Ground-Up Construction Loans for Real Estate Investors: The Complete Guide

For real estate investors looking to build properties from the ground up rather than buying and renovating existing ones, Ground-Up Construction Loans provide the necessary capital and flexibility to bring those projects to life. Whether you’re developing a new single-family rental, duplex, or multi-unit property, understanding how these loans work can help you manage risk, stay on budget, and scale your portfolio with confidence.

This guide explores how ground-up construction loans work, who qualifies, how draws are managed, and how rei.loans streamlines the financing process.

What Is a Ground-Up Construction Loan?

These are short-term loans that fund the full construction of a new investment property. Funds are released in stages, based on project milestones, with a focus on future property value (As-Completed Value).

Key Features at rei.loans

- Loan Amounts: $150K to $3M+

- Max LTV (Land): Up to 70%

- Max LTC: Up to 85% of construction costs

- Max ARV: Up to 75%

- Term: 12–24 months, interest-only

- Credit Score: Minimum 620

- Property Types: 1–4 units, townhomes, small multifamily

Benefits of Ground-Up Loans

1. Build-to-Rent or Build-to-Sell options

2. Full control over property design

3. Stage-based funding (draws)

4. Scalable for growth-minded investors

5. Entity-friendly loan structure

Who It’s For

- Residential developers

- Buy-and-hold builders

- Infill and teardown investors

- Fix and flip pros leveling up

- Value-add syndicators

Qualification Criteria

- Viable project with budget and scope

- Soft credit pull (620+ minimum)

- Builder experience or qualified GC

- 15–30% down payment

- Defined exit strategy (sale or refi)

Construction Draw Process

Funds are disbursed based on milestones:

1. Land or Lot Purchase

2. Foundation

3. Framing

4. MEP Rough-in

5. Interior finishes

6. Final Inspection & CO

Eligible Property Types

- Infill lots

- Vacant land

- Teardown sites

- Subdivided parcels

- Small build-to-rent communities

Use Cases

- Build-to-Rent

- Spec Home Flips

- Infill Optimization

- Rebuilding distressed properties

Challenges

- Permit and zoning delays

- Cost overruns (add 10–15% buffer)

- Weather delays

- Exit execution

Application Process

1. Submit land and budget details

2. Upload plans & pro forma

3. Get soft pull and quote

4. Appraisal (as-completed)

5. Close & draw #1

Unavailable States

Not available in: Idaho, Minnesota, North Dakota, Nevada, Oregon, Utah

Why Use rei.loans?

- Fast pre-approvals

- 100% rehab/construction financing

- 3–5 day draw processing

- LLC-friendly

- No income docs

- First-time builders welcome

Ready to build from the ground up?

Visit rei.loans to get a same-day construction loan quote.

This article is for informational purposes only and does not constitute financial advice. Terms subject to change.