You're a developer. You've raised $10M in equity. One mandate: build something that survives contact with reality.
Choose your own adventure — no wrong answers, only consequences
Your equity · $10.0M› sized to cover land, closing & soft costs
Construction loan› funds the build, separate from your money
Your equity
$10.0M
covers land, closing, soft costs
Construction loan
—
set at the build
Timeline
0 mo
start
Deal health
Loose
you're in control
How the money movestap to collapse
Your equity · $10M
Sits at the bottom of the stack. Paid last, takes the risk. Covers land, closing and every soft cost — DD, entitlements, design, legal.
land $4.2Mclosingsoft costs
Construction loan · the build
Senior and cheaper. Paid first. Funds the build in draws against milestones — and you pay interest carry on what you've drawn before there's any rent.
drawsinterest carryrefi-out
Draws — lenders fund in stages against completed work, not up front.
Interest carry — there's no income during construction, so interest stacks up; a silent line that inflates your all-in cost and eats margin.
Refi-out — at stabilization a permanent loan repays the construction loan. That's the bridge from build to hold.
Fees are the quiet leak on the whole table.
A 2% raise fee, a 1.5% origination point, legal and closing — each one sounds like "bits and bobs." On a representative $20M project they add up fast. Slide it:
Total fees / points2.0%
Fees cost $0.40M
Your real return: 45.0%
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How this plays.→ Your $10M equity pays for land, closing and soft costs — watch the number move. → The construction loan funds the build. → Every choice moves the table: watch the scorecard pulse. → Run it again on a different road — each ending teaches a different failure.