paid out. This is another area we can assist you with arranging either prior to construction or even during the construction process.

If you have a student resident development that you are planning and will require construction financing for, or if you are in the middle of construction of a student residence and require a construction bridge loan to complete the work, I suggest that you give me a call so we can quickly go through your requirements together and discuss student resident construction loan financing strategies available to you.

Click Here To Speak With Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Student Resident Development Construction Financing Options

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“Commercial Construction Loans For Different Phases Of Development”

Commercial construction loans are typically arranged for specific phases of a construction project.

For instance, its not uncommon that a separate loan is required for each of land acquisition, site development, and the actual building construction.

Each stage of the project will likely increase the value of the overall project, providing a basis for future financing events.

But the main reason for requiring multiple types of commercial construction loans relates to the financing risk associated with each event with also impacts the cost of construction related financing.

Another way of looking at this is that there is no guarantee that a construction project will advance from phase to phase on a timely basis, or at all. So for each financing event, there is typically a short timeline to completion and a completion of value added work or at least clarity as to the value of the project once borrowed funds are invested.

For the lender that is prepared to extend funding for the land purchase, the lender is making a borrowing decision based on the current market value of the land and if development work does not proceed immediately or at all, the borrower has a clear view of the resale market for that project.

Same line of thought applies to someone providing land servicing and site development financing. Not only are they well versed in the draw management requirements of this type of funding, but also all the regulatory requirements that need to be in place prior to any work being done. And once the borrowed funds have been invested in the project, the market value will have increased and provide a broader range of exit strategies to the lender. But at that point of completion, there is still no guarantee to a lender that the building phase will progress any time soon or at all, so once again, financing tends to be arranged on a phasing of the work basis.

This also allows lenders to be extended into a project for a shorter period of time, and even if a lender is prepared to fund multiple phases, its not uncommon that the construction mortgage gets rewritten to pay out the existing debt and provide for the work required in the next stage with rates and terms associated with the risk of the next step.

The key point here is that the coordination of commercial construction loans among different phases of a project can be considerable and difficult to manage.

As a result, you would be well advised to be working with an experienced construction mortgage broker to not only source the funds when required, but to also set up a fully integrated financing strategy for the whole project so the builder, developer, or property owner can seamlessly move from one phase to the next without financing delays.

A construction mortgage broker is also invaluable during the construction project with helping both sides complete the borrower and lender requirements as well as being involved in the facilitation of solutions to any problems that may occur with the financing arranged and the related cash flow management.

Click Here To Speak With Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Commercial Construction Loan Options

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“Commercial Construction Financing Available For Investment Properties And Owner Occupied Structures”

Commercial construction financing is typically arranged for a specific stage of a construction project.

For instance, most commercial projects have two or more stages of development and each can have their own financing requirement.

An example would be where the project first requires financing to acquire the land. Once proper zoning and permitting is in place, the project would move to site development and from there move into building construction. Once the project is completed, a take out mortgage would likely be required if the project was being retained by the owner, or by a purchaser wishing to acquire the completed project.

Each of these stages, mostly because of timing, will require their own unique commercial construction financing facility.

And while the same property is used to secure the different construction loans or construction related loans, each incremental financing requirement may end up repaying the previous one, or there may be more than one charge against the property, provided there is enough value in the real estate to carry additional debt.

As a project goes along, the value will increase, which provides more security for additional lending required at each successive project phase.

For each new commercial construction loan acquired, there may also need to be an equity injection required in order to keep the debt equity ratio in line for the lender or lenders.

Because of the multi phase aspect of most commercial projects, its important that all commercial construction financing facilities are aligned so there is a seamless transition from one to another during the project life.

The more the entire commercial construction financing is planned out in advance, the less headaches and cash flow issues for the project and project owners and managers.

Further, the commercial construction loan draw process tends to longer and more difficult to manage as compared to a residential home build, so its also important that each construction financing facility is well aligned with the project cash flow and timelines.

If you are in search commercial construction financing for a project you are planning out, or one that you are in the middle of, I suggest that you give me a call so we can go over your requirements together and discuss relevant commercial construction loan options that can meet your needs.

Click Here To Speak With Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Options

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“Retirement Home Construction Financing Loans And Mortgages”

Retirement home construction financing is available through our broad network of construction lending sources.

Construction loans for retirement homes can be for both new builds as well as renovations and additions.

Sources of financing for retirement home loans basically fall into three different categories.

We refer to the lower risk, lower rate category as banks and other name brand institutional lenders. The cost of financing will be the lowest from this group, but in turn the time to arrange financing can be considerable, depending on the project, and the lending/funding criteria is also harder to meet.

The second group is what we describe as quasi institutional where the source of money may be from an investment banking group, a hedge fund, or some other form of organized capital that does not have a branded presence. The funds from these sources tend to be slightly higher than banks and institutional lenders, but the higher rates tend to provide for higher risk as well which can make these sources a great alternative to the banks. This group of lenders also tends to move a lot faster in terms of the application process, but still will require full disclosure before committing to any funding opportunity.

The third group consists of private mortgage lenders that have a focus in construction financing. The private lenders that fund construction are in the very small minority of private mortgage providers in general. But even as a small number of lenders, they can still provide a considerable amount of capital for retirement home projects. And while private lenders will lend to be more expensive, there also tend to be much more streamlined in their lending/funding process and draw advance process. In addition, private lenders can be an excellent source of construction bridge financing if incremental capital is required before the project is completed.

The key in arranging retirement home construction financing is to align the financing requirement up with the right lending source so that their is no time or money wasted arranging funding, and so that all relevant timelines can be met.

The best approach to getting the right retirement home construction loan arranged is to work with an experienced construction mortgage broker who has access to these different groups of lenders and who can properly advise you as to where your needs will be best met.

If you are currently planning a retirement home project that will require construction financing, or if you are in the middle of a retirement home build that needs more capital, I suggest that you give me a call so we can quickly go over your requirements and provide discuss retirement home construction financing solutions that can meet your needs in the time you have to work with.

Click Here To Speak With Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Retirement Home Construction Financing Options

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“Construction Financing For Land Servicing Available For Toronto And Southern Ontario Projects”

Construction financing for land servicing requirements for a new subdivision or other project where the capital required will be used to install services such as water, power, communications, and sewer, are available from both our institutional and private mortgage lending base.

The most common request for land servicing financing is for services that are to be installed on the actual site where future building is expected.

That being said, there can also be construction financing requests to provide the necessary funding to bring services to the lot line, and to finance development bonds or letters of credit as well.

Most construction lenders are only interested in funding work that will incrementally increase the value of the property, so where there are off site financing requirements, there will need to be considerable equity in the property to support a non value added investment.

Because a construction development loan for land servicing is not typically an immediate income producing activity, its not uncommon that one of the developer’s funding requirements is that the loan include prepaid interest to service the debt until such time as there is a cash flow to make the required monthly debt servicing payments, or to retire the loan in full.

If there is no way for the developer to cash flow debt service during all or a portion of the loan period, then the financing facility is more of an equity based land mortgage, which may fall more towards quasi institutional and private mortgage lending solutions.

Bank and institutional lenders can still potentially provide equity based land servicing loans, but there will need to be a low loan to value requirement and very strong personal guarantees offered from the borrower or borrowers.

Outside of debt servicing, the two biggest considerations by the lender are market value and exit strategy.

With respect to market value, the lender is going to be interested in an appraiser’s opinion of value before and after the work is completed to the property as well as the geography in which the development is being completed.

In terms of exit strategy, there can be a number of different scenarios for repayment. Each potential scenario will have to be well documented and involve payment sources that are highly credible and verifiable.

If you’re in need of construction financing for land servicing, I suggest that you give me a call so we can discuss your project requirements together as well as go over potential construction financing options available to you.

Click Here To Speak With Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Construction Financing Requirements For Land Servicing

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“Subdivision Development Financing Starts With The Value Of The Real Estate”

Subdivision development financing is basically equity based mortgage financing up until the point where lot inventory starts being sold off on a semi regular basis.

Before that occurs, there tends to be no available cash flow to service any debt registered against the property, requiring debt service to either be built in at the start of a loan in the form of prepaid interest, or having the borrower retain a portion of the loan proceeds advanced to make scheduled loan payments.

Subdivision development financing can occur in a number of different stages, depending on the length of time it takes to obtain a final approved plan of subdivision, and on the increases in market value that occur at different stages of the pre planning process.

A common scenario would see the developer(s) acquire the land for cash or up to 50% of the purchase price to complete the initial round of financing.

Then, as time goes by and a draft plan approval, or its equivalent is obtained, the land is goes up in value. This is crystallized for lending purposed through a commercial appraisal from an AACI appraiser. The new value is then used to refinance the initial mortgage in order to provide incremental funds for the development process.

Once the project gets to plan approval, the market value will likely increase again, allowing for all or part of the equity required to secure a larger loan for land servicing and potentially building construction if a developer is retaining all the property for build out.

At this stage, the exit strategy for loan repayment from future sales is also going to be important as up to this point, the loan repayment strategy had basically been through refinancing over time.

Regardless of how many refinancing events take place, the subdivision development financing options available are going to be equity based, likely from private mortgage lenders, or quasi institutional lenders, who have a good working knowledge of the development process, and are prepared to step in an either complete the development or sell it off if the borrower is unable to either complete the project themselves, or does not meet the financial obligations of the construction loan financing facility.

If you require subdivision development financing for a project you’re planning or are in the middle of, I suggest that you give me a call so we can go through your financing requirements together and review relevant construction site development loan options.

Click Here To Speak With Construction Mortgage Broker Joe Walsh For A Free Assessment Of Your Subdivision Development Financing Options

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