Red Oak, Texas – New Construction

The Opportunity

A Texas builder working on the second phase of a 166-unit townhome development within the Dallas MSA in Red Oak, Texas, decided it wanted a new lending partner to empower its build-to-rent strategy. 

The construction company, which had completed more than 2,400 homes, was tired of the onerous draw process required by banks. So they decided to go to private lenders for a better financing experience. After vetting several national private lenders, the builders chose Lima One.

The Solution

Lima One provided a $12 million loan at 80% loan-to-cost leverage on 69 homes in the second phase of development. The interest-only loan with no interest charged on undrawn construction funds includes best-in-class pricing that gave the builders credit for their vast experience building townhome communities across Texas.

The 19-month term gives the builders flexibility to build in 20-unit mini-phases to maximize efficiency and cash flow. 

As they build, the construction company will benefit from Lima One’s seamless construction draw process, run by its in-house team. Because the construction budget and permits were reviewed before the loan closed, draws are issued in as little as one day based on completed invoices after an inspection verifies completed work. This straightforward draw process helps the builder keep contractors and sub-contractors happy while keeping projects running smoothly. The result will be a well-run project that leads to a profitable construction investment.