Getting new construction loans can seem like a monumental task to handle when it comes to all of the bank requirements, contractors and subcontractors, appraisals, inspections, and draw schedules. However, LP Capital Group is an expert at arranging financing for new construction projects, including ground up development of multi-family, office, retail, and condominiums, and more.
Understanding New Construction Loans
A new construction loan is a type of short-term loan designed to finance the construction of a brand new commercial real estate project. The builder often takes out a new construction loan to cover certain costs of the project before obtaining and committing to long-term funding. Compared to traditional mortgage loans, construction loans tend to come with higher interest rates. Once construction on a building is completed, the developer can get a new loan to pay off the construction loan. To gain approval to a loan like this, the loan applicant needs to provide the lender with a comprehensive list of construction details. Also known as a blue book, it is used to prove that you have a qualified builder involved in the project.
Why Should You Get New Construction Loans?
As mentioned, new construction loans are designed to help you bear the initial costs of your commercial real estate project. You will get the capital you need to kickstart your construction projects and buys you more time to gather the necessary funds to drive the project to its completion. Since it also transitions to a mortgage-like loan after the construction is finished, it will be beneficial for you if you do not have the capital in the necessary time frame, with the short-term loan, i.e. locking in the interest rate of the loan.
Another major benefit provided by this type of loan is the level of scrutiny it puts on your construction plan. Your company will receive a more straightforward answer from the contractors. This motivates builders to get the job done in budget and on time.
How LP Capital Group Can Help for New Construction Loans
- Rate lock options: Our new construction loan solutions allow you to lock in the interest rate on a mortgage at the prevailing market interest rate. This agreement will remain valid over a specified time period.
- Earn out features: Do you need more funds to facilitate renovations due to increased tenant occupancy? We can increase the loan amount at the advent of a certain event, without the usual costs associated with additional closing fees, attorney fees, etc.
- Hedging opportunities (in a rising rate environment): We want the best for our clients. That’s why if circumstances permit, you can reduce the interest expense on a particular loan. You can swap a higher fixed rate for a lower floating rate.
Why You Should Work with LP Capital Group for New Construction Loans
LP Capital Group is a trusted provider of commercial real estate financing solutions. When it comes to new construction loans, we engage in the process to fulfill your exclusive capital needs that are needed throughout the project. Our company can arrange construction financing with a focus on the exit strategy. You can rest assured that our loan programs provide convenient and flexible draw schedules, along with attractive interest rates. Since our inception, we have worked with a great array of real estate investors, owners, developers, etc., in both New Jersey and Pennsylvania.
If you are in urgent need for a new construction loan, do not hesitate to call us at (201)690-9260 today!