Thirty-unit garden apartment development

30-Unit Construction and Refinance Example

Acquire land → build → lease → refinance

Build thirty apartments with a $900,000 land purchase, $4.5 million hard-cost budget and $550,000 soft-cost budget. The starting plan includes an 18-month build and four months for lease-up and permanent financing. Test the exit before committing to the construction debt.

By Jaken Finance Group · November 7, 2026

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Property illustration: thirty-unit garden apartment development — Property illustration for this funding example.

How this funding example works

The starting calculation follows the assumptions described above. Change inputs in the calculator to explore your own numbers. All rates, leverage, rents, cap rates and fees are planning assumptions; they do not establish an offer, appraisal or loan eligibility.

Build a complete development budget

Land, hard costs, soft costs and a fully spent hard-cost contingency make up the eligible project budget in this illustration. Acquisition closing costs, origination, drawn-balance interest and carrying expenses are outside that eligible-cost calculation and are paid from owner cash. Lender eligibility can differ; reconcile the actual commitment line by line.

The project loan is drawn in stages. Acquisition funds advance at closing; work is paid before equal month-end reimbursements. Interest is paid from owner cash on the beginning monthly drawn balance. No rent is credited during renovation, construction or lease-up, which keeps the project carry visible. The cash schedule includes the temporary need to pay work before receiving a draw.

These are development assumptions rather than a construction bid or a statement of local rental demand. Obtain site-specific land diligence, a supported contractor schedule, finished tax and insurance estimates, and unit-level rent evidence. Entitlement delays before closing and extraordinary site work need their own budget if applicable.

Make the example your own

Edit the deal. See the cash change.

Change any assumption to update the loan sizing, cash requirement and exit. Starting values are planning assumptions; actual terms require property and borrower review.

Land and construction budget

Land purchase ($)

Hard construction costs ($)

Soft costs, permits and professional fees ($)

Contingency on hard costs (%)

Acquisition closing costs, excluding loan fee ($)

Project financing and timeline

Assumed project loan-to-cost (%)

Completed-value loan ceiling (%)

Project loan annual interest rate (%)

Origination fee on commitment (%)

Construction months

Lease-up and refinance months after construction

Project loan term available (months)

Extension / other project financing fees ($)

Monthly carrying costs and liquidity

Monthly property taxes during project ($)

Monthly project insurance ($)

Monthly utilities during project ($)

Other monthly holding costs ($)

Unspent liquidity reserve ($)

Retained cash, separate from spent contingency. Excluded from project profit and costs.

Stabilized annual apartment pro forma

Apartment units

Monthly rent per unit ($)

Vacancy / collection loss on rent (%)

Other annual collected income ($)

Management on collected rent (%)

Annual stabilized property taxes ($)

Annual stabilized insurance ($)

Annual owner-paid utilities ($)

Annual repairs ($)

Other annual operating expenses ($)

Annual replacement reserve per unit ($)

Income-based valuation cap rate (%)

Permanent financing and closing costs

Assumed permanent loan-to-value ceiling (%)

Permanent annual interest rate (%)

Amortization (years)

Minimum NOI debt-service coverage assumed

New loan origination fee (%)

Other refinance / purchase closing costs ($)

Nonrefundable third-party, legal, title, recording and applicable transaction taxes. Exclude origination and refundable escrow funding.

Initial escrow / lender reserve funding at closing ($)

Cash withheld at closing, treated as a retained asset rather than a project expense. Do not also include it in fees or the separate liquidity reserve.

Project loan prepayment charge at exit ($)

Starting example shown below. Inputs update automatically when JavaScript is available.

Modeled permanent loan: $5,418,949
Net refinance cash / cash needed if negative: $780,570
Owner cash remaining in the deal: $2,004,399
Monthly owner cash flow after reserves: $8,787

Acquisition and project budget
Land purchase	$900,000
Hard costs	$4,500,000
Soft costs / permits	$550,000
Contingency assumed fully spent	$450,000
Eligible acquisition and work budget	$6,400,000
Acquisition closing costs	$35,000
Project loan origination fee	$89,600
Extension / other project financing fee	$0
Drawn-balance interest through exit	$542,369
Tax, insurance, utilities and other holding costs	$198,000
Total project cost before sale/refinance costs	$7,264,969

Project funding and liquidity
Modeled total loan commitment	$4,480,000
Acquisition loan advance	$630,000
Work funds disbursed in stages	$3,850,000
Cash spent at acquisition closing	$394,600
Cumulative owner cash spent before exit	$2,784,969
Peak cash spent before monthly reimbursement	$2,806,058
Unspent liquidity reserve	$150,000
Peak liquidity required including reserve	$2,956,058
Work months	18
Post-work sale / lease-up and refinance months	4

Stabilized annual apartment pro forma
Scheduled rent	$792,000
Vacancy / credit loss	$39,600
Other collected income	$18,000
Management on collected rent	$60,192
Property taxes	$90,000
Insurance	$30,000
Owner-paid utilities	$18,000
Repairs	$24,000
Other operating expenses	$12,000
NOI before financing and capital reserves	$536,208
Replacement reserve	$9,000
Cash flow used for debt coverage	$527,208
Income-based value assumption	$8,579,328
Annual permanent debt service	$421,766
Annual owner cash flow after reserve	$105,442

Refinance exit waterfall
Value-based loan ceiling	$6,434,496
Coverage-based loan ceiling	$5,418,949
New permanent loan	$5,418,949
Project loan principal payoff	$4,480,000
New loan origination fee	$108,379
Other refinance closing costs	$20,000
Initial escrow / lender reserve funding	$30,000
Project loan prepayment charge	$0
Net refinance cash / cash needed if negative	$780,570
Cash remaining invested after refinance	$2,004,399
Permanent monthly principal and interest	$35,147
Underwritten NOI ÷ annual debt service	1.25×
Cash-on-cash on positive cash remaining invested	5.3%
Total project cost including refinance and prepayment fees	$7,393,348

Inspect the monthly work, draws and cash schedule

Monthly project cash schedule
Month	Work paid	Loan draw	Ending loan balance	Interest paid	Other carry	Owner cash spent to date
1	$305,556	$213,889	$843,889	$5,513	$9,000	$500,779
2	$305,556	$213,889	$1,057,778	$7,384	$9,000	$608,830
3	$305,556	$213,889	$1,271,667	$9,256	$9,000	$718,752
4	$305,556	$213,889	$1,485,556	$11,127	$9,000	$830,546
5	$305,556	$213,889	$1,699,444	$12,999	$9,000	$944,211
6	$305,556	$213,889	$1,913,333	$14,870	$9,000	$1,059,748
7	$305,556	$213,889	$2,127,222	$16,742	$9,000	$1,177,156
8	$305,556	$213,889	$2,341,111	$18,613	$9,000	$1,296,436
9	$305,556	$213,889	$2,555,000	$20,485	$9,000	$1,417,588
10	$305,556	$213,889	$2,768,889	$22,356	$9,000	$1,540,610
11	$305,556	$213,889	$2,982,778	$24,228	$9,000	$1,665,505
12	$305,556	$213,889	$3,196,667	$26,099	$9,000	$1,792,271
13	$305,556	$213,889	$3,410,556	$27,971	$9,000	$1,920,908
14	$305,556	$213,889	$3,624,444	$29,842	$9,000	$2,051,417
15	$305,556	$213,889	$3,838,333	$31,714	$9,000	$2,183,798
16	$305,556	$213,889	$4,052,222	$33,585	$9,000	$2,318,050
17	$305,556	$213,889	$4,266,111	$35,457	$9,000	$2,454,174
18	$305,556	$213,889	$4,480,000	$37,328	$9,000	$2,592,169
19	$0	$0	$4,480,000	$39,200	$9,000	$2,640,369
20	$0	$0	$4,480,000	$39,200	$9,000	$2,688,569
21	$0	$0	$4,480,000	$39,200	$9,000	$2,736,769
22	$0	$0	$4,480,000	$39,200	$9,000	$2,784,969

Results round to whole dollars; calculations retain unrounded amounts. Retained liquidity is not a spent project cost. Initial escrow funding reduces cash available at closing and remains an asset, separate from fees. Negative cash remaining in the deal means refinance proceeds exceed cash spent; those proceeds are borrowed money. Income taxes, tax benefits and ownership distributions are excluded. The entered amortization is separate from loan maturity and the fixed-rate period.

Lease the building into the permanent loan

The annual pro forma starts with unit count times monthly rent times twelve, then deducts vacancy, management and itemized operating expenses. Other income is entered as collected income rather than a second scheduled amount. Capital replacement reserves are deducted after operating NOI to arrive at cash available for debt coverage.

Income-based value is operating NOI divided by the entered cap rate. That is a sensitivity assumption, not an appraisal. The lender can use different rents, expenses, reserves, value and stabilization requirements. An apparently attractive completed value does not remove the income limit on the permanent loan.

Reconcile the construction payoff and the takeout

The refinance uses the lower of the entered value-based ceiling and the coverage-based ceiling. Origination is calculated on the new loan, then other closing costs and any old-loan prepayment charge are deducted. A negative closing result is a cash requirement. Released equity is borrowed money, not project profit.

The new debt payment is calculated from the entered interest rate and amortization. Debt coverage uses annual cash flow after the replacement reserve divided by annual principal and interest. Property taxes and insurance have already been deducted in the NOI and are not added to debt service again.

A positive refinance distribution does not mean the entire equity contribution is recovered. The cash-remaining line shows the part still invested after payoff and fees. A negative distribution means a new cash contribution is needed at the takeout. Stress both the project timeline and stabilized rent before relying on the permanent financing.

What to verify for a real property

The entered project LTC is a negotiated assumption, not an advertised approval or commitment.
No project-period rent is credited, even during lease-up. The permanent pro forma begins only after the modeled exit.
Completion, occupancy, lease-up, draw approvals and reserve requirements must fit the actual construction maturity.

Use the published program parameters as the starting program reference. The OCC commercial real estate lending handbook provides general background on development and income-property lending risks; it does not set Jaken Finance Group’s terms.