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Lender Recommendations for Construction Loan

emily12345

Does anyone have any recommendations for construction loan lenders? Would be nice if they were targeting more towards developers. Thanks!

 
Nov 17, 21 1:10 pm
Non Sequitur

Good call, I too make significant financial decisions based on answers I get from super generic forum posts.  

I recommend Northwest Lending Group in Astoria, Or.

Nov 17, 21 1:46 pm  · 
1  · 
trashbandicoot

​I always thought people likely taking out a couple million would have a team or at least one knowledgeable person dealing with this instead of asking online randomly. What if they found a loan shark? Or a volatile crypto-based loan?

Nov 17, 21 6:24 pm  · 
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emily12345

I am just doing research for my boss. He is looking to build ADUs as a developer for the first time and just wanted to see if anyone has had a good experience with any lenders

Nov 17, 21 7:32 pm  · 
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Non Sequitur

^your boss needs better staff.

Nov 17, 21 8:34 pm  · 
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Emily - if you're a developer and need to ask this question then you shouldn't be taking out a loan.  


My guess is you're either a scammer or someone looking to find an architect that will 'partner' with you and take care of financing.  

Nov 17, 21 6:39 pm  · 
1  · 
geezertect

No, actually they should be taking out loans so they can fuck up using somebody else's money, not their own. First law of real estate finance flim flammery.

Nov 17, 21 7:25 pm  · 
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emily12345

I am not a developer, I am doing research for my boss. He is looking to build ADUs as a developer for the first time

Nov 17, 21 7:33 pm  · 
1  · 

Why would your boss ask you to research this and you decide to do it online? Go to a local bank or have your boss speak with their finical advisor.

Again, if you and your 'boss' aren't intelligent enough to know where to start then you shouldn't be involved in this. 

Nov 17, 21 8:38 pm  · 
1  · 
Wood Guy

I don't get the ire toward this poster. Don't we all ask questions here that could be Googled? Don't most of us start with Google, get overwhelmed with responses and ask our trusted imaginary online friends for their input? That's been my approach for 25 years. But what do I know.

Nov 18, 21 3:51 pm  · 
1  · 
Non Sequitur

and my comment is back! Thanks big green head. 



Nov 17, 21 6:48 pm  · 
1  · 
bowling_ball

Methinks "Emily12345" will be back under a different (new to archinect) name to provide helpful suggestions. Pppfffftttt

Nov 17, 21 7:16 pm  · 
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emily12345

I'm 100% serious, this is literally research for my boss. Maybe I should have clarified that

Nov 17, 21 7:34 pm  · 
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curtkram

"HIMCO" is hartford investment management company. good luck.

Nov 17, 21 8:15 pm  · 
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Emily - maybe you should have take three minutes to google this. Or maybe you should have taken five minutes to create a real profile with a bit of credibility.

Nov 17, 21 8:41 pm  · 
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baboo.fei

AFAIK construction loans are typically provided by small(er), more local lenders since they need to inspect the project progress (obviously easier for a local lender familiar with the local building industry / construction scene) periodically to allow incremental draws. That might be where you’d want to start looking.


And not sure if you know this already but often construction lenders will want a guaranteed “take out” from your main mortgage lender so you will need to secure a senior loan first in those situations. 

Nov 18, 21 1:43 am  · 
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May I ask what experience you have in this area?

Nov 18, 21 11:05 am  · 
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baboo.fei

1. This is extremely basic information for developers and homebuilders. 

 2. Studying Arch/RED at an Ivy. 

 3. Saw large projects ($500m+) from land acquisition to sale from developer side.

Not sure why I'd need any "experience" to answer what I presume to be a common sense question, but maybe you have insights about the development / construction business that I don't understand. In such a case I'd be willing to learn what you are willing to teach :)

Nov 18, 21 12:09 pm  · 
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So you're saying this is something that could be learned through a few minutes of Googling?

Nov 18, 21 12:37 pm  · 
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baboo.fei

duplicated

Nov 18, 21 2:17 pm  · 
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baboo.fei

Actually, no. If you Google construction loan lenders you get barraged with ads and irrelevant information.
It’s often difficult for someone new to a field

Nov 18, 21 2:17 pm  · 
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I don't know, it took me three minutes to find information online about it. Just ignore the adds. 

Besides; you stated that this was extremely basic information and a common sense question that didn't require any experience to answer.

Nov 18, 21 2:45 pm  · 
1  · 
Non Sequitur

I've had to, on occasion, provide stamped letters to lenders in order for the client to release funds to the GC. The letter certifies the % completed and required coinage for each draw. It is certainly not a service we offer and I'm not even sure our insurance companies covers it in case we fuck up, but it's a thing. The interesting thing could apply to our own fees, so I have to sign a letter telling the client to ask their bank to pay us.  

Nov 18, 21 3:02 pm  · 
2  · 
baboo.fei

Your own fees are covered by construction loans too? That’s actually pretty interesting. From what I have learned typically soft costs including arch/engineering fees come mostly out of equity. In any case thanks for the
comment - great insights to hear.

Nov 18, 21 3:11 pm  · 
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In terms of fees being paid by loans - it's dependent on the project. For state and government projects here in the US soft costs are typically covered by budgeted cash in hand. For private projects we've had many clients use loans to pay for fees. These loans are secured by the estimated future equity of the project. A lot can vary depending on which state you're in, the type, and size of the project. It's all rather complex and I'm sure I'm oversimplifying things.

Nov 18, 21 3:32 pm  · 
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Appleseed

@NS, you're doing this for projects where you're not performing CA? What you're describing is just a standard G702 form, no? Progress approval is typ. coordinated w/ the Lender's appraisers, tho I find myself to be more stingy they they (usually).

Nov 18, 21 3:39 pm  · 
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Non Sequitur

^We very rarely do the certification letters... and I'm pretty sure we ceased all together a few years ago. Yes, typically consultant fees are not covered but in one particular case, the last one I wrote/reviewed, it was. We do CA on all our projects since it's mandated by the AHJ anyways. can't close the permit unless I sign off. hey-o!

Nov 18, 21 4:54 pm  · 
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Appleseed

I must be extra dense today - not seeing why the Lender would request a certification letter if you're doing CA as the AOR. Seems like everything would be baked into the monthly pay app. They ask for a detailed narrative or something?

Nov 18, 21 6:38 pm  · 
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I think the bank is just asking for a stamped letter stating that the work complete and the amount of fee the GC is asking for align. Sounds really similar to draw statement. I sign those all the time.

Nov 18, 21 6:47 pm  · 
2  · 
Appleseed

Yes, that's what a G702 is for. Typing up a certification letter seems a little onerous to me, hence the question...

Nov 18, 21 7:27 pm  · 
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Non Sequitur

G702, that's a USA freedom document? Yeah, no jurisdiction here. In my last case, the client's lender (a bank) insisted on a stamped letter. Also had a rather complicated spreadsheet too.

Nov 18, 21 9:24 pm  · 
1  · 
Appleseed

Standard AIA Application for Payment form, w/ everything you described. Makes the monthly GC's pay requests super simple / straight-forward, and required by our Contract Doc's.

Nov 19, 21 1:05 am  · 
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Appleseed

Guess I'm curious; if you/re not in the US, is it uncommon for the AOR to need to sign off on GC payments? Hard to imagine not having that balance-

Nov 19, 21 1:13 am  · 
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Non Sequitur

GC quotes and progress review letters are very common. Letters to the client’s lending company certifying (or guarantee) % completion is not.

Nov 19, 21 6:04 am  · 
1  · 

It's rather normal here in the US. As stated above it's basically just confirming that the GC's pay request is roughly correct. Nothing fancy - IE 20% of the steel is bought and installed - then 20% of the steel per the schedule of values can be billed.

Nov 19, 21 10:56 am  · 
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JLC-1

ahhhh the california adu boom is starting!

Nov 18, 21 12:01 pm  · 
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Naw. Too much NIMBYism for ADU's to gain traction. :(

Nov 18, 21 12:42 pm  · 
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JLC-1

until they see how much they can make out of the adu

Nov 18, 21 3:03 pm  · 
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The NIMBY's are the ones who don't have space for an ADU. I personally think ADU's are a great idea and can work really well.

Nov 18, 21 3:57 pm  · 
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proto

basement or garage, then?

Nov 18, 21 4:41 pm  · 
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Could work. Then again were would Americans store all their stuff without a garage and a basement?

Nov 18, 21 4:56 pm  · 
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baboo.fei

Duplicate

Nov 18, 21 2:25 pm  · 
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proto

How does one develop ADU's without control of the subject property?

Design/build package proposals for sale?

Nov 18, 21 3:42 pm  · 
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You don't.

Nov 19, 21 1:17 pm  · 
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