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New Construction Lending
In an ever-evolving market where lucrative opportunities are scarce, a growing number of investors are turning to new construction, often celebrated as the epitome of real estate investment. Engaging in new construction presents the unique chance to make an enduring impact on the home and community you're investing in. With the expert guidance of JK Creative Systems, we're happy to assist you in launching and expanding your upcoming venture
NEW CONSTRUCTION
New Construction Program Details
Interest Rate:
Rates Starting at 11.75%
How Interest is Charged:
Interest Charged As Drawn
Property Type:
Single Family and 2-4 Unit Multifamily
Build Type:
Stick or Modular Build
Project Description:
Land Development or Knockdown Reconstruction
Max LTC and ARLTV:
Up to 90% LTC and 70% ARLTV
Experience Requirements:
Strong Credit, Liquidity, and Experience
Loan Term:
12 - 18 Month Term Available
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 next use, and commercial multifamily. The loan term is generally 12 months with the opportunity to extend further.
2. What type of invest 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 properties 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, JK Creative Systems will always provide our best options to assist as your priorities shift.
3. Why choose New Construction?
a. 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 quote in and out UN quote. After starting construction and peeling back layer upon layer, you will 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 window as you have complete control over foundation, structure, layout, appliances, and everything else you wish to customize. The unknown is not a factor.
b. 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 utilize a large ROI (Return On Investment).
c. Increased Supply
in times of high real estate demand for investors and end buyers, finding properties is 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.
4. Do you upfront fund the construction budget?
We do NOT give construction funds up front. Depending on your relationship with your contractors we will reimburse completed work. As you complete work you can request a draw reimbursement and once we get the inspection back funds will be released.
5. Can you lend as a second lien position for seller financing?
Unfortunately, for all of our loans we must be in the first and only lien position. With a seller holdback we cannot lend unless we pay off the seller holdback lien and then we can refinance into a new loan where we are the sole and only lien holder.