RECENTLY FUNDED | $350K Construction Completion Bridge Loan with 2nd Lien | CT
LOAN CASE STUDY: Speritas Capital Partners arranges a second lien construction completion bridge loan that allows an experienced developer to complete construction on a luxury single family property in Fairfield County, CT.
THE SITUATION: An experienced CT real estate investor in was mid-project on a luxury single family home renovation in Fairfield County, but faced construction delays and cost overruns due to COVID.
In the face of this uncertainty, the bank lender was unlikely to increase the construction loan.
This investor had worked with Speritas Capital on other CT deals so they came to us for help.
Construction Completion Financing Challenges
Due to covid-19 time delays and increased costs, project costs were higher than anticipated, and exceeded the financing available from the senior bank lender.
Between a rock and a hard place: The borrower was reluctant to ask the bank for an increase because she was concerned that it would raise red flags and that the senior lender might not allow additional draws on the existing facility.
The possible lender pool for additional financing to complete the project was small, as most lenders will not consider lending when there are overruns and delays in a project.
Speritas Capital’s Role - Funding Solutions
Speritas Capital knew that it would be difficult to find another lender to help complete this project. Most commercial real estate lenders do not provide construction completion financing when the project has experienced delays and overruns, no matter what the circumstances.
Refinancing the entire bank loan with a cash-out option would have been expensive for a construction completion loan. So we recommended a second lien bridge loan.
Finding the Right Construction Completion Bridge Lender in CT
Speritas capital assessed the situation and determined that the second loan, combined with the first, would result in a relatively low (and affordable) combined loan-to-value ratio. This gave us confidence that we could find the right lender.
From our deep lender network, Speritas was able to bring a local alternative lender who would consider this specific type of scenario – an experienced investor and strong underlying market value.
This lender knew the Fairfield County CT market well and had provided other second-lien loans in CT.
Speritas Capital was able to arrange and close this construction completion bridge loan, secured by a second mortgage (second lien) on the property, in 10 days.
Questions about bridge loans or construction completion options? Call or text 203-247-4358 , send an email, or schedule a call now with Speritas Capital CEO, Jeff Bardos.
About this Construction Completion Bridge Loan
Loan Type: Construction Completion Bridge Loan, with a 2nd lien - Commercial Real Estate
Lender: Alternative Nonbank Lender
Loan Amount: $350K
Term: 12 months
Closed in 10 days
Rate: Custom/combined
“Thank you for arranging this financing Jeff! I didn’t realize I could access second lien financing for construction completion so quickly. You saved my project.”
Conclusion – Post Finance Update
Speed was of the essence for this CT real estate investor so that this luxury development project could keep to the construction timeline.
This construction completion bridge loan closed in 10 days, allowing the investor to access capital quickly, complete construction, and get on the spring market.
The newly completed home sold quickly within the expected range. Our investor quickly moved onto her next CT real estate development project.
Are you looking for a strategic partner to advise you on your next BRIDGE LOAN financing challenge?
The Speritas Capital team is always happy to hear your story, learn more about your financing needs and answer your questions. We bring our 30+ years of banking experience and our transparent, strategic approach to every client and every deal, both large and small.
And we never take up front fees.
CONTACT INFO
Jeffrey Bardos
CEO Speritas Capital Partners
Call/text Jeff at 203-247-4358
Email Jeff with your ABL financing questions
Schedule a call with Jeff using our online scheduling tool.
More about Jeff
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