The Deal: New Construction In Livingston, NJ
Today’s deal comes from Zak Blechman, who closed this hard money new construction loan in Livingston, NJ. The total loan amount came to $575,000 and was funded at 80% LTC. Construction costs are budgeted at $420,000 and the vacant lot was purchased for $299,000. The borrower’s exit strategy is to sell the property with an estimated ARV of $961,000.
The property is set to be a 5-bedroom, 4.5-bathroom single-family detached measured at 3200 square feet. This semi-luxurious property will have quartz or porcelain tiling in the master bedroom, a finished bathroom in the basement and a half bathroom in the attic. The interior will utilize a white-grey color scheme and the exterior will have fencing from the road to the rear of the property for a total of approximately .4 acres. The plot of land requires excavation which will take most of the overall construction budget. Construction is set to take between 6 and 8 months, with the expected home sale to occur within 4-6 weeks of project completion.
Livingston is located in Essex County, an area that is experiencing similar housing market trends to the rest of the northeast with low inventory and rising average sale prices. According to Redfin, Livingston and the rest of Essex County has an average home sale price of $470,000 which is a 25% increase from the previous year. New construction builds are selling for an average of $275 per square foot, a nearly 19% increase from 2019. Homes are typically selling above initial asking price by 3%, giving the seller a leg up in the negotiation process. The number of homes that sold in the area for November 2020 were 670 and are remaining on market for an average of 66 days. As people continue to leave major cities and metro areas, suburban real estate markets like Essex County are seeing large increases that are expected to continue deep into 2021.
“We fielded around 8 deals together and spent months discussing the market changes throughout COVID’s uncertainty and the markets heating up,”
Zak understands the importance of building relationships with all borrowers or potential borrowers, doing his best to understand their needs to determine how ABL can help them. Even when one deal may not be the best fit for either party, he remains diligent in checking in on future deals instead of ignoring the prospect.
“We fielded around 8 deals together and spent months discussing the market changes throughout COVID’s uncertainty and the markets heating up,” said Zak. His level of dedication and relationship building helps him bring in new borrowers to experience the ABL difference. If you’re looking for hard money loans for new construction or fix and flips, contact Zak today.