Bakersfield has something most of California lacks: buildable lots at prices that still leave room for a builder's margin. Infill lots near older neighborhoods and parcels on the growing edges of the Northwest and Southwest make spec homes and build-to-rent duplexes realistic.
In short: LendingStreet finances ground-up construction of 1-8 unit investor properties in Bakersfield and Kern County, including spec homes, build-to-rent homes, infill duplexes and fourplexes, and small 5-8 unit buildings. Loans are sized on loan-to-cost, terms are set per project, and funds are released through a draw schedule after inspections. Plans, permits, a realistic budget and builder experience drive approval.
Investor construction here tends to fall into three types. Each has a different buyer or tenant at the end.
The local appeal is the gap between land cost and finished value. That gap is narrower than it looks once impact fees, utility work and energy code requirements are added, so test every project with a full budget before buying the lot.
| Project type | Where it shows up | Typical exit |
|---|---|---|
| Spec single-family home | Infill lots in established neighborhoods, edges of the Northwest and Southwest | Sale to an owner-occupant buyer |
| Build-to-rent home or duplex | Older neighborhoods with lots zoned for two units | DSCR refinance on rent |
| ADU or lot split additions | Larger lots under California ADU and SB 9 rules | Sale or long-term rental |
| Small 5-8 unit building | Multi-family zoned parcels near downtown and the colleges | DSCR refinance; max LTV varies |
This example is illustrative and not a quote. An investor buys an infill lot for $95,000 and plans a two-unit build with $430,000 of hard costs and $48,000 of soft costs for plans, permits, impact fees, utilities and insurance. Total cost is $573,000.
At 80% of cost the loan is $458,400, and the investor brings about $114,600, often partly through the land. Interest is charged on the amount drawn, not the full loan, so carrying cost rises as the project progresses.
Each draw is released only after an inspector confirms the stage is complete. Keep receipts, lien releases from subcontractors and photos for each request, and expect the final draw to wait for the certificate of occupancy.
Interest on the drawn balance is usually small in the first months and largest near the end. Carry a cash cushion for the period between completion and either a sale or the DSCR refinance.
| Draw | Share of cost | Released after inspection |
|---|---|---|
| Foundation and slab | 15% | $85,950 |
| Framing and roof | 25% | $143,250 |
| Rough MEP and insulation | 20% | $114,600 |
| Drywall and finishes | 25% | $143,250 |
| Final and certificate of occupancy | 15% | $85,950 |
Projects inside city limits go through City of Bakersfield development services; unincorporated areas such as Rosedale outskirts, Oildale and Lamont go through Kern County. Both require full plans, engineering and fees before work starts, and the timeline varies with the project.
Budget for impact and school fees, utility connections, and any required street or sidewalk work. These can be a large share of soft costs on a small project.
Kern County and the city both review grading and drainage on new lots. Infill parcels near older neighborhoods may also need new sewer or water laterals, and some older streets lack curbs and sidewalks that a new permit can require you to build.
California's energy code requires efficient building envelopes and, for most new homes, rooftop solar. Plan for these in the hard cost budget from the start rather than as change orders.
Summer heat also affects scheduling. Concrete pours, roofing and exterior work are often scheduled for early mornings, which can stretch timelines. Build some slack into your draw schedule.
California's ADU laws and SB 9 allow additional units on many single-family lots. On larger Bakersfield lots, that can mean building a second home or an ADU behind an existing rental. Rules on setbacks, parking, owner occupancy and lot splits change and differ by project.
We can finance qualifying ground-up units on investor properties. Confirm with the city or county what your lot allows before you design.
ADU projects often look cheaper than they are. Utility upgrades, sewer connections and separate meters can add significant cost, so include them in the budget from the beginning.
We look for builder experience. A borrower with no build history can sometimes qualify by hiring an experienced, licensed general contractor. Projects without plans or permits, or with no experienced builder involved, usually do not qualify.
Lot value, location and the strength of the exit also matter. A spec home needs sales comparables; a rental needs rent comparables.
We also look at your liquidity. Construction projects run over budget, and lenders want to see that you can cover overruns and carrying costs without stopping work.
For build-to-rent projects, the exit is a DSCR loan qualified on rent once the property is complete and leased. New construction is generally exempt from AB 1482 rent caps for its first 15 years, which some investors factor into a hold strategy; confirm with counsel.
Use our draw schedule calculator to plan cash flow, and see the California construction page for statewide context.
Plan the rent assumption from nearby newer rentals rather than older stock, since new construction usually leases at a premium.
Send plans, the budget, the lot details and your builder's resume. Call (877) 298-1001 or use the form below for a quote.
Most Bakersfield spec homes sell to local families, often with government-backed financing that requires the home to appraise and meet property standards. Design to that buyer: practical floor plans, efficient cooling, garages and low-maintenance yards usually matter more than luxury finishes.
Pull sales comparables of newer homes in the same part of town. A spec home on an infill lot near older housing may not sell at the same price as a similar home in a new Northwest subdivision.
On loan-to-cost, which includes land, hard costs and soft costs. Terms are set per project, depending on the plans, budget, location and builder experience.
You or your builder request funds as work is completed. After an inspection confirms progress, the draw is released. Interest accrues on the amount drawn.
Generally you need approved plans and issued permits, or a clear path to them. Projects without plans or permits usually do not qualify.
Often yes under California ADU law, if the lot and local rules allow it. Check setbacks and utility capacity with the city or Kern County first.
Sometimes, if an experienced licensed general contractor is running the project. A borrower with no build track record and no experienced contractor usually does not qualify.
Yes, small 5-8 unit residential buildings qualify. Nine or more units is a commercial project.
New construction is generally exempt from AB 1482 for 15 years. Rules can change, so confirm with a California landlord attorney.
Land, hard construction costs and soft costs such as plans, permits, fees and insurance. Your equity covers the part of total cost the loan does not.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
By clicking, you provide express written consent to be contacted by LendingStreet (NMLS #1734316) via SMS, phone, or email, possibly using automated technology, regarding your loan inquiry. Reply STOP to opt out. Consent is not required to obtain services. See our Privacy Policy and Terms.