Construction Loan Calculator

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Who Is This Construction Loan Calculator For?

This construction loan calculator is specifically designed for real estate investors looking to finance ground-up construction projects. Whether you are building single-family homes, multifamily units, or high-end Airbnb properties, this construction loan calculator outlines the total costs, cash liquidity requirements, and profitability of your proposed ground up construction investment project.

Note that this construction loan calculator was not created for retail borrowers looking to finance the construction of their personal dwellings. If you’re a real estate investor or developer, this construction loan calculator is for you.

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Rate And Fees Shown In The Construction Loan Calculator

The rates and fees displayed in this construction loan calculator are estimates based on typical terms for investment-purpose construction loans. Note that Ridge Street Capital is an investment property lender that finances GUC projects for investors. The figures used in this calculator are consistent with Ridge Street’s Terms. These include:

• Interest Rates: Interest rates range from 10.99% to 12.99% for construction loans depending on the lender.
• Origination Fees: Origination fees for construction loans are typically higher than standard fix and flip, DSCR, or conventional loans. Origination fees are in the range of 2%-3% depending on the lender.
• Inspection Fees: Borrowers can opt for in-person inspections or virtual construction draws. Draw/inspection fees are typically $200-$350 per draw.

For precise terms, we recommend reaching out to Ridge Street Capital for a customized quote.

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Loan To Value Shown In The Construction Loan Calculator

Loan-to-value (LTV) and Loan-To-Cost (LTC) are critical metrics for determining the loan amount of a construction loan. This limits the loan amount to the lower of 85% of the Project Cost and 70% of the after repair value:

• For a new builder with 1 completed GUC projects, real estate developers can access 85% of the total project costs with the total loan amount less than 70% of the After Repair Value.
• For an experienced builder with 3+ completed GUC projects, real estate developers can access 90% of the total project costs with a total loan amount of less than 75% of the After Repair Value.

Understanding LTV ratio offered by your lender ensures you can plan your equity contribution and manage risk effectively.

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Experience Requirement For An Investor GUC Loan

Ground-up construction loans for investors require at least 1 completed GUC project in your track record. While first-time investors can still qualify by partnering with another investor who has experience, lenders like Ridge Street Capital offer more favorable terms to experienced builders.

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Conventional V.S. Investment Purpose Construction Loans

Conventional loans are designed for primary residence projects and an are underwritten based on the borrowers personal income and debt-to-income ratio. Additionally, conventional construction loans offered by banks are typically required to be closed in the borrowers personal name. This can be an issue for investor who want to refinance their construction projects to with DSCR loans to hold them as rental properties. If you’re a personal borrower looking for construction loans on your primary residence, here are some personal construction loan options for you:{Insert Construction Loan Rate Comparison Embed}

In contrast, investment-purpose construction loans, such as those offered by Ridge Street Capital, are:

• Flexible: Higher LTVs and ability to finance multiple project simultaneously.
• Faster: Streamlined approval processes tailored to investors. Can close a construction loan in 7-10 days.
• Limit Liability: Construction loans are closed with an LLC as the borrower.
• Underwritten On Profitability: Personal income is not used in the evaluation of an investment property construction loan. All projects are evaluated based on projected profitability.

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Other Considerations When Using This Construction Loan Calculator

Every lender has a different set of requirements and risk tolerance for construction loans. This construction loan calculator was designed to be a helpful resource for real estate investors looking to assess what kind of construction loan options are available to them.

If you’d like to receive a construction loan for a development project your working on, based on the figures in this construction loan calculator. Please submit a Quick App and our team at Ridge Street will get back to you in short order.