Asset Based Lending is proud to celebrate our borrower’s successful real estate investments and our loan officers who facilitate that success. ABL will be highlighting our loan officers favorite deal each month, going through the details that made it a win and how our experts navigated the process.
The Deal: New Construction in Jersey City, NJ
Today’s deal comes from Susan Botros, who closed this new construction loan in Jersey City, NJ. The parcel of land was purchased for $625,000 and included a multi-family housing complex that is set to be completely gutted and partially demolished to allow for new construction with a construction budget of $640,000. The total loan amount came to approximately $1.1 million and was funded at 87% LTC. The borrower’s exit strategy is to sell the individual units of the condominium with a combined total ARV of $1.8 million.
The borrower is a repeat borrower that has completed several ground-up new constructions in Jersey City, using these same condominium building plans for other successful deals in the area. He has spent almost 20 years as a full-time mortgage broker as well as real estate investor. His high-quality construction builds and an eye for finding financially lucrative properties has allowed him to continue chaining together profitable real estate deals throughout the New Jersey and New York areas. Not only has this borrower worked with the ABL team on multiple successful deals throughout the years, but they have also referred several clients to Susan and the rest of the ABL team, creating a beneficial partnership for both.
The estimated build time for this new construction is 15 months, which goes beyond the typical 12-month loan term that ABL offers on its hard money loans. Given the established relationship Susan and the ABL team have with the borrower, they allowed for an 18-month loan term to enable a comfortable construction timeline for the property. The existing building’s façade is being transformed into beautiful brick walls with black trim window frames. Each unit in the condominium will be 3-bedrooms, 2-baths measured at approximately 1190 square feet. Home finishes will be mid-grade or higher, highlighted by 10-foot high ceilings, hardwood floors, granite countertops, and energy-efficient appliances.
According to Redfin, the average sale price for homes in Jersey City is currently $570,000, which is a slight 1.6% decrease from the previous year. However, the average sale price per square foot is now at $470, which is a nearly 12% increase from the previous year and explains the increase in new construction that the area is seeing. Typically homes in the area are on the market for 38 days and sellers are receiving two offers on average before the final sale, giving them a little bargaining power with the sale price. 191 homes sold during October 2020, highlighting a healthy seller’s market that is currently favoring new construction projects over fix and flips. New residential construction is on the rise throughout the entire country, with record breaking numbers of residential construction permits being submitted in October, with traditionally rental-focused cities such as Jersey City seeing that same level of change.
Susan’s Insight
Susan has continued to work diligently in 2020, growing her relationships with her borrowers and consistently providing the highest quality service to all ABL clients. She believes that building genuine relationships with real estate investors is the key to her success, allowing for a profitable back-and-forth partnership with borrowers like this.
I enjoy every interaction I have with this borrower because he is constantly giving industry insights and real estate investing advice from his own experiences. Speaking on behalf of ABL, we are excited to see him complete another successful project
“I enjoy every interaction I have with this borrower because he is constantly giving industry insights and real estate investing advice from his own experiences. Speaking on behalf of ABL, we are excited to see him complete another successful project,” said Susan. Her knack for working well with people and helping them secure successful hard money loans for real estate have helped ABL become the most reliable hard money lender in the country. If you’re looking for a hard money loan for new construction or fix and flips, contact Susan today.