| Purpose | Business-purpose construction |
| Stage | Initial financing review |
| Examples | Hypothetical, not approved terms |
A teardown project has two financing problems to solve: getting control of the property and funding a new building after the existing structure is removed. For a builder planning to sell the finished home, the review should cover both stages. A renovation quote based on keeping the original house may not fit a complete demolition.
Start with the project scope, not just the purchase price
Explain whether the plan is a full teardown, a substantial renovation or an addition. Identify what will remain, when demolition is expected and whether the property will be sold or held as a rental. A home being built for the borrower to occupy needs a different review from a business-purpose spec build.
Your first project summary should show purchase price or existing payoff, demolition and site work, vertical construction, soft costs, estimated completed value and requested closing date. Keep acquisition and build costs separate so the reviewer can see how the commitment would be used. Label the completed value as an estimate until supported by the lender’s appraisal.
Separate the closing advance from the construction commitment
A total loan amount is not the same as money delivered at acquisition. Ask for a sources-and-uses schedule showing the amount available to buy the property, the construction funds held back and the cash needed from the builder. Confirm whether demolition is an eligible budget item and when it can be funded.
A useful hypothetical is a $900,000 acquisition and a $1.4 million construction budget. The $2.3 million subtotal is not necessarily the complete project cost: design, permits, financing costs, interest, insurance, contingency and sale expenses still need to be identified. An attractive finished-value estimate does not pay those bills during construction.
Brookhaven permits belong in the financing timeline
Confirm the actual permitting jurisdiction for the parcel instead of relying on its mailing city or ZIP code. Brookhaven publishes separate guidance for demolition permits and new single-family construction. Its demolition page lists a site plan, vermin letter and applicable EPD notification forms among the required items.
Ask the design and construction team to map permit dependencies, utility work and site conditions before committing to a demolition date. Also confirm the current mortgage holder’s requirements before removing a structure securing its loan. A purchase deadline and a construction-ready date are often different milestones.
Present the builder and the exit as clearly as the building
Include a concise list of comparable completed projects, the builder or general contractor’s role, the current pipeline and available project reserves. For a spec sale, show the proposed floor plan, finish level, comparable sales and expected marketing period. For a rental exit, request a separate permanent-financing review rather than assuming a refinance will be available.
What should I send to get useful feedback?
Start with the city and state, acquisition or ownership status, purchase price or payoff, itemized budget, estimated completed value, experience and timing. Request a secure channel for contracts, statements and other private documents. Stonehaven can review the financing question before a complete lender package is assembled; preliminary feedback is not a term sheet or approval.
Related builder guides
100% LTC Construction Loans: How Much Cash Does a Builder Really Need? · Construction Financing When You Already Own the Property: Equity and Mortgage Payoff
See how these questions come together in an anonymized acquisition, construction and refinance case study, with term tables and lessons for Georgia, Florida and Texas.