Riverside still has what the coast ran out of: buildable infill lots, larger parcels in the county and a steady rental market for new homes. The costs that surprise new builders here are not lumber and labor. They are fees, fire-safety requirements and utility connections.
In short: LendingStreet finances ground-up construction of 1 to 8 unit investment properties in Riverside and Riverside County, including spec homes, build-to-rent houses, homes with ADUs, 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 in draws after inspections. Approved plans and permits, a realistic budget and an experienced builder or general contractor are what get a project approved.
Inside the city, builders put new single-family homes and duplexes on infill lots in Arlington, La Sierra, the Eastside and Casa Blanca, often with a detached ADU. Larger lots in Jurupa Valley, unincorporated areas near Mead Valley and Woodcrest, and parts of Perris, Menifee and Lake Elsinore support single homes and small build-to-rent clusters.
Build-to-rent appeals here because new homes lease well to families priced out of buying, and newer construction usually brings lower maintenance and easier insurance than a 1960s home.
Lot selection drives the budget. A flat infill lot on an existing street with sewer and water at the curb is far cheaper to build on than a rural parcel that needs a septic system, a well or a long utility extension. Before you buy land, ask the city or county planning counter what the zoning allows, whether the lot is buildable as-is, and what off-site improvements might be required.
New residential construction in Riverside County carries development impact fees, school district fees and, in western Riverside County, a regional transportation fee. Water and sewer connection charges can be significant, especially where a lot needs a new lateral or meter. The City of Riverside's own utility, Riverside Public Utilities, handles electric and water service inside city limits, and connection timing should be in your schedule.
If your lot is in a Community Facilities District, a Mello-Roos special tax will apply to the finished home. That matters to resale buyers and to a DSCR refinance.
This example is illustrative and not a quote. A builder buys an infill lot in Riverside for $190,000 and plans a 2,000 square foot home with a detached ADU. Hard costs are $430,000 and soft costs, including plans, permits, fees and connections, are $85,000, for a total of $705,000.
For illustration, the loan is sized at 80% of cost, or $564,000, and the builder contributes $141,000. Interest accrues only on funds drawn, about $29,857 over an 11-month build. The finished property is estimated at $790,000. If the builder holds it, the main house at $3,100 and the ADU at $1,700 support a DSCR refinance at 70% of value with a ratio near 1.04x, assuming the ADU rent counts under the program.
| Budget line | Amount |
|---|---|
| Infill lot | $190,000 |
| Hard costs: 2,000 sq ft home plus detached ADU | $430,000 |
| Soft costs: plans, engineering, permits, impact and school fees, utility connections | $85,000 |
| Total project cost | $705,000 |
| Loan sized at 80% of cost (illustrative) | $564,000 |
| Borrower equity | $141,000 |
| Estimated interest over 11 months on drawn funds | $29,857 |
| Estimated completed value | $790,000 |
Parts of Riverside and much of the surrounding hill country are mapped as fire hazard severity zones. New homes in these areas must meet California's wildland-urban interface building standards, including ignition-resistant roofing, vents, siding and eaves, plus defensible space. Those requirements add cost, and insurance for both the builder's risk policy and the finished home can be harder to place.
Check the lot's fire zone on the state map before you buy, and get builder's risk and permanent insurance quotes early.
California's energy code generally requires solar on new low-rise residential buildings, along with efficient envelopes and systems. Budget for the solar system and any battery-ready wiring. In the Inland Empire heat, buyers and renters value good insulation and efficient air conditioning, so those costs tend to show up in rent and resale value.
Funds are released in stages after inspections: site work and foundation, framing, rough mechanical, electrical and plumbing, insulation and drywall, finishes and final. Use our construction draw schedule calculator to see how the balance and interest grow.
A simple single-family home in the Inland Empire can take under a year once permits are issued, but plan check, utility connections and final inspections often extend the schedule.
Summer heat affects concrete pours, roofing and crew schedules in the Inland Empire, and the rainy season can delay grading. Experienced local builders plan around both, and a schedule that reflects them is easier to finance.
We look for builders or borrowers with completed ground-up projects. A borrower without a build track record can still qualify when paired with an experienced, licensed general contractor and a detailed contract. Projects without plans or permits, or without an experienced builder, usually do not qualify.
Expect us to ask for the contractor's license, insurance, a list of recent completed homes and references. On build-to-rent projects, we also want a realistic rent estimate for the finished home, supported by recent leases on newer homes nearby, so the long-term refinance is part of the plan from the start.
Spec homes are typically sold on completion. Build-to-rent owners refinance into a DSCR loan qualified on the new leases. New construction is generally exempt from the state's Tenant Protection Act rent caps for 15 years, which some holding owners factor into their plans; confirm details with counsel. If you build several homes, a blanket portfolio loan can combine five or more rentals later.
Send the parcel, plans and permit status, budget and builder details through the form below, or call (877) 298-1001. We will review costs, set up draws and outline what the project needs. See our California construction page for statewide terms.
Yes. We finance ground-up spec homes and build-to-rent projects of 1 to 8 units with plans, permits and an experienced builder.
On loan-to-cost, using land, hard and soft costs. Terms are set per project.
Yes. They are real project costs and should be in your soft cost line.
Yes. Many Riverside projects include a detached ADU. Whether the ADU's rent counts on a later DSCR loan depends on the program and appraisal.
It can still work, but expect added building requirements and harder-to-place insurance. Get quotes early.
California's energy code generally requires solar on new low-rise residential buildings. Budget for it.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
Sell, or refinance into a DSCR loan on the new lease.
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