Deal snapshot
| Location | Naples, Florida (coastal luxury corridor) — composite example |
| Property type | Coastal custom SFR spec (luxury new construction) |
| Loan type | Ground-up construction — milestone draws |
| Loan amount | $1.26M (75% of $1.68M as-completed) |
| Close time | 14 business days from complete construction package |
Problem — coastal lot, flood line, thin spread at corrected comps
A repeat Florida operator controlled an entitled pad on a Naples coastal corridor lot in FEMA AE and ran two columns: buy and hold land versus vertical luxury spec. Hold math showed carry with no income. Spec math showed $1.68 million all-in and $1.68 million as-completed only after coastal custom comps replaced inland tract imports from Golden Gate.
The sponsor’s first lender quoted 85% LTC without reading the flood cert. Qualified luxury construction up to $2.5M can reach 100% LTC — but the value cap said 75% LTARV = $1.26 million when cost and as-completed matched. Spread lives in elevation discipline, insurance, and calendar, not a headline LTC number.
Product pages: luxury new construction · jumbo hard money over $1M · Listed exit: luxury bridge · Calculator: luxury spec LTC.
Property snapshot
| Line | Amount |
|---|---|
| Entitled lot acquisition | $620,000 |
| Site work, seawall tie-in, dewatering | $48,000 |
| Vertical hard (4,120 sf × ~$158/sf coastal) | $650,000 |
| Pool, dock allowance, landscape | $112,000 |
| Soft costs, plans, coastal engineering | $68,000 |
| Permits, impact, utility fees | $24,500 |
| Flood / elevation / impact glazing premium | $86,000 |
| Contingency (~12% of hard + site) | $71,000 |
| Vertical stack subtotal | ~$1,679,500 |
| Interest + marketing reserve | $148,000 |
| All-in | ~$1,827,500 |
| As-completed (Naples coastal custom solds) | $1,680,000 |
| 75% LTARV | $1,260,000 |
| 100% LTC on $1.68M vertical stack | $1,680,000 (LTARV binds first) |
| Loan in example | $1,260,000 (LTARV binds) |
| Sponsor equity + reserve beyond loan | ~$567,500 in example math |
Note: example compresses some soft lines for readability — sponsor had lot basis and liquidity for LTARV gap before LOI. Files without gap cash do not start.
Challenge
Four failures common on Naples coastal luxury spec files:
Inland comp import. Golden Gate and East Naples tract $520K–$610K solds do not value coastal custom. ARV fantasy adds $120K–$180K until appraiser cuts.
Flood line treated as a footnote. AE zone with +1.2 ft freeboard added foundation, glazing, and insurance lines the first budget skipped. $86,000 hard plus $4,200/year flood premium in carry.
Six-month IO reserve on eighteen-month build. Coastal custom runs 16–20 months vertical plus 120-day seasonal buyer pool. Hurricane-season inspection pauses need calendar, not hope.
Wind-load and product approval. Miami-Dade or Florida Product Approval glazing lead times added six weeks to the window package — reserved in contingency, not borrowed at Gate 4.
Solution — 100% LTC available, 75% LTARV funded
Jaken Finance Group construction box in example: 8.99%–13.5% interest-only, 14 business days close on complete package. Funded $1,260,000 — the lower of LTC and LTARV, under the $2.5M program ceiling.
Draw gates
| Gate | Work | Notes |
|---|---|---|
| 1 | Site, pile/foundation, elevation cert | Flood cert before vertical draw increase |
| 2 | Framing / dry-in / impact glazing order | Product approval on file |
| 3 | MEP rough | Collier County inspection sequence |
| 4 | Drywall / exterior / pool shell | Seawall punch parallel |
| 5 | Finish / CO | Staging line separate from draw |
Rate in carry model: 11.25% IO on rising balance. Change orders on millwork stayed inside 12% contingency.
Result — timeline in the example
| Milestone | Timing |
|---|---|
| Complete package in | Day 0 |
| Close / first draw | Day 14 |
| Foundation / elevation cert / Gate 1 | Week 10 |
| Dry-in / Gate 2 | Month 7 |
| CO | Month 18 |
| List | Month 19 |
| Contract | Month 22 |
| Close sale | Month 23 |
List price: $1,749,000 · Sale: $1,672,000 net of 8% costs → thin spread after $148K carry — margin was correct coastal comps and elevation budget on day one, not coupon heroics.
If DOM slipped past day 120, next step in file was luxury bridge with a price-cut cadence plan — not panic at day 45. Exit playbook: luxury spec home exit at 60–120 DOM. Hold fallback modeled DSCR at 70%–75% LTV on a conservative rent roll.
Takeaway
Naples coastal luxury spec is a value-cap, flood, and comp product that uses draws. Collier coastal solds, elevation cert, wind-load reserve, and 18-month calendar beat a 7.50% teaser on the wrong machine.
Compare: Florida housing outlook · ground-up vs fix and flip.
New construction application · Submit scenario · (833) 264-7776
What the first term sheet got wrong
Shop A offered 85% LTC without flood elevation in the budget. Shop B was a nine-month flip note. Neither matched coastal vertical. The example closed construction because plans, FEMA data, coastal comps, and reserve were complete — not because spread was effortless.
When this example does not apply
- $280K Cape Coral ranch cosmetic — standard fix and flip
- Gut without demo on $750K+ ARV — luxury fix and flip
- STR condo on a 30-day minimum ordinance block — verify local rules first
- Owner-occupied primary residence
Comp mistakes — how Golden Gate tract solds inflated coastal ARV
The sponsor’s first pro forma pulled four solds from Golden Gate and East Naples tract subdivisions. They closed between $520,000 and $610,000, had similar bedroom counts, and sat within a 12-mile radius of the subject. The model applied a 2.8× multiplier for “coastal premium” and landed at $1,820,000 as-completed.
Collier coastal appraisers do not accept inland tract solds for water-access custom product. Buyers compare Port Royal fringe, Aqualane Shores, and coastal corridor custom closes where dock allowance, seawall, and impact glazing are standard — not optional upgrades.
| Comp mistake | What the sponsor used | What underwriters accepted | ARV impact |
|---|---|---|---|
| Geography | Golden Gate / East Naples tract | Naples coastal custom corridor only | −$95,000 |
| Flood / elevation | Ignored AE freeboard in comps | Matched finished-floor elevation | −$42,000 |
| Water utility | Inland pool-only solds | Dock-capable or bay-access product | −$28,000 |
| Wind-load spec | Standard glazing solds | Impact-rated / Miami-Dade approved | −$15,000 |
| Total correction | $1,820,000 fantasy | $1,680,000 defensible | −$140,000 |
After correction, 75% LTARV moved from $1,365,000 theoretical to $1,260,000 — binding before the first vertical draw. Jaken Finance Group requires coastal solds with matching flood zone treatment in the intake packet, not a county-wide radius search.
Rules that saved the file: match FEMA zone and BFE; require impact glazing line in comp adjustments; reject Cape Coral tract solds for Collier coastal custom; include elevation certificate assumptions in the pro forma.
Draw schedule — milestone dollars, flood cert gates, and retainage
Construction funded $1,260,000 in five gates with 10% retainage through certificate of occupancy. Gate 1 did not increase until FEMA elevation certificate and foundation as-built matched plans.
| Gate | % of loan | Draw amount | Work completed | Retainage held | Cumulative drawn |
|---|---|---|---|---|---|
| Close / Gate 0 | 12% | $151,200 | Lot equity credited; site mobilization | $15,120 | $151,200 |
| Gate 1 | 22% | $277,200 | Pile/foundation, elevation cert, seawall tie-in | $27,720 | $428,400 |
| Gate 2 | 26% | $327,600 | Framing, dry-in, impact glazing installed | $32,760 | $756,000 |
| Gate 3 | 20% | $252,000 | MEP rough, insulation, drywall hang | $25,200 | $1,008,000 |
| Gate 4 | 15% | $189,000 | Exterior, pool shell, dock allowance | $18,900 | $1,197,000 |
| Gate 5 / CO | 5% | $63,000 | Finish, landscape, CO, staging | $6,300 | $1,260,000 |
| Retainage release | — | $126,000 | Final lien waiver + CO + flood final | Released at CO | $1,260,000 |
Average drawn balance for IO modeling was ~$580,000 through month 8, rising to ~$1,120,000 months 15–18. At 11.25% interest-only, monthly carry stepped from ~$5,400 early to ~$10,500 at peak — which is why six-month IO reserve fails on 18-month coastal vertical.
Hurricane-season inspection pause at month 11 added fourteen days to the MEP rough gate. $71,000 contingency absorbed the calendar slip without a maturity extension request.
Collier County inspections ran foundation/elevation → frame → MEP rough → insulation → final. Florida Product Approval numbers for impact glazing were on file before Gate 2 draw increase.
Extended timeline — pre-close through sale close
| Phase | Week / month | Event | Cash / loan event |
|---|---|---|---|
| Pre-close | Week −6 to 0 | Flood cert, coastal comp correction, GC contract | Sponsor liquidity verified for LTARV gap |
| Close | Day 14 | First draw + interest reserve funded | $151,200 drawn; IO reserve $148,000 escrowed |
| Vertical | Month 1–7 | Site, foundation, elevation cert, dry-in | Gates 1–2; impact glazing lead time absorbed |
| Vertical | Month 8–14 | MEP, drywall, exterior | Gates 3–4; hurricane pause in month 11 |
| Vertical | Month 15–18 | Finish, pool, dock punch, landscape | Gate 5; retainage held |
| CO + list | Month 19 | Certificate of occupancy; MLS live | Staging $22,000 from sponsor reserve |
| Marketing | Month 19–22 | Showings; seasonal buyer pool | IO from reserve; cadence cuts on calendar |
| Contract | Month 22 | Accepted offer $1,672,000 | Bridge not needed |
| Sale close | Month 23 | Net after 8% costs | Construction payoff from proceeds |
If impact glazing had slipped six weeks, dry-in would have hit month 8.5 instead of 7 — still fundable inside contingency but adding ~$31,000 IO at peak balance.
Bridge exit math — if DOM slipped past day 120
Coastal luxury often needs 120 DOM through shoulder season. The file modeled retail exit first. If no contract by day 120, the next step was luxury bridge while listed — paired with a price-cut cadence, not a fire sale.
Bridge sizing used appraised value $1,695,000 (list $1,749,000) and 65%–70% LTV on listed collateral:
| Line | Amount |
|---|---|
| Appraised value at day 120 | $1,695,000 |
| Bridge at 67% LTV | $1,135,650 |
| Construction payoff | $1,260,000 |
| Sponsor cash-in at bridge | ~$124,350 plus closing costs |
| Bridge rate (IO) | 10.50% example |
| Monthly IO on $1,135,650 | ~$9,937 |
| Target DOM extension | 90 days |
| Bridge IO cost (3 months) | ~$29,811 |
Compare bridge carry to a 12% headline cut at day 60:
| Exit path | List / sale | Est. net (8% costs) | Spread vs $1.68M vertical stack |
|---|---|---|---|
| Hold list + bridge 90 days | $1,749,000 → $1,672,000 sale | ~$1,538,000 | Thin; bridge IO ~$30K |
| 12% cut at day 60 | $1,539,000 → faster sale | ~$1,416,000 | Margin gone after carry |
| 4% cut at day 90 + 4% at day 120 | $1,678,000 → $1,611,000 sale | ~$1,482,000 | Disciplined; two-cut pattern |
Jaken Finance Group sizes listed bridge on appraisal, insurance continuity, and DOM plan — flood policy must stay bound through bridge term.
Price-cut cadence — coastal listing plan before CO
Naples coastal buyers watch DOM and seasonal inventory. The agent and sponsor agreed:
| DOM window | Action | Rationale |
|---|---|---|
| Day 0–75 | Photography, virtual tour, broker events — no price change | Snowbird and reloc buyer cycles need time |
| Day 75–105 | Re-run coastal solds; if spread >6%, one 3%–4% reduction | Fresh Collier coastal closes only |
| Day 105–135 | Second 3%–4% cut if showings flat and new spec inventory listed | Two cuts beat one 10% slash |
| Day 135+ | Bridge while listed or DSCR hold | Hurricane season carry planning |
In the example, contract at month 22 with $77,000 list-to-sale delta (4.4%). The cadence prevented a $175,000 cut at day 55 when a buyer’s jumbo approval expired.
Full exit playbook: luxury spec home exit at 60–120 DOM.
DSCR fallback — seasonal retail fail, corporate rent hold
If the Q2–Q3 buyer pool thinned, business-purpose hold was modeled third. Naples coastal executive rental can achieve $12,000–$16,000/month — but DSCR underwrites long-term lease or documented market rent, not peak-week STR unless the program allows it.
| Input | Conservative | Aggressive (clean file) |
|---|---|---|
| Appraised value | $1,650,000 | $1,680,000 |
| LTV | 70% | 75% |
| Loan proceeds | $1,155,000 | $1,260,000 |
| Rate (amortizing) | 7.50% | 7.10% |
| Market rent | $13,500/month | $15,200/month |
| PITIA + flood insurance | ~$11,800/month | ~$12,600/month |
| DSCR | ~1.14 | ~1.21 |
Construction balance $1,260,000 at 75% LTV on $1,680,000 equals full payoff — zero cash-out. At 70% LTV, sponsor cash-in ~$105,000 plus costs. Flood insurance $4,200/year and wind coverage stayed in the DSCR expense line — not omitted like the first pro forma.
Pivot path: DSCR investment property · Naples luxury new construction hub.
Sponsor profile
Repeat operator with three prior Florida flips and a GC who had delivered Collier coastal custom — not first-file inland ranch experience applied to AE-zone vertical.
Example deal math on investor real estate. Rates, terms, and conditions apply only to qualified borrowers and may change without notice. Jaken Finance Group does not finance owner-occupied housing.