When Bank Lending Limits Stall Growth: How a Texas Builder Refinanced 19 Rental Homes

July 7, 2026.

Summary

A Texas real estate builder needed to refinance 19 newly constructed homes to transition them into a long-term Build-to-Rent portfolio. After reaching his bank’s lending limits, he needed an alternative financing solution that would allow him to preserve cash flow, maintain equity, and continue growing his business. Lima One Capital structured a $4.173 million DSCR portfolio loan that helped the investor move forward while discovering the advantages of private lending.

The Deal at a Glance

• • Property Type: Build-to-Rent Development
  • Location: Lubbock, Texas
  • Loan Amount: $4,173,030
  • Appraised Value: $5,970,000
  • Loan-to-Value Leverage: 69.9%
  • 19 Build-to-Rent Homes

The Challenge

The builder had successfully completed 19 newly constructed rental homes and was ready to refinance the construction debt into long-term financing. However, despite having a strong project and an established banking relationship, he had reached the bank’s internal lending limits.

Without a refinance solution, his construction financing would remain outstanding, tying up capital and limiting his ability to continue developing new projects. Having never worked with a private lender before, he needed a financing partner that could move beyond institutional limitations while supporting his long-term investment strategy.

 The Solution

Lima One Capital structured a $4.173 million DSCR portfolio loan covering all 19 properties, allowing the investor to refinance the construction debt through a single financing solution.

Rather than maximizing leverage, the loan was structured at less than 70% LTV, enabling the borrower to preserve significant equity while securing an interest rate that was even lower than the prevailing forward mortgage rate. The structure maximized monthly cash flow and aligned with the investor’s long-term Build-to-Rent strategy.

 The Outcome

The refinancing allowed the builder to pay off the construction financing, stabilize the portfolio, and preserve both liquidity and equity for future growth.

More importantly, the transaction introduced the borrower to the flexibility of private lending. What began as a financing challenge became the start of a long-term relationship and provided a scalable capital solution to support future Build-to-Rent acquisitions and developments.

 Key Takeaways

• Bank lending limits don’t have to stop portfolio growth. Private lending can provide flexible alternatives when institutional credit capacity is exhausted.
• The right loan structure is more important than maximum leverage. Preserving equity while optimizing cash flow can create a stronger long-term investment.
• Portfolio financing simplifies execution. Financing multiple properties under one loan can improve efficiency and streamline portfolio management.
• Private lending creates new growth opportunities. For many experienced investors, it becomes an additional source of capital rather than a replacement for traditional banking.