New Construction Hard Money Loans
Create value by building on vacant land or tearing down an existing structure with our new construction program.
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New Construction Lending
As the market continuously shifts and good deals are few and far between, many investors turn to New Construction. Widely Considered by many to be the “pinnacle of real estate investing”, New Construction offers the opportunity to leave a lasting imprint on the home, neighborhood, and community that you are investing in. With Alpha Funding Capital’s guidance, we can help you start and scale your next project.
New Construction Program Details
Rates Starting at 7.99%
Strong Credit, Liquidity, and Experience
Single Family and 2-4 Unit Multifamily
Stick or Modular Build
Max Loan to Cost and Loan to ARV:
Up to 90% LTC and 70% ARLTV
12-18 Month Term Available
How Interest is Charged:
Interest Charged As Drawn
Land Development or Knockdown Deconstruction
Frequently Asked Questions
1. What is a New Construction Loan?
This loan provides investors with the resources necessary to acquire an existing property and funds to build an entirely new structure. This product can be utilized in a wide range of areas from deep urban to suburban, and provide a new way to approach your next successful investment. To obtain this loan investors typically require previous new construction experience, or a recent history of completed fix and flips. Property types range from single to four family on the residential side, commercial mixed-use, and commercial multifamily. The loan term is generally (12) months with the opportunity to extend further.
2. What type of investment strategy can be utilized with this product?
Like fix and flips, new construction offers the investor an excellent way to realize a great profit. Once work is completed, investors have the opportunity to either sell the property or refinance the property using the BRRRR Method. Depending on the timeline to build, the property’s ability to generate monthly cash flow, and the growth in the area of investment, selling and refinancing are both viable options. While it is best to approach a deal knowing your end goal and having a strategy for success in mind, AFC will always provide our best options to assist as your priorities shift.
3. Why choose New Construction?
i. The Unknown Elements
The first time you enter a home that is primed for a flip, you may walk out with a feeling that this project will be a simple “in and out”. After starting construction and peeling back layer upon layer, you find out that this is starting to seem like a bigger project than originally thought. When building new construction, those worries are thrown out the door as you have complete control over foundation, structure, layout, appliances, and anything else you wish to customize. The unknown is not a factor
ii. Maintenance Costs
For the investor that prefers to hold properties as rentals in their portfolio, maintenance can be a large factor in long term profitability. When holding a new construction property, investors can count on key elements including but not limited to the foundation, roof, flooring, and hot water heater to hold up over the initial span of ownership. This in turn limits monthly and annual expenses, helping you realize a larger ROI (return on investment).
iii. Increased Supply
In times of high real estate demand for investors and end buyers, finding properties are always a challenge. Utilizing this program, investors will be able to broaden their horizons. No longer limiting themselves to typical real estate listings, empty plots of land and homes that require demolition now add to the ever-growing list of opportunities.