Why choose AIC to fund your spec home construction?

September 29, 2020 By ,

As a real estate investor, you have a choice when it comes to funding the construction of your spec home. What should you look for and why is AIC the right choice?

What is a spec home?

A spec home (short for speculative home) is the process of building a single-family home or multifamily property without having a buyer already arranged. The home should have wide appeal so that it attracts a variety of potential buyers. This can be a gamble, of course, since investors risk the additional expense of a building languishing on the market. Luckily, the Oregon real estate market is expanding and it’s a perfect time to invest in building a spec home!

How does a spec loan work?

A speculative loan is designated for houses that haven’t yet been built. Lenders usually require approval of a project proposal prior to funding since the total cost isn’t known until the end of the project. Usually a timeline, estimated budget, and a floor plan are provided to the lender. Until the project is completed, the borrower will pay just interest during construction. After construction is completed and the building is in the borrower’s possession, they must pay the final principal loan and interest.

Pros and cons of a spec home

As mentioned above, spec homes are an inherently riskier real estate investment. What are some other things to keep in mind?


  • It’s often easier to build a desirable spec home than it is to find a good fix and flip property.
  • Spec homes avoid the unpleasant and expensive surprises that can often arise during a fix and flip (like unexpected structural problems, mold, electrical issues, etc.).
  • Private lenders are accustomed to working with investors on spec homes, so the process is smooth.


  • Market trends might change after the deal is financed but before the project is ready to go on the market.
  • The real estate market might dip before the property is ready to sell.

How to choose a private lender

So how can you choose a private lender for your spec home project? Don’t underestimate the importance of this step. You’ve already done so much work for the investment project of your dreams! Now do just a little more leg work to ensure that you find a trusted partner to financially back you. What criteria is important in a lender?

You want a lender who is…


Finding a spec home lender who is local to your area is extremely important. Why does it matter? When it comes to real estate, knowledge of the local market is key. A local lender will already be experienced with local codes and regulations related to funding your project. They’ll keep the details and specific environment of your market in mind when underwriting your loan. This enhanced underwriting means that your lender will be fully committed to your project’s success. Even better? A local lender will give you more personal attention than a national or out-of-state lender. For over 35 years, AIC has worked in communities throughout Oregon such as Bend, Corvallis, and Hillsboro. We know the Oregon real estate market because it’s our home, and we’re pleased to provide personalized service and savvy insight.


Investment properties can be risky and you don’t want to trust such an asset with just any lender. Seek out a backer with experience funding a select scope of assets. You want a specialized lender, not one who is also focused on traditional banking or home mortgages. Work with a partner who is skilled and knowledgeable when it comes to short-term private money loans, as well as one who values transparency and communication throughout the process. AIC specializes in business-purpose real estate loans in Oregon, and our track record speaks to the depth of our knowledge.


The spec home process can be stressful and require quick turnaround. A dependable lender will complete their tasks on time, answer any questions that arise, and generally be responsive to your needs. Hard money loans have the advantage of closing quickly. You need to be able to move on a promising opportunity quickly. A lender who won’t return your calls will cost you money. Here at AIC? We prioritize our clients and our relationships. Our customer reviews speak to our continued success.

Build a relationship with AIC

Work with a trusted partner who makes the process efficient, seamless, and successful! Learn more about our new construction loans and our team. If you have questions, contact us today at 541-343-9714 or use our form. AIC is seeking out loan requests on new construction projects – let us take your dream to the next level!

Questions? Give us a call!

  • This field is for validation purposes and should be left unchanged.

Categories: ,