The Deal: New Construction in Southampton, NY
We’ve aggressively improved our new construction products to provide developers with the leverage and terms needed to move quickly and capitalize on this mini exodus of people leaving the metro area for the burbs.
Today’s deal comes from Nik Gak, who closed this hard money new construction loan in Southampton, New York. The property was purchased for $605,000 with a construction budget of $1,000,000 and a total loan funded at nearly 85% LTC. The borrower is an experienced investor and real estate developer that has completed other successful deals with ABL. They specialize in constructing luxury single-family homes and have intimate knowledge of the Hamptons area.
“The Hamptons market has been on fire since last March,” said Nik. “We’ve aggressively improved our new construction products to provide developers with the leverage and terms needed to move quickly and capitalize on this mini exodus of people leaving the metro area for the burbs.”
The proposed build is a luxury single-family 5-bedroom, 4.5-bathroom measured at 3,493 square feet. The property will be smart-home ready and feature 10-foot-high ceilings with a vaulted ceiling in the foyer, oak wood floors throughout, and unique tiling in each bathroom. Other interior highlights will include high-end appliances, customer shaker cabinets in the kitchen, and tray ceilings in the bedrooms. Exterior highlights will include a large outdoor patio and pool. Construction is expected to take between six and eight months with final sale expected a month after completion (if property is not pre-sold).Southampton NY is an upper-class town in Suffolk County that has become a huge investment opportunity for luxury new construction projects, as well as high-end fix and flips. Southampton is an example of the investment opportunities that appeared after the pandemic caused many wealthy professionals to leave New York City and search for permanent residence in the nearby areas. As of February 2021, the average home price for the town reached $1,099,000 which is nearly a 13% increase from the year before. Homes are remaining on the market for an average of 38 days which is an incredible 75% less time on market than 2020. One of the biggest advantages of new construction investments is the ability to pre-sell the build to a homeowner, and with home demand remaining incredibly high in this area, builders and contractors with the right plans can create a lucrative opportunity.
Due to the experience level of the borrower and their high-quality builds combined with the current market conditions, this project is expected to bring in over $500,000 in profit for the borrower. “It’s always a pleasure working with pros,” said Nik. “I’m looking forward to working with this borrower on another successful deal in the future.” Nik is an expert in the New York real estate markets and has a passion for these beautiful luxury builds that are occurring throughout the NY suburbs.
The ABL team is always paying attention to market trends and listening to borrower requests to understand how we can better tailor our loan programs to help meet investment needs. By re-introducing programs like our zero-point loan and continuing to provide flexible loan options to give borrowers the best rates for their project, ABL is dedicated to offering the most borrower-friendly loans on the market. If you want to be approved for your hard money loan, contact us today.