St. Louis has thousands of vacant lots on blocks of solid brick homes. For small builders, a new home or two-family on one of those lots can be a strong project in the right neighborhood.
In short: LendingStreet finances ground-up construction in St. Louis and St. Louis County for investors building 1 to 8 units, including infill homes, two-families, townhomes and small 5-8 unit buildings. Loans are sized on loan-to-cost with terms set per project, and funds are released through inspected draws. Lot sourcing, neighborhood comparables and design rules on brick blocks are what we look at first.
Infill projects appear in Botanical Heights, The Grove, Forest Park Southeast, Tower Grove South, Shaw, Fox Park, Benton Park and areas near Saint Louis University and the medical campus. Demand comes from hospital, university and downtown workers.
In St. Louis County, spec builders work in suburbs such as Kirkwood, Webster Groves and Maplewood, each with its own permitting.
St. Louis values vary sharply between neighborhoods and even between blocks. A new home in Botanical Heights or Forest Park Southeast can sell well, while similar homes elsewhere may face thin comparable support. Check recent new-build sales in the immediate area and compare them with your total cost. St. Louis County suburbs have more consistent comparables but higher land prices and their own permit offices.
Common St. Louis 1-8 unit projects: Each type has its own exit and its own local issues.
| Project type | Where it is common | Local note |
|---|---|---|
| Infill single-family | Botanical Heights, Forest Park Southeast | Sale exit |
| New two-family | Tower Grove South, Fox Park | Rental exit into DSCR |
| Small 5-8 unit building | Near SLU and the medical campus | Zoning review |
| Suburban spec | Kirkwood, Webster Groves | Sale exit |
Permits run through the city's Building Division. Many vacant lots are held by the Land Reutilization Authority, which sells them to buyers with a plan to build. Historic districts and some neighborhoods have exterior design standards, and brick is common.
Missouri does not have a real estate transfer tax. Title and recording costs still apply.
The city and the county are separate jurisdictions in Missouri, so a lot in the City of St. Louis and a lot in Kirkwood or Maplewood follow different codes, fees and inspection schedules. Sewer connections across the region are handled by the Metropolitan St. Louis Sewer District, which has its own review and fees.
Vacant lots may have old foundations, debris or utility stubs that need removal. Some areas sit over old mines or have soils that need engineering. Lots near the river may be in flood zones.
Construction loans are sized on loan-to-cost (LTC): the loan as a share of the total project budget, including land, hard costs, soft costs and contingency. Terms are set per project, so the percentage depends on the plans, the budget, the location and your experience.
The finished value matters too. A St. Louis budget that works on cost but leaves little margin against the expected sale price or appraised value will usually be sized down, because the exit has to work.
This example is illustrative and not a quote. An investor builds a new home in Botanical Heights to sell on completion. Land costs $35,000, hard costs are $390,000, soft costs are $45,000 and the contingency is $18,000, for a total project cost of $488,000.
At a sample 80% loan-to-cost, the loan is $390,400 and the investor puts $97,600 into the project. Most of the loan funds through draws as work is completed.
If the finished property sells for $560,000 in total and selling costs run about 6%, or $33,600, net proceeds of $526,400 repay the $390,400 loan and leave $136,000 before interest and carrying costs, against $97,600 of cash invested.
| Item | Amount |
|---|---|
| Land | $35,000 |
| Hard construction costs | $390,000 |
| Soft costs (plans, engineering, permits, fees) | $45,000 |
| Contingency | $18,000 |
| Total project cost | $488,000 |
| Loan at a sample 80% LTC | $390,400 |
| Investor cash in the project | $97,600 |
| Sale price | $560,000 |
| Selling costs at about 6% | $33,600 |
| Left after repaying the loan, before interest and carry | $136,000 |
Each draw follows an inspection. When a stage is finished, you request funds, an inspector verifies the completed work and the money for that stage is released to keep the job moving.
A draw schedule that matches the real sequence of a St. Louis build avoids cash gaps. Front-loaded schedules and vague line items slow approvals, so tie each draw to work an inspector can see.
A complete package gets a faster, clearer answer. Lenders generally pass on projects without plans or permits, and on borrowers with no build track record and no experienced general contractor.
If you are newer to building, pairing with a general contractor who has finished similar St. Louis projects can make the difference. Their resume, licenses and recent projects become part of your file.
Every construction loan needs a clear exit. Spec builders sell the finished property. Build-to-rent investors lease it up and refinance into a DSCR loan that qualifies on the property's rent, with no W-2s or tax returns, a 620 minimum credit score, LLC borrowers standard and 30-year terms available.
If a sale takes longer than planned, a leased property can still refinance into a DSCR loan, so it helps to design a home that would also rent well in St. Louis.
Our investor loans are business-purpose loans on non-owner-occupied property. Send your St. Louis plans, budget and land details through the form below, or call (877) 298-1001, and we will come back with how the project can be sized.
Yes. The Land Reutilization Authority sells many vacant lots to buyers with a plan to build. Its requirements and timelines apply.
No. Missouri does not have a real estate transfer tax. Title, recording and lender costs still apply.
Yes. We finance investor construction across the metro, subject to plans, permits, budget and builder experience.
Yes. Once leased, it can refinance into a DSCR loan that qualifies on rent, with 30-year terms available.
In most cases, yes, or approved plans with a clear path to permit. Projects without plans or permits usually do not qualify.
Through a draw schedule. Each stage of work is inspected before funds for that stage are released.
Yes. Small 5-8 unit buildings are part of our residential construction program. Buildings of 9 or more units are commercial.
No. Our investor loans are business-purpose loans on non-owner-occupied property.
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