Most investors lose deals for one of two reasons. They don't have enough cash to get to the closing table, or they don't have enough cash to carry the project once they're in it.
There's a short-term lending structure that attacks both problems at once: origination costs financed into the loan, and no monthly payment during the term. If you've been sizing deals off what's in your operating account today, this changes what you can buy.
Here's exactly how it works, what it costs, and where the tradeoffs are.
1. Rolled-In Closing Costs: Fewer Dollars at the Table
Every short-term loan carries a fee stack at origination — processing, underwriting, and attorney costs. On most programs, that's money you wire at the table.
On this one, those fees can be financed into the loan amount instead. Same for origination points, which are quoted deal-by-deal.
That's a few thousand dollars that stays in your account instead of leaving it — and on a portfolio doing four or five projects a year, that's real working capital. It's not free money; you're borrowing it and paying interest on it. But you're borrowing it at the same rate as the rest of the loan, which is almost always cheaper than the alternative — a credit line, a partner's capital, or not doing the deal.
Where it matters most: investors running two or three projects simultaneously, where every dollar at the table is a dollar not funding the next acquisition.
2. Deferred Payments: No Monthly Debt Service During the Build
This is the bigger lever.
On a deferred-payment structure, you make no monthly payments during the loan term. Interest accrues and is settled at payoff — when you sell, or when you refinance into permanent debt.
Think about what a monthly payment actually is on a rehab or a ground-up. It's cash you feed into a project that isn't producing income yet. You're carrying debt service on an asset with zero revenue, out of pocket, every 30 days, for as long as the build takes. Contractor slips two months, and that's two more payments from your reserves.
Deferred payments move that cost from your monthly cash flow to your HUD at closing — where it gets paid out of proceeds, not out of your account.
Where it matters most: ground-up construction and heavy rehab, where timelines run long and there's no interim income. Also any investor who's been forced to keep a fat carry reserve idle just to service debt.
3. What This Looks Like in Real Numbers
Let's run an experienced sponsor through a renovation purchase both ways.
The deal:
- Purchase price: $300,000
- Rehab budget: $100,000
- Total project cost: $400,000
- ARV: $560,000
- Projected timeline: 9 months
- Assumed rate: 11%
Option A — Monthly Payment Structure
Higher leverage on the initial advance, plus the full $100,000 budget financed — call it a $370,000 loan. Down payment: $30,000.
But you're servicing debt monthly. Average drawn balance over the project runs around $300,000, so roughly $2,750/month — about $24,700 of cash out of pocket over nine months.
Total cash into the deal: roughly $54,700.
Option B — Deferred Payment Structure
A slightly lower initial advance, same $100,000 budget financed — call it a $355,000 loan. Down payment: $45,000.
Monthly carry: zero. Roughly $29,000 of interest accrues and gets paid from proceeds at closing.
Total cash out of pocket during the project: $45,000.
The takeaway: deferred asks for about $15,000 more at the table but saves nearly $25,000 in carry over the project. Net cash preserved: roughly $10,000 — and more importantly, it's cash you keep liquid the whole way through, instead of bleeding it out monthly while you wait on a certificate of occupancy.
If your project runs long, the gap widens in favor of deferred. If you're tight at the closing table but flush on monthly cash flow, monthly-pay is the better fit. That's the whole decision.
4. The Tradeoffs — Read This Part
I'm not going to pretend deferred is free. Three things to understand:
Leverage. Deferred payment structures carry lower maximum leverage than monthly-pay across most products — meaningfully lower on bridge, modestly lower on renovation. You're trading leverage for cash flow relief. On a thin-margin deal, that trade can be the difference between penciling and not.
Experience requirements. Deferred payments on ground-up construction and heavy rehab sit behind a higher completed-project hurdle than monthly-pay does. First-time and second-time builders will generally need the monthly-pay track on ground-up and step into deferred once they've got a few completions behind them.
Liquidity. Deferred structures on new construction and heavy rehab carry a reserve requirement tied to the construction budget — on top of cash to close. Monthly-pay reserves are tied to loan amount instead, and generally land lighter. Checking, savings, money market, brokerage, and 1031 funds count in full; retirement accounts count at a discount.
Reserves are a demonstration requirement, not a deposit. You're proving you can absorb an overrun, not handing the money over. But if you can't show it, you can't use the structure.
5. Who Qualifies
Broad strokes on the program:
- Business purpose only. New construction, rehab, and bridge. Owner-occupied and consumer-purpose loans are not eligible.
- Entity borrower. Domestic LLC, corporation, or partnership in good standing with an EIN. No trusts, no foreign entities.
- Credit. 640 minimum FICO for the qualifying principal, 500 minimum for any guarantor, with at least two tradelines seasoned 12+ months.
- Background. Two-year clean lookback on bankruptcy, foreclosure, and adverse judgments. Five-year lookback on fraud-related felonies.
- Guaranty. Required from anyone owning 33% or more.
- Collateral. 1–4 unit residential, townhomes, warrantable condos, ADUs, and residentially zoned vacant land. Minimum $75,000 as-is value and $75,000 loan amount ($100,000 minimum on land-only).
- Footprint. 40+ states including all of New England.
6. How to Use This
The move isn't "always take deferred." The move is knowing which structure fits the deal in front of you before you make the offer — because it changes what you can bid.
Quick decision framework:
- Long timeline, no interim income, a track record behind you → deferred is likely the stronger structure.
- Tight on cash at the table, comfortable monthly cash flow → monthly-pay buys you meaningful additional leverage.
- First or second ground-up → monthly-pay is your entry point; deferred opens up once you've got completions behind you.
- Either way → roll the origination costs. There's rarely a good reason to wire fees you can finance at loan rate.
Let's Price Your Deal
I'm Chris Sava, founder of Hub Financing. I place ground-up construction, bridge, fix-and-flip, DSCR rental, multifamily, condo conversion, and land debt for real estate developers and investors — primarily across New England, and nationwide when the deal calls for it.
I've spent roughly seven years in private lending, including time on the credit and underwriting side of a national construction lender. That means when I quote you, I'm telling you what will actually get through committee — not what looks good in an email.
There's no borrower-side broker fee. I'm compensated by the lender at closing. You get access to the full lender network at the same pricing you'd get going direct, without spending three weeks finding out which lender will actually do your deal.
Send me the address, the purchase price, the budget, and the ARV. I'll come back with structure options — both payment tracks — so you can see the cash impact side by side before you commit.
Chris Sava | Hub Financing, LLC 25L Inn Street, Newburyport, MA 01950
chris@hubfinancing.com | 978-417-9325 hubfinancing.com
Hub Financing, LLC is a commercial mortgage broker arranging financing through third-party lenders. Business-purpose loans only. Terms, leverage, and pricing are subject to lender underwriting, appraisal, and final credit approval, and are subject to change. Figures in this article are illustrative examples, not quotes or commitments.