Totally agree with the value of local lenders--ours tend to be local/regional banks where we have real relationships. I'm surprised that you go so high LTC in your construction financing, doesn't that add a lot of risk to the deal?
Thanks for the comment Seth! We try to stay 70-80% loan to cost typically and when rates were so low we felt like that outweighed the risks. Investor equity was far more expensive than debt so we opted for more debt. We also usually build, refinance and hold so we have a longer time horizon than some so feel the higher LTC isn't as risky.
Totally agree with the value of local lenders--ours tend to be local/regional banks where we have real relationships. I'm surprised that you go so high LTC in your construction financing, doesn't that add a lot of risk to the deal?
Thanks for the comment Seth! We try to stay 70-80% loan to cost typically and when rates were so low we felt like that outweighed the risks. Investor equity was far more expensive than debt so we opted for more debt. We also usually build, refinance and hold so we have a longer time horizon than some so feel the higher LTC isn't as risky.