Capital Spotlight – Highlighting featured capital investors. We regularly publish the detailed criteria of our most unique real estate capital sources.
$2MM to $30MM | East Coast Focus, Including the Carolinas and Florida
Condo developers along the East Coast, and particularly in Florida and the Carolinas, continue to run into the same obstacle when financing ground-up projects. Most construction lenders treat the absence of pre-sales as a non-starter, which can stall an otherwise sound project or force the sponsor to carry an outsized equity check at closing. We recently expanded a relationship with a West Coast lender that has moved into the East Coast market and funds condo construction without a pre-sales requirement. Because all of its capital is held on balance sheet, the group can underwrite to the merits of the project and the experience of the sponsor rather than to a rigid credit box, and it can structure around the upfront-equity hurdle that typically slows these deals down.
The Capital’s Edge
Three features set this program apart from conventional construction debt:
- No pre-sales required. Construction can begin without pre-selling units, a structure most lenders treat as a non-starter, particularly in Florida.
- Equity that funds over time, not all at closing. For sponsors who can demonstrate the required liquidity, equity can fund alongside the lender’s construction draws rather than up front. The total commitment does not change, but the day-one check is smaller and the sponsor’s capital is outstanding for less time, improving time-weighted returns.
- Non-recourse construction available. Depending on leverage and sponsor strength, loans can be structured non-recourse, an uncommon option in ground-up construction where most lenders require full recourse for the life of the loan.
The lender’s objective is straightforward: identify well-conceived projects led by sponsors with relevant, demonstrable experience, then structure financing that works for both sides. Loans run from $2MM to $30MM at up to 75% loan-to-cost, with leverage capped at up to 70% loan-to-value on As-Complete value. The current mandate is focused on the East Coast, with particular attention to the Carolinas and Florida, across both primary and secondary markets.
Key Loan Terms (Indicative)
| Term | Details |
| Lien Position | Senior only; secondary financing prohibited |
| Deal Size | $2MM to $30MM |
| Leverage | Up to 75% LTC, capped at up to 70% LTV on As-Complete value |
| Rate | Fixed, 10.00% to 10.90%, interest-only |
| Term | 1 to 3 years, plus extensions |
| Origination Fees | 1.5% to 2.0% |
| Pre-Sales Requirement | None |
| Exit Fee | None |
| Prepayment Penalty / Min. Interest | None |
| Recourse | Non-recourse options available, depending on leverage and sponsor strength |
| Permitting / Entitlements | Full entitlements preferred but not required |
| Funding | Flexible. Traditional 100% construction holdbacks, or equity funded pari-passu with the lender’s draws to reduce the sponsor’s day-one contribution |
| Timing to Close | Typically 30 to 45 days from LOI acceptance and receipt of deposits |
Targeted Deal Types & Underwriting Criteria
| Criteria | Details |
| Asset Types | Condo construction, condo mid-construction, condo inventory, single-family construction, sub-divisions |
| Geography | East Coast primary and secondary markets, with current focus on the Carolinas and Florida |
| Sizing | Up to 75% LTC |
Common Scenarios
This program is best suited to an experienced sponsor who has identified a well-located project at a strong basis and needs to begin construction without the delay, or the upfront-equity hurdle, that conventional lenders often impose. Common use cases include:
No or limited pre-sales: A developer is ready to break ground on a project they believe in but is building in a market, often Florida, where pre-sales are difficult to secure or commercially unattractive before construction begins. Most lenders treat this as a non-starter. This capital source does not, allowing the sponsor to proceed on its own timeline and sell into completion.
Deferred equity to improve returns: A well-capitalized sponsor would rather not commit its full equity to a project on day one. Provided the sponsor can demonstrate the required liquidity, the lender can structure equity to fund alongside its construction draws rather than up front. The total equity commitment does not change, but the day-one check is smaller and the sponsor’s capital is outstanding for less time, which improves time-weighted returns and preserves equity for other deals.
Speed to close: A sponsor facing a seller deadline, a broken escrow, or a time-sensitive basis needs certainty of execution. Because the lender holds its capital on balance sheet, it can typically move in 30 to 45 days from LOI acceptance and receipt of deposits.
Next Steps
If you have a condo or for-sale construction project at a basis you believe in, and pre-sales, recourse, or the timing of your equity is what stands between you and breaking ground, call Valencia Realty Capital (VRC). We will help you assess whether the project fits this program, model what the structure means for your equity and your returns, and get you a preliminary read on terms quickly.
If this capital source may be of interest, book a call to discuss a potential capital arrangement.
Read our last Capital Spotlight: “Quick-Closing Participating Bridge Loans: Up to 90% LTC on $1–10MM Value-Add Deals”