Napa Valley, CA – New Construction Development – Lima One Capital

The Opportunity

A Bay Area builder with decades of history in the area had the rare opportunity to create a 5.8-acre infill development in Napa Valley, California. 

While Wine Country is a highly desirable area to live thanks to wineries, spas, hiking trails, and more, it has very limited new home inventory.

The builder typically constructs 20+ homes a year around the Bay Area, as well as some multifamily properties. With this proven track record of successful builds and strong knowledge of the local market, the builder knew that planning high-end homes in this Napa Valley locale was a rare opportunity for a wonderful investment.

The builder partnered with a respected development company to create a high-end home development with 15 lots. The builders architected and planned three different home layouts for the development, with purchase prices around $2.5 million. They vetted this proposed pricing with local real estate agents and comparable properties to validate that these homes would be desirable for homeowners in the market. 

With the builder’s vast experience, the partners were confident they could complete construction in 18-24 months, and that they could successfully estimate and control costs due to their strong knowledge of labor and material costs in the market.

The team went under contract to purchase the property in June 2025 at a cost of $10.75 million. Within three months, the property was fully ready to go vertical with entitlements in place and streets, utilities, building pads, and other neighborhood features built. As permits and zoning entered the final stages of approval, it was time to find financing. 

The builder had used Lima One Capital for financing of two single-family homes in Santa Rosa and included Lima One on the list of potential lenders for the $20+ million project. 

The Financing Solution

Based on the quality of the sponsors and the uniqueness of the opportunity, Lima One worked to partner with the development team by providing ground-up construction loan for the entire development. Lima One’s top originator, Josh Schwartz, had funded loans for the builders before and brought the opportunity to the team. 

Lima One’s strategic accounts team, construction management experts, and credit review committee thoroughly vetted the deal to ensure it was soundly underwritten. Lima One completed this process in three months, ensuring that the loan was ready to close as soon as the builders had all the approvals needed to put shovels in the ground.

As the builders looked for ground-up construction financing, one important factor was what they called a line of credit model, which would enable them to manage expenses based on market conditions, weather, and more. Lima One’s loan structure with no interest charged on undrawn construction funds gave the builders this flexibility to use their vast experience to manage operating capital during construction.

Lima One also offered the builders non-recourse financing, while building in interest reserves help the builders preserve operating capital as they got shovels in the ground. In the end, Lima One financed 60% of the lot purchase cost and 100% of the $17.25 million construction budget. The result was a $23.8 million loan, the biggest in Lima One’s history, closed in October 2025 at 85% blended LTC and 65% LTV based on a $36.9 million valuation on the completed project.