Ruben Izgelov, CEO and Founder of We Lend, says the company's loan portfolio is increasingly dominated by construction projects that go far beyond standard renovations, a trend he expects to continue through the rest of the year. We Lend, a private direct lender historically known for financing quick turnaround fix-and-flip loans in New York, has evolved to fund ground-up construction, condo conversions, and vertical and horizontal building extensions across New York and New Jersey.
According to Izgelov, the standard fix-and-flip model—buying a property, investing $50,000 to $100,000 in cosmetic work, and reselling—no longer generates the returns it once did. Rising costs and tighter margins have pushed investors toward larger, more involved projects. “Our borrowers’ returns have been compressing,” Izgelov said. “The general fix and flip model doesn’t work as much as it used to, so investors have had to get creative, and that requires heavier, more substantial construction and rehab work.”
The shift is evident in the numbers. Izgelov noted that construction budgets on deals from We Lend have grown from the $100,000 to $200,000 range into the $1 million to $2 million range, and in some cases, the construction budget now exceeds the purchase price of the property itself. This change reflects a broader trend in real estate investing, where higher capital requirements and longer timelines are becoming the norm.
We Lend manages the increased risk of larger projects by staying focused on markets it knows well and requiring documentation that many lenders skip. Before financing a conversion or extension, the firm requires an architect’s letter confirming the work can proceed as of right, without rezoning or variance applications. On larger jobs, the company also requires general contractors to sign completion guarantees. “We want GCs committed to the project just as much as the borrower is, without having to personally guarantee the loan. They’re guaranteeing that the project gets completed,” Izgelov said. “That keeps the playing field level between the borrower and the GC, especially when the borrower hasn’t worked at this scale before.”
Two recent deals illustrate the range of projects We Lend now finances. In one, a borrower purchased an eight-unit bank-owned property after a previous lender declined financing for improvements. We Lend provided a loan to convert the building into 16 fully leased units, and the borrower is now in discussions with banks about a refinance that would return original equity for the next project. In another deal in an affluent New Jersey suburb, a borrower was near completion of a 22,000-square-foot spec home when a lot line sale required paying off an existing private loan. We Lend restructured and refinanced the loan, providing the payoff and additional funds to finish construction.
Izgelov advises borrowers transitioning from fix-and-flips to larger projects to carefully plan for longer timelines. A typical fix-and-flip loan runs six to eight months, but ground-up construction, major conversions, and extensions often take much longer. “Budget carefully for the interest that has to be paid over that term,” he said. “Built-in extension options with your lender help, or better yet, start with a term longer than 12 months. We offer 18-month terms, and we’ve done at least one loan at 24 months.” He also warned against building to a trend rather than demand, emphasizing that investors should not build mega mansions in neighborhoods that cannot support them just because that is the current trend.
More information on how We Lend structures its loans is available on the company’s How It Works page.
