Build to Rent Development – Kennewick, WA

The Opportunity

A Washington builder owned land in Kennewick, a city in the Tri-Cities region of the state. The land, located in a desirable location, was specifically developed as a road ending in a cul-de-sac.

The builder planned to build a townhome development, but needed the financing to bring his vision to life and achieve the profit potential the land offered. He had a relationship with a loan officer who had recently joined Lima One, so he reached out to see his options.

The Solution

Lima One has supported the builder’s vision for over three years through the full horizontal construction of 34 townhomes. This includes new construction loans totaling more than $5.8 million to build 24 units in multiple phases. Lima One’s loan officer also made a referral that allowed the builder to sell 10 units to another area builder. This allowed the developer to optimize his cash flow while retaining full confidence in the overall character of the neighborhood to support property values and rental occupancy.

As the builder completed townhomes, he used a variety of exit strategies, including property sales, refinances into DSCR loans, and bridge loans to allow time for lease up. Lima One has financed eight units through two DSCR loans and provided an interest-only bridge loan covering 16 completed units that had a certificate of occupancy. This $2.3 million bridge loan gives the builder time to lease up and maximize his build-to-rent strategy.

Lima One’s diverse product suite and commitment to partnership with investors have empowered this builder at every phase of this development, and the takeout financing provided now that construction is complete sets the builder up for cash flow and long-term success.