Columbia's growth runs outward along I-20, I-26 and I-77, into Lexington County, Blythewood and Elgin, while infill lots near USC and downtown attract small multi-unit builds. For investors who plan to hold, the finished property's tax bill at the 6% assessment ratio is the number to get right.
In short: LendingStreet finances ground-up construction on 1-8 unit residential investment projects around Columbia, SC, including spec homes, build-to-rent houses, 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 a draw schedule after inspections. Approved plans, permits, a realistic budget and an experienced builder are required.
Spec homes and build-to-rent houses go up in Lexington County, around Lexington, Chapin, Gilbert and Red Bank, and in northeast Richland around Blythewood. Elgin and the western edge of Kershaw County have seen steady new construction as well. Infill duplexes, townhomes and small buildings are built near USC, in Rosewood and along corridors close to downtown where zoning allows more than one unit.
Land costs are moderate compared with many Southeast metros, but sewer availability, road access and stormwater requirements vary widely from one parcel to the next.
The City of Columbia, Richland County, Lexington County, Kershaw County and towns such as Lexington, Irmo, Cayce, West Columbia and Blythewood each run their own planning and permitting. Some require stormwater plans on smaller sites, and utility capacity can be a gating item in fast-growing areas. Confirm zoning, water and sewer service and any impact or tap fees before you buy a lot. We need approved plans and permits, or a clear path to them, before construction funds move.
Utility tap fees and stormwater requirements can differ sharply between a town and the unincorporated county next to it, so price them for the exact parcel, not the area in general.
A newly built rental is assessed at the 6% assessment ratio once it is complete, and owner-occupant exemptions do not apply. The first tax bill after completion may reflect only part of a year or only the land, which can make a project look cheaper to hold than it is. Budget the DSCR refinance on a full-year bill at the completed value.
That one line often decides whether build-to-rent works at full leverage or needs a little more equity.
This example is illustrative and not a quote. An investor builds a side-by-side duplex in Lexington County. The lot costs $70,000, hard costs are $380,000 and soft costs, including plans, permits, tap fees and surveys, are $35,000, for a total of $485,000. For illustration, the loan is sized at 80% of cost, or $388,000, and the investor contributes $97,000.
When finished, each unit leases for $1,800, for $3,600 a month, and the duplex appraises at $560,000. With a full-year tax bill of $610 a month and insurance of $190, a 75% LTV refinance of $420,000 has a payment near $3,737 and a DSCR of about 0.96x. At 70% LTV, the loan is $392,000, the payment is about $3,541 and the DSCR is about 1.02x.
If the ratio at your target leverage falls short, the fixes are the same ones that apply to any rental: a slightly lower refinance amount, a bit more equity during construction, or a design that adds rent, such as an extra bedroom per unit. Make those choices on paper before the foundation goes in.
| Item | Amount |
|---|---|
| Lot | $70,000 |
| Hard costs | $380,000 |
| Soft costs | $35,000 |
| Total cost | $485,000 |
| Loan at 80% of cost (illustrative) | $388,000 |
| Refinance at 75% / DSCR | $420,000 / 0.96x |
| Refinance at 70% / DSCR | $392,000 / 1.02x |
Draws are released after an inspector verifies each stage. For the duplex above, a five-draw schedule might look like this. Use our draw schedule calculator to model your own project.
Spec builders in Chapin, Lexington and Blythewood sell mostly to families drawn by school districts and newer subdivisions. Underwriting looks at your cost, the expected sale price based on recent new-construction sales nearby, and how long similar homes have taken to sell. Builders with a record of completed sales get the best terms.
Spec homes in established school districts tend to sell faster, but they also compete with production builders. Know what the large builders nearby are charging and what incentives they offer before you set your price.
We look for a licensed, experienced general contractor and, ideally, a borrower with completed builds. Projects without plans or permits, or a first-time builder without an experienced contractor, usually do not qualify. A line-item budget, a schedule and proof of equity, often in the form of the lot, make a file much stronger.
Builders who have recently closed out permits with the same jurisdiction usually move faster through inspections.
Infill projects close to the center of Columbia are different from suburban builds. Lots are smaller and often have older utility connections, mature trees, and neighbors who pay attention to what goes up next door. Some sit in historic or conservation districts where new construction needs design review, and many are in zones where the number of units and unrelated occupants is limited.
The payoff is rent. Duplexes and townhome-style rentals within reach of USC, the Vista and the hospitals can command rents that suburban new construction cannot. Confirm the legal unit count, parking requirements and any design approvals before you buy the lot, and price site work, tree protection and utility upgrades into the budget.
LendingStreet finances investor construction across the Midlands. Our investor loans are business-purpose loans on non-owner-occupied property. Send plans, permits, budget, lot details and your builder's background through the form below.
On loan-to-cost, a share of land, hard and soft costs, with terms set per project.
It sets the tax bill on the finished rental, which is part of the DSCR payment at refinance. Budget a full-year bill at completed value.
Yes, along with Richland and Kershaw counties.
If zoning allows it and you have approved plans and permits, yes.
You complete a stage of work, an inspector verifies it and that part of the budget is released.
Usually only with an experienced licensed general contractor.
You sell, or lease and refinance into a DSCR loan based on the rent.
Yes. Spec homes are underwritten on the expected sale price, your cost and the build schedule, with funds released in draws.
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