Capital Kings LLC

Can I buy the lot and build with one construction loan?

Yes, and it usually beats paying cash for the lot first. On a $150,000 lot and a $350,000 build with one finished build, our 95% of cost option (the Financed Interest Reserve) pays $105,000 toward the lot at closing, the loan is $475,000 at 9.50%, and your cash in the deal is $78,326. Buy the lot with cash first and the loan drops to $367,454, your cash in the deal rises to $173,869, and you pay for two closings.

Get my real numbers →See every dollar

Prefer to talk it through? Call or text Micah at (281) 636-5682.

Reviewed by Micah Foster, Founder & CEO · October 2026

Rates as of October 2026

$150,000 lot, $350,000 build, 745 credit, 1 finished build

Lender pays toward the lot at closing

$105,000

Total loan, 95% of cost$475,000
Your cash in the deal$78,326

At a glance

The deal, in pictures

The same build, two ways to buy the lot

Lot and build on one loan

Loan$475,000

Lender pays toward the lot$105,000

You pay toward the lot$45,000

ClosingsOne

Your cash in the deal$78,326

Lot bought first with cash

Loan$367,454

Lender pays toward the lot$0

You pay toward the lot$150,000

ClosingsTwo

Your cash in the deal$173,869

The 95% of cost option, 1 finished build. The lot-first column leaves out the title and closing bill on the lot purchase itself.

Capital Kings · capitalkings.co · rates as of October 2026

How to close the lot and the loan together

1Get pre-approved
Know your loan size before you sign for the lot.
2Contract the lot
Ask for a 21 to 30 day option period and a financing contingency.
3Plans and budget
Your contractor prices the build line by line.
4Appraisal
The appraiser values the finished house from the plans.
5One closing
The lender pays $105,000 toward the lot. The build money waits for draws.

One title bill, one set of closing costs, and the lot advance is part of the loan.

Capital Kings · capitalkings.co · rates as of October 2026

Cash to close: The money you bring to the closing table: down payment plus every closing cost.
Reserves: Months of payments or interest you show in the bank. They stay in your account.
Draws: Rehab or build money released after each phase is finished and inspected.

In short

The short answer, as of October 2026

The 95% of cost option: the lender pays 70% of the lot ($105,000), you pay $45,000, and the loan makes the interest payments while you build.
Lower Fees: a lower origination, and you pay the monthly interest. The lender pays $75,000 toward the lot and you pay $75,000.
Already own the lot? It counts as your equity, so it still helps.

Capital Kings LLC is a broker, not a lender. We compare every file across 400+ lenders and send the term sheet with every fee on it before you sign.

Worked example

Every dollar, line by line

A $150,000 lot, a $350,000 build and a $700,000 finished value, 745 credit, 1 finished build. The real term sheets:

Cash to close$75,763

Proof of funds to show$78,326

Where the $75,763 goes

Land down paymentEquity$45,000
Appraisal feeAppraiser$550
Prepaid interestLender$410
Origination and lender feesLender$17,740
Broker feeBroker$4,750
Closing / titleTitle co$4,683
Builder’s risk insurance (estimate)Insurer$2,630

The lender pays $105,000 toward the lot at closing and the $347,437 build money goes out in draws. Proof of funds adds $52,500 to start the build and $22,563 of interest, money that stays in your account. The gold broker line is the only money Capital Kings earns.

A sample sheet for a made-up borrower, built the same way yours is. Yours takes about five minutes and doesn’t pull your credit.

The numbers

Compare the options

The same build closed two ways, on both loan structures. The 95% of cost option lends about 90% of the lot and build in cash (95% with the interest reserve included) at 9.50%, with higher fees. Lower Fees lends 85% at 10.49% with a lower origination.

The 95% of cost option: one loan vs lot first

	Lot and build on one loan	Lot bought first with cash
Total loan	$475,000	$367,454
Lender, toward the lot	$105,000	$0
You, toward the lot	$45,000	$150,000
Cash to close on the construction loan	$75,763	$23,869
Build cost you cover	$2,563	$0
Your cash in the deal	$78,326	$173,869
Closings you pay for	One	Two, the lot and then the loan
Rate	9.50%	9.50%

$150,000 lot, $350,000 build, $700,000 finished value, 745 credit, 1 finished build. "Your cash in the deal" is the lot cash, cash to close and any build cost the loan leaves to you. The cash-first column does not include the title and closing bill on the lot purchase itself. Rates as of October 2026.

Lower Fees: one loan vs lot first

	Lot and build on one loan	Lot bought first with cash
Total loan	$425,000	$350,000
Lender, toward the lot	$75,000	$0
You, toward the lot	$75,000	$150,000
Cash to close on the construction loan	$96,989	$17,480
Build cost you cover	$0	$0
Your cash in the deal	$96,989	$167,480
Closings you pay for	One	Two, the lot and then the loan
Rate	10.49%	10.49%

Price my deal →Size your build on the construction page Construction loans by state

How it works

Good to know

A ground-up loan is sized on the lot plus the build. When the lot closes inside the loan, most of the lot price is financed: $105,000 of the $150,000 here on the 95% of cost option. When you pay cash for the lot first, the loan funds the build only and the lot sits in the deal as your equity.

That is why we tell investors to close the lot with the construction loan when they can. On the 95% of cost option the loan is $107,546 bigger, $95,543 more of your cash stays in your account (before the lot purchase’s own closing bill), and you pay title and closing costs once.

The 95% of cost option opens after one finished build. On a first build, with a general contractor who has 5+ finished builds, the lot still closes inside the loan, with a smaller share of the cost financed.

Buying the lot first is not a deal breaker. If a seller will not wait, buy it, and the lot counts toward your side of the construction loan. You just leave more cash in the deal.