How to Apply for Construction Financing

A commercial building or home construction loan provides the capital needed to get a project moving quickly, where the work needed for developing the building is considered when determining the project’s ultimate value. Unlike traditional real estate financing, where the current value of the property is used to collateralize the necessary financing, construction loans are determined based on the projected cost of the project and the property’s potential value. 

The Benefits of Construction Financing From a Private Money Lender

Traditional bank financing of construction loans requires the borrower to have substantial assets and an excellent credit history, especially when used for anything beyond constructing your own residential, owner-occupied, single-family home. 

Hard money lenders understand the cash flow needs of both established contractors and new investors, and they are familiar with the unique financing needs of real estate investors, Realtors, and construction companies. Construction financing provides the steady cash flow needed for commercial construction projects such as industrial buildings, apartment complexes, and retail centers. With the right construction financing, investors have the ability to purchase, build, renovate, or add onto an existing building, having the money they need to move quickly, which is crucial for real estate investment opportunities. The money from a construction loan can be used for anything needed to finance the project, such as labor, materials, and equipment, as well as the purchase of the property. These hard money loans from private money lenders are typically either short-term construction financing or long-term, permanent construction financing. The loan can be tailored to your individual needs.  

Construction Loans From GenWealth Capital Commercial

At GenWealth Capital Commercial, we emphasize private money lending to provide hard money loans for our diverse client base. We lend nationwide, for large and mid-size construction projects, ranging from $500,000 up to $20,000,000. We can lend up to 65% loan-to-cost on development deals that include the land purchased. For pure construction deals, we can lend up to 85% loan-to-cost. 

Terms for our construction loans:

Loan Amount: $500,000 to $20,000,000

Lending Area: Nationwide

Property Type: Office buildings, retail spaces, residential lot development, mixed use and multifamily units, hotels, warehouse and self-storage units.

Loan to Cost:

-Land Purchase/Development: Up to 65% LTC

-Construction: Up to 85% LTC (ARV not to exceed 75%)

Loan Term: Up to 24 months

Unlike traditional banking, construction loans cover a wide range of projects, allowing you the flexibility of not just choosing the right project for your investment goals but potentially running multiple projects at the same time, all with advantageous lending terms. Whether you’re a Realtor developing a single lot in the ideal location or a large developer with a great new deal on a self-storage project in addition to an ongoing multifamily deal in a hot real estate market, construction financing offers the ability to maximize the profitability of almost any construction project.

Timing Is Essential in Real Estate Investing

Hard money loans are approved quickly, allowing investors to move quickly. With a commercial building or home construction loan, you can purchase or lease the land, equipment, and materials you need without waiting an extended period for financing approval. Speedy approval and funding, along with softer collateral requirements, come with shorter loan terms and higher interest rates. Hard money loans are usually available for up to 24 months at rates competitive to similar loans, but are usually higher than standard bank loans. 

Apply for a commercial building or home construction loan online or call the private money lenders at GenWealth Capital Commercial now at 469-476-7702.