Bridge, Rental and Build
Spec Building Basics for South Texas
Short-term capital is a timing tool. This guide covers one of the timings.
Bridge, Rental and Build
The short version, then the substance.
Key Takeaways
- What spec means
- Picking the lot and the product
- De-risking the bet
What spec means. Building without a buyer, on the bet that the market wants what you are building where you are building it. The reward is the full development margin. The risk is the calendar.
Picking the lot and the product. Build the neighborhood's best-selling floor plan, not your dream house. Path-of-growth corridors with active resale demand and school anchors absorb spec product fastest. The lot basis sets the margin before the first nail.
De-risking the bet. Pre-construction marketing, a finish package buyers in that price band actually choose, and a budget with real contingency. A spec build with a 12 month facility and a 7 month construction plan has buffer. One with a 11 month plan has a problem.
The South Texas angle. Averlend underwrites this every week in San Antonio and across Bexar County. If you are working a deal in Alamo Heights or anywhere else in the metro, the theory above comes with a local desk attached: see our San Antonio lending page or send the deal directly.
Questions
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