Bismarck grows mostly to the north and northeast, with Lincoln and Mandan adding their own subdivisions. Local investors build spec homes, twin homes and small rental buildings on those new streets, working within a short and busy building season.
In short: LendingStreet finances ground-up construction of 1-8 unit investment properties in Bismarck, Mandan and Lincoln, including spec homes, build-to-rent twin homes and townhomes, infill duplexes and fourplexes, and small 5-8 unit buildings. Loans are sized on loan-to-cost with terms set per project, and funds are released through draws after inspections. Plans, permits, budget and builder experience decide approval.
Spec homes are the most common investor project in north and northeast Bismarck, where new subdivisions keep opening. Ranch-style homes with finished or finishable basements and attached garages are the core product, priced for families relocating for healthcare, government and energy jobs.
Build-to-rent twin homes and townhomes are popular in Lincoln and Mandan, where lots cost less. Small four- to eight-unit buildings go up where zoning allows, usually near arterial roads. Infill is possible in older parts of Bismarck and Mandan, but lots are scarce.
Lincoln, just southeast of Bismarck, has grown quickly and offers lots at lower prices than north Bismarck. Mandan's newer subdivisions on its south and west sides offer similar opportunities, with their own city rules and specials.
We size the loan as a share of total project cost, which includes land, hard costs and soft costs such as plans, permits, surveys, utility connections and fees. Your equity covers the rest, and land you already own can often count toward it. Terms are set per project.
We review the builder closely. Borrowers with completed projects or an experienced general contractor qualify most easily. Projects without plans or permits, or with no experienced builder, usually do not.
Expect us to review the general contractor's license, insurance and recent work, and to compare your budget with local costs. A contingency line protects the project from changes in material and labor prices during the season.
This example is illustrative and not a quote. An investor buys a lot in a new north Bismarck subdivision for $80,000 and budgets $390,000 in hard costs and $35,000 in soft costs, a total of $505,000. At 80% of cost, the construction loan is $404,000.
Because funds are drawn over time, interest during a 9-month build is estimated at about $19,089, assuming an average balance of about 60% of the loan. The home sells for $615,000. After about $36,900 of selling costs, projected profit is about $54,011 before income taxes.
If the sale takes longer or comes in lower, profit shrinks. Many builders keep a backup plan to rent the home, and running the rental math before you start makes that option real. A finished spec home in a good north Bismarck subdivision often rents well while you wait for a better selling season.
Construction funds are released in stages after an inspection confirms the work. Here is one way to split the hard-cost budget from the example. Our draw schedule calculator lets you model your own project.
Each draw starts with a request and photos, then an inspection. Funds are typically released after approval and any lien waivers are received, so plan your cash to pay subcontractors before each draw arrives.
| Stage | Share of hard costs | Amount |
|---|---|---|
| Excavation, footings and basement | 17% | $66,300 |
| Framing, roof and windows | 28% | $109,200 |
| Rough plumbing, electrical and HVAC | 20% | $78,000 |
| Insulation, drywall and cabinets | 20% | $78,000 |
| Finishes, driveway and final | 15% | $58,500 |
Footings in central North Dakota go deep to get below the frost line, and nearly every home has a full basement. Builders try to excavate and pour foundations between spring thaw and late fall, then close the home in before deep cold. Winter work is possible with heat and protection, but it costs more.
Schedule your loan term with this in mind. A project that starts in late fall may sit for weeks before foundations can be poured, adding interest and pushing the sale into a different season.
Ask your builder about winter heat, snow removal on the site and how they protect concrete and framing. These costs belong in the budget, not as surprises halfway through the project.
New lots in Bismarck, Lincoln and Mandan often carry special assessments for streets, water, sewer and storm drainage. Ask the city for the balance and the annual installment before you buy, because buyers and appraisers will see it and renters' DSCR math depends on it. Confirm utility connection fees and timing too.
Utility timing matters too. A finished home cannot be occupied without water, sewer, gas and electric connections, so confirm who installs each one and how long it usually takes in your subdivision.
Lots near the Missouri River, the Heart River or local creeks may sit in mapped flood zones, where floor elevation rules and flood insurance apply. Check the FEMA map and city requirements before you buy, and budget for fill and engineering if needed.
Lots outside mapped flood zones usually avoid these costs, which is one reason they sell for more. Factor the difference into your land price.
Spec homes sell to local buyers and relocating families, mostly in spring and summer. Build-to-rent projects refinance into DSCR loans once leased. With twin homes, you can sell one side and keep the other. Run the sale and rental numbers before you break ground, using recent local sales and leases.
Twin homes also lend themselves to phased plans. Some investors build a pair, sell one side and use the profit toward the next lot, while keeping the other side as a long-term rental with a DSCR loan.
Send plans, permit status, a line-item budget, the builder's experience and your exit plan. Our investor loans are business-purpose loans on non-owner-occupied property. Call (877) 298-1001 or use the form below.
If you are early in planning, send what you have. We can tell you what a complete file needs and how loan-to-cost sizing would work on your budget before you commit to a lot.
Spec homes, build-to-rent singles, twin homes, townhomes, duplexes, fourplexes and small 5-8 unit buildings.
On loan-to-cost, covering a share of land, hard and soft costs, with terms set per project.
Often, yes. Land value can count toward your share of the cost.
Ideally early enough to pour foundations before the ground freezes. Winter work is possible but costs more.
By draw, after an inspection confirms each phase is complete.
Yes. They affect your budget, your resale price and any rental DSCR.
It helps. An experienced general contractor can make up for a limited track record.
Yes, into a DSCR loan once the property is leased.
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