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.