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Lubbock, TX – DSCR Financing for Build-to-Rent Portfolio

Lima One introduced a Texas builder to private lending with $4 million in DSCR financing for a build-to-rent portfolio in Lubbock.

By the Numbers:

$4,173,030

Loan Amount

$5,970,000

Appraised Value

69.9%

Loan-to-Value Leverage

19

Build-to-Rent Homes

The Opportunity

A Texas builder was looking to refinance newly built homes so he could hold them in a build-to-rent strategy. He traditionally used bank financing both for new construction loans and for takeout DSCR financing, but he ran into a funding cap and needed another option.

He had never worked with a private lender before, but he took a call from a Lima One representative to see what options he had.

The Solution

Lima One helped the builder avoid the bank’s caps with portfolio financing for 19 homes. The $4.173 million DSCR financing offered an interest rate even lower than the forward mortgage rate at the time, helping the investor maximize cash flow.

Lima One’s flexibility also enabled the investor to execute his preferred cash-flow strategy by paying off the construction financing without maximizing the loan-to-value leverage on the properties. At less than 70% LTV, the investor preserves equity in the $6 million portfolio of build-to-rent homes while ensuring monthly cash flow.

Through this experience, the builder has discovered the power of private lending for real estate investors and now has more options as he continues to scale.