When it comes to Build for Rent Financing, its likely that for any development of a BFR community through the project lifecycle from acquisition through stabilization four different loans will have to be sourced and executed. The biggest challenge for developers in this space is replacing the Land + infrastructure (horizontal) loan with the vertical. No one likes starting a development project with financing lined up for only the first portion of the project. What happens if the market shifts during your 18 months of horizontal and then your vertical lender doesn’t like your market, or their total loan dollars for your project drop by 10% and the lender expects you to make up that 10% difference with a surprise cash infusion?
