The Deal: Land Purchase & New Construction in Summit, NJ
Today’s deal comes from Susan Botros, who closed this hard money new construction loan in Summit, New Jersey. The property was purchased for $940,000 with a construction budget of $888,950 and a total loan funded at 85% LTC. The borrower is a full-time builder & real estate investor that is a long-standing borrower of Asset Based Lending.
“The borrower knows what they’re getting with us- we’re going to close quickly and we’re going to make the process simple. They get to focus on their project, and we get to focus on the funding.”
During the pandemic they were using another hard money lender that dropped the ball on delivering funds. Since ABL never stopped lending throughout 2020 and offers rapid closing speed, the borrower was able to use our programs to continue financing their projects.
Since the borrower is an extremely experienced ABL borrower who has kept all previous loans in excellent standing, they were granted an extension from the typical 12-month loan to 18-month. “I love working with this borrower because they’re a total pro, always completing these beautiful on time and on budget,” said Susan. “Their record is impeccable, so we were happy to work with them on their extension request.”
As a savvy investor, this borrower often shops around rates for each deal despite using ABL as their main financing source. With our updated new construction loan program starting at 4.99%, the borrower knew our rates and our servicing were the best option for this project.
The land has existing property that will be demolished, and the new build will be a 6-bedroom, 5-bathroom single-family house measured at 4,600 square feet. This luxury house will be highlighted by 10-foot-high ceilings, white oak floors, custom moldings throughout, and more. Kitchen will feature white shaker cabinets, quartz countertops and backsplash, and high-end appliances. Baths will feature tile or porcelain tiles, frameless glass doors, and makeup counter in master bath. Construction is expected to take twelve months, with final sale occurring within three months after completion.
The estimated ARV came in much higher than expected- $500,000 more to be exact. The borrower is expecting to clear $1 million in profit when the project is completed and sold. Susan noted that ABL’s closing speed and servicing are the selling points for this borrower. “The borrower knows what they’re getting with us- we’re going to close quickly and we’re going to make the process simple. They get to focus on their project, and we get to focus on the funding.”
Susan covers the New Jersey and Connecticut markets along with her partner Zak Blechman. The duo loves to work with experienced real estate investors and builders to help expand their business and accelerate their growth. If you’re looking for hard money loans for fix and flips, new construction, or our interested in our term rental loans, then contact Susan today.