Spec building is the new construction of a home to be sold during or after completion. Contractors, builders and/or developers who are building a home(s) without a guaranteed sale upon completion are said to be building a "Spec" home, which is short for "Speculation." These individuals and companies are speculating that they will earn a profit when selling the newly constructed home but the buyers of the finished project are unknown in most cases. Many Spec Builders can attribute success they have achieved to correctly planning out the timing of buying the land and selling the newly constructed property. Therefore, depending upon the market at the time of project completion, a sale of the property may not take place immediately.
While many lenders adhere to a rigid policy against making construction loans for properties that are not pre-sold or pre-leased, we understand the current market trends well enough to keep your pipeline flowing. In most cases, if the lot is owned free and clear then 100% of construction costs can be financed when using Del Mar.