The experienced underwriters at SFG HQ and branch levels are provided with the flexibility and discretion to consider loan requests that may be a bit larger or smaller than our published limits. A variety of factors may be considered when an underwriter elects to accept such a request or opportunity, and inasmuch as each underwriter has been with SFG for an average of 13 years, they well-know when to avail themselves of the flexibility management affords them.
Such was the original case with the Borrower on this recently completed construction loan. Now a 3x repeat construction client, he first approached Seattle Funding Group in the fall of 2013. Let’s take a look:
- 2013: His request was for a $269,000 spec residential construction loan in the El Sereno neighborhood of Los Angeles. The amount was considerably under our published minimum lending amount, but the project was well-conceived and the Borrower was one SFG felt very likely to succeed, profit and repeat. The financing request was accepted, the loan approved, funded, and ultimately, 12-months later, he sold the hillside spec house for well over proforma at $840,000.
- 2015: He then returned in early 2015 and borrowed $495,000 for his second spec, also in El Sereno, about a block from the first. Thirteen months later, he completed and sold the second El Sereno spec for $855,000.
With those two successes under his belt, and the profits in his pocket, he chose to refocus his spec construction efforts to Studio City and the San Fernando Valley. This third project was, like his first two, a hillside project, however it is located in a much trendier and higher priced, view-oriented and walkable neighborhood. He is therefore likely to be better rewarded for his time and efforts. Equally important, the loan size is now well within our minimum target range, and this successful small builder has validated the underwriter’s initial instinct and decision to support the original small loan request 34 months ago.
This common-sense flexibility, coupled with an industry leading, in-house construction loan department, are among the many reasons SFG enjoys such a high rate of repeat with its spec residential construction clients. We added a great deal of value to the entire process, worked hard to insure our client’s success and profitability, and are ready to move up with them as their evolving operations demand…for 29 years and counting.