| Focus | Business-purpose investment and development |
| Case | Anonymous financing structure |
| Market lessons | Georgia, Florida and Texas |
Residential developers, builders, and investors in Georgia, Florida, and Texas often need financing at more than one point in a project. A new acquisition needs purchase capital and a construction budget. An already-owned property may need refinancing to retire existing debt and support the next stage. This anonymized Stonehaven Lending case study examines both needs within one recent financing structure for an experienced residential real estate operator.
The structure paired a $2.79 million acquisition and construction loan with a separate $2.1 million refinance. The first combined 90% purchase financing with 100% financing of the stated construction budget. The second sized financing at 75% of the stated property value, with an existing mortgage payoff of approximately $750,000.
The figures below describe the supplied financing structure, not a current rate offer or confirmation of a completed closing. The original transaction location is intentionally undisclosed. Georgia, Florida, and Texas are discussed as markets where qualified business-purpose operators may have comparable financing needs, not as the locations of these two transactions.
The financing challenge
For an operator managing multiple projects, the financing question is broader than the largest available loan. How much cash goes into the purchase? How will construction expenses be funded? What happens to debt already secured by another property? Does the repayment deadline fit the intended sale or refinance?
Here, the acquisition involved a $1.1 million purchase price and a $1.8 million construction budget. Separately, the operator needed a refinance involving a $2.8 million value and an existing payoff of about $750,000. Those are different financing stages, with different uses for the proceeds.
Stonehaven’s role was to help structure those needs through third-party capital providers. Working through one financing relationship can keep the acquisition, construction, and debt-payoff discussions coordinated. It does not mean the loans share collateral, have a common lender, or guarantee funding for future projects; those details were not supplied.
How the acquisition and construction loan was structured
The acquisition financing was $990,000, equal to 90% of the $1.1 million purchase price. The construction component was $1.8 million, covering 100% of the stated construction budget. Together, those components produced a total loan of $2.79 million.
Against a projected after-repair value of $4.5 million, the total loan was approximately 62% of projected ARV. This is the key distinction: high leverage against purchase and construction costs can coexist with a lower loan balance relative to estimated completed value. The purchase-price percentage, construction-budget percentage, and ARV percentage measure different things.
| Purchase price | $1.1 million |
|---|---|
| Acquisition financing | $990,000, 90% of purchase price |
| Construction budget | $1.8 million |
| Construction financing | $1.8 million, 100% of stated budget |
| Total loan | $2.79 million |
| Projected ARV | $4.5 million |
| Loan / projected ARV | Approximately 62% |
| 12- or 18-month term | 8.50% stated rate |
| 24-month alternative | 8.75% stated rate |
| Origination fee | 2% |
The difference between the purchase price and acquisition financing is $110,000. That is the purchase-price contribution before closing costs, reserves, or other requirements. It is not a complete cash-to-close estimate. Similarly, 100% construction-budget financing does not establish that the entire construction allocation is available on day one or that every additional expense is covered.
Purchase plus the stated construction budget equals $2.9 million. The $2.79 million commitment represents approximately 96.2% of that subtotal. This calculation excludes any costs outside the supplied figures, so it should not be mistaken for a lender-confirmed all-in loan-to-cost ratio. Review the accepted budget, exclusions, and cash requirements together.
How the refinance was structured
The second transaction used a stated appraised or projected value of $2.8 million and a loan amount of $2.1 million, equal to 75% of that value. The supplied information does not distinguish an as-is appraisal from a projected completed valuation. That distinction matters when reviewing eligibility, timing, and conditions for funding.
The refinance was structured to pay off approximately $750,000 of existing mortgage debt while creating capacity for additional project capital. Subtracting the payoff from the loan amount leaves approximately $1.35 million before fees, closing costs, reserves, holdbacks, or any restrictions on proceeds. It is not a verified net cash-out amount.
| Stated appraised or projected value | $2.8 million |
|---|---|
| Loan amount | $2.1 million |
| Loan / stated value | 75% |
| Existing mortgage payoff | Approximately $750,000 |
| Difference before deductions | Approximately $1.35 million, not net cash proceeds |
| 12- or 18-month term | 8.50% stated rate |
| 24-month alternative | 8.75% stated rate |
| Origination fee | 2% |
The quoted origination fee was 2% for each transaction. The fee’s calculation base and whether it is paid separately, deducted from proceeds, or financed must be confirmed in the documents. The supplied terms do not establish those details. A useful comparison starts with a complete sources-and-uses statement, not just the difference between the new balance and old payoff.
Why this structure worked
The structure addressed two distinct needs: purchase and construction funding for one project, and an existing-debt payoff with potential additional capital for another. Its appeal was the alignment of financing with those stages. This case study does not report a finished build, realized profit, final cash distribution, or subsequent sale.
On the acquisition, the 90% purchase advance reduced the purchase-price contribution, while the separate construction allocation addressed the stated build budget. At approximately 62% of projected ARV, total leverage was lower relative to anticipated completed value. That margin is not guaranteed equity or profit: valuation changes, cost overruns, carrying costs, and selling expenses can affect the outcome.
Both transactions included 12- or 18-month options at an 8.50% stated rate, with a 24-month alternative at 8.75%. These are the case-specific terms supplied for discussion, not broadly available pricing. The information does not establish amortization, payment frequency, extension rights, or whether interest is charged on the commitment or funded balance.
A builder should compare the term with the project schedule and intended exit. Ask what happens if completion or sale takes longer than expected, and obtain any extension conditions in writing. For general background, the CFPB’s construction-loan overview explains the short-term nature of construction financing and why the eventual payoff or replacement loan matters. It does not verify the terms of this business-purpose case.
What developers in Georgia, Florida, and Texas can learn
Georgia: Atlanta infill and teardown projects can create the same sequence of acquisition, demolition or site work, construction, and eventual exit. North Georgia luxury and spec-home construction can raise similar questions about budget, completed value, and the cash needed before sale. Operators comparing residential construction loans in Georgia should present the actual project scope rather than rely on a program headline.
Florida: Miami and Fort Lauderdale luxury residential redevelopment, along with Tampa, Orlando, and Jacksonville infill projects, can involve purchase financing and a substantial construction component. Florida real estate investor loans should be reviewed against the specific property, budget, timeline, and exit. This example does not establish the same advance percentages or pricing for every Florida market.
Texas: Dallas-Fort Worth spec-home and residential development, Austin and Houston acquisition and construction projects, and San Antonio investment projects can also require financing across several stages. Texas residential development financing needs a property-specific review. The relevance here is the capital structure, not a promise that one lender or one set of terms applies statewide.
Across all three states, these discussions concern business-purpose residential investment and development. They do not advertise owner-occupied consumer mortgage availability in Texas. Location, borrower experience, project scope, budget, exit strategy, property type, and lender underwriting can all change what Stonehaven can arrange through a financing source.
Projects Stonehaven can evaluate
Relevant scenarios include residential investment acquisitions, ground-up and spec-home construction, luxury development, infill and teardown projects, and fix-and-flip financing. Stonehaven can also evaluate bridge financing, construction completion requests, development refinancing, existing debt payoff, and cash-out refinancing when permitted by the applicable program.
Single-family rentals, build-to-rent projects, and small residential portfolios may call for a different financing path. For example, a rental-focused exit can prompt a separate review of DSCR and residential investment property financing. A construction proposal does not establish eligibility for the later rental loan; present the intended hold or sale strategy at the outset.
Submit your development financing scenario
Investors and developers in Georgia, Florida, and Texas can submit a construction or investment-property financing scenario. Include the property location, purchase price, construction budget, current value, projected completed value, requested loan amount, borrower experience, and intended exit strategy. For an owned property, include the current mortgage payoff and remaining work.
Ask for a review of initial funding, construction allocations, estimated cash required, and the eventual payoff plan. Stonehaven can evaluate the scenario and follow up by text. An initial review is not approval or a commitment to lend.
Frequently asked questions
Can 90% purchase financing and 100% construction financing be combined?
They were combined in this supplied structure. Similar leverage depends on the borrower, property, budget, location, and financing source. It is not an automatic program entitlement.
Does 100% construction financing mean no money out of pocket?
No. This example still has a $110,000 purchase-price difference before other requirements. Closing expenses, reserves, excluded costs, and funding timing can create additional cash needs.
Was the refinance’s $1.35 million difference all cash available to the borrower?
That amount is only the loan minus the approximate existing payoff. Actual available proceeds depend on deductions, reserves, restrictions, and funding conditions.
Are 8.50% and 8.75% available for a project today?
The rates describe the supplied case structure only. They are not current offers. A new scenario requires its own pricing, underwriting, and final approval.
Can Stonehaven review projects in all three states?
Stonehaven can evaluate business-purpose development and investment scenarios in Georgia, Florida, and Texas, subject to state and program availability. The original case location remains anonymous.
Related builder resources
Continue with our guides to Atlanta teardown and rebuild financing, cash requirements with high-leverage construction financing, and construction financing on property you already own. For a rental exit, review DSCR rental-property financing separately.
Stonehaven Lending is a real estate capital advisory and brokerage firm, not a direct lender. Financing is arranged through third-party capital providers and is subject to lender underwriting, borrower qualifications, property review, state and program availability, and final approval. The transaction described above is an anonymized example provided for informational purposes only. Past transactions do not guarantee similar terms or future results.