Deal snapshot
| Location | Southlake, Texas (Carroll ISD) — composite example |
| Property type | Custom SFR scrape (luxury spec) |
| Loan type | Ground-up construction — milestone draws |
| Loan amount | $1.02M (75% of $1.36M as-completed) |
| Close time | 14 business days from complete construction package |
Problem — land-heavy file, thin spread, wrong comps almost blew it
A repeat DFW operator controlled a 1984 brick ranch on a Southlake lot in Carroll ISD and ran two columns: $210,000 gut versus scrape and custom vertical. Gut math showed $820,000 all-in and $985,000 ARV — thin. Scrape math showed $1.35 million all-in and $1.36 million as-completed only after Carroll comps replaced Frisco tract imports.
The sponsor’s first lender quoted 90% LTC on a one-pager. Qualified luxury construction up to $2.5M can reach 100% LTC — but the value cap said 75% LTARV = $1.02 million on the corrected as-completed. Spread lives in ISD discipline and calendar, not a lower LTC ceiling on luxury.
Product pages: luxury new construction DFW · spec home construction Texas · Gut alternative: luxury fix and flip DFW.
Property snapshot
| Line | Amount |
|---|---|
| Land / existing structure acquisition | $565,000 |
| Demolition and site prep | $24,000 |
| Vertical hard (3,450 sf × ~$268/sf) | $924,600 |
| Pool, hardscape, landscape | $88,000 |
| Soft costs, plans, engineering | $46,000 |
| Permits, fees | $10,500 |
| Contingency (~11% of hard) | $108,000 |
| Interest + marketing reserve | $118,000 |
| All-in | ~$1,884,100 |
| As-completed (Carroll ISD custom solds) | $1,360,000 |
| 75% LTARV | $1,020,000 |
| 82% LTC on $1.35M vertical stack | $1,107,000 |
| 100% LTC on qualified file | $1,350,000 (LTARV binds first) |
| Loan in example | $1,020,000 (LTARV binds) |
| Sponsor equity + reserve beyond loan | ~$864,000 in example math |
Note: example compresses some soft lines for readability — sponsor had land equity and liquidity for LTARV gap before LOI. Files without gap cash do not start.
Challenge
Three failures common on DFW luxury scrape files:
Frisco comp import. Production tract $720K–$780K solds do not value Carroll custom. ARV fantasy adds $100K–$150K until appraiser cuts.
Six-month IO reserve on sixteen-month build. Southlake custom runs 14–17 months vertical plus 90-day jumbo buyer seasonality.
MUD confusion. This lot was city of Southlake / Tarrant — not Collin MUD. Sponsor nearly modeled Plano MUD tax from a wrong PIN lookup.
Hail during framing. April storm hit before dry-in. $18,000 sponsor deductible — reserved, not borrowed.
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 $1,020,000 — the lower of LTC and LTARV.
Draw gates
| Gate | Work | Notes |
|---|---|---|
| 1 | Demo, utilities, foundation | No finish front-load |
| 2 | Framing / dry-in | Hail claim processed before insulation |
| 3 | MEP rough | City of Southlake inspection sequence |
| 4 | Drywall / exterior | Pool shell parallel |
| 5 | Finish / CO | Staging line separate from draw |
Rate in carry model: 11% IO on rising balance. Change orders on millwork stayed inside 11% contingency.
Result — timeline in the example
| Milestone | Timing |
|---|---|
| Complete package in | Day 0 |
| Close / first draw | Day 14 |
| Foundation / Gate 1 | Week 8 |
| Dry-in / Gate 2 | Month 5 |
| CO | Month 16 |
| List | Month 17 |
| Contract | Month 19 |
| Close sale | Month 20 |
List price: $1,395,000 · Sale: $1,342,000 net of 8% costs → thin spread after $118K carry — margin was buying land $45K better and avoiding $120K ARV overstatement, not coupon heroics.
If DOM slipped past day 90, next step in file was luxury bridge — not $100K price cut.
Takeaway
DFW luxury scrape is a value-cap and ISD product that uses draws. Carroll comps, Tarrant tax cert, hail reserve, and 16-month calendar beat a 7.75% teaser on the wrong machine.
Compare: volume flip vs jumbo construction · Pod path: community build DFW.
New construction application · Submit scenario · (833) 264-7776
What the first term sheet got wrong
Shop A offered 90% LTC without Carroll comps. Shop B was a six-month flip note. Neither matched scrape vertical. The example closed construction because plans, ISD comps, and reserve were complete — not because spread was effortless.
When this example does not apply
- $280K Collin ranch cosmetic — fix and flip Texas
- Gut without demo on $750K+ ARV — luxury fix and flip DFW
- 10-cottage pod — community build DFW
- Austin compatibility scrape — luxury new construction Austin
- Owner-occupied primary residence
Sponsor profile
Repeat operator with three prior DFW flips and a GC who had delivered Carroll ISD custom — not first-file 100% LTC ranch experience applied to scrape.
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.