Build-to-Rent Financing: Key Insights from the IMN BTR Conference

Build-to-rent financing typically involves construction loans, bridge debt, and alternative capital structures designed to fund purpose-built rental communities. The Kiavi team recently attended IMN's Single-Family Rental Forum (East) in Nashville—here are the key takeaways that could help you scale your BTR investment strategy.

Quick Summary

• Private Lending's Position: Private credit may offer a competitive edge over traditional banks, often delivering faster closings and greater flexibility on construction products.
• Sponsor Quality: Other IMN panelists pointed out that with equity investors pausing due to legislative unpredictability, lenders are prioritizing experienced and resilient sponsors.
• Flexible Financing: Developers holding assets longer could benefit from extended bridge terms and revolving construction structures.
• Technology Advancements: Automated underwriting may significantly reduce loan processing times, helping you access capital faster.

The IMN Build-to-Rent (BTR) Spring Forum recently brought together over 800 senior homebuilders, developers, and real estate investors in Nashville. The central focus of the event was clear: turning capital into communities. From dynamic panel discussions to targeted networking spaces like the Women in BTR Meeting, the forum provided a platform to share ideas and establish meaningful relationships.

Amidst the broader event discussions on market sentiment and policy changes, one panel centered specifically on emerging capital sources. Here are the key takeaways for real estate investors looking to adapt to the current market.

Understanding the Modern BTR Financing Vacuum

In recent years, traditional banks provided the bulk of capital for real estate development. However, shifting market conditions have caused many institutions to pull back—potentially creating a significant financing gap for builders and real estate investors alike.

Private credit stepped in to fill that gap. Alternative lenders recognized the demand for reliable capital and began offering solutions that traditional banks often could not match, including faster closing times and more adaptable draw schedules.

According to speakers at the IMN BTR Forum, private lending has accounted for an overwhelming share of capital over the past few years. While traditional banks are slowly returning, the alternative credit market remains highly competitive—which could ultimately benefit your investment business through compressed spreads and improved terms.

Why Are Traditional Lenders Coming Back?

You might wonder why traditional banks are suddenly showing interest again. As market conditions stabilize, traditional institutions need to deploy capital to generate returns. However, according to IMN speakers, their approach looks very different today than it did in previous cycles.

At the event, speakers observed that traditional banks often prefer to provide leverage to private credit managers rather than originating loans directly. This allows banks to take a first-loss position while letting private lenders do the heavy lifting. By taking this route, banks might achieve better capital treatment while minimizing their operational burdens.

For you, this could mean direct bank loans might still be difficult to obtain. Partnering with a private lender, like Kiavi, could be a more efficient path.

Ground-Up Construction Trends in BTR

Scaling a purpose-built rental community—particularly projects in the 100 to 200 unit range—requires reliable, flexible capital. According to IMN speakers, raising equity may be more challenging in the current environment, with legislative uncertainties and market volatility leading many equity groups to pause on new ground-up commitments until there is greater clarity.

Despite these potential equity hurdles, IMN speakers noted that debt markets remain open and competitive. Bridge debt on stabilized assets has recently hovered around SOFR + 285 with a point, according to IMN speakers. Utilizing flexible debt structures could help keep your projects on track while you wait for optimal exit conditions.

Finding the Right BTR Financing Partner

One key theme at IMN BTR was clear, who you choose as your lending partner matters more than ever. It's essential to work with a lender who understands the nuances of Build-to-Rent (BTR) projects and has the technology to deliver capital quickly and reliably.

Key qualities to look for include:

• Speed and Efficiency: Can your lender close in weeks, not months? A tech-forward platform could make a meaningful difference in a competitive market.
• Construction Expertise: Does your lender specialize in construction financing? An experienced partner may help you navigate project complexities from start to finish.
• Data-Driven Underwriting: A lender using robust data and analytics could provide more accurate valuations and more reliable financing decisions.

[Instantly check your rate with Kiavi online today]

Potential Challenges for Small Builders and Developers

According to IMN speakers, local developers often rely heavily on community banks to fund their projects. In places like South Carolina, some small builders who construct around 200 homes a year are experiencing friction with traditional banks. Strict regulations and slow processing times might hinder their ability to scale.

As a result, many of these developers are transitioning to institutional private lenders. A speaker at the event highlighted that private capital might offer lifetime value for borrowers. If a private lender is able to save you several weeks on a project, you could start leasing or selling units much faster.

How Technology Is Reshaping BTR Lending

Technology is increasingly central to modern lending and may serve as a primary driver of scalability. At the IMN BTR Forum, discussions centered on how automated underwriting and data-driven valuations could shorten the time between project start and closing.

Robert Jayne, Head of Originations, Construction Lending at Kiavi, shared why this shift may be a long-term change for many builders:

"We continue to see builders enter the private credit space for the first time, as regional and community banks pull back or impose restrictive deposit requirements. Once these builders experience the funding speed and structural flexibility of private credit—specifically for complex construction products—they rarely go back to traditional banking. In this market, the ability to close in weeks rather than months is the ultimate competitive advantage."

Key Takeaways for BTR Investors

• The Banking Shift: Traditional lenders are often providing leverage to private credit managers rather than originating loans themselves. By working with a private lender, you might avoid institutional friction and access financing specifically designed for the BTR lifecycle.
• The Importance of Experience: According to IMN speakers, many lenders are prioritizing high-quality sponsors. For investors, a solid track record and clear project plans could be the keys to securing competitive bridge and ground-up construction terms.
• The Speed of Capital: In a market where traditional bank processing times might take months, the ability to secure financing in weeks may be the difference between starting a project on schedule or missing a seasonal construction window.

The Future of Build-to-Rent Financing

The Build-to-Rent (BTR) market is full of potential for real estate investors and developers alike, who stay informed and adaptable. While the current market may present hurdles, private lending and technological advancements could offer strong solutions. By adjusting your capital structures and utilizing fast, data-driven lending platforms, like Kiavi, you could position your investment business for long-term growth.

Are you ready to explore better financing options for your next BTR project? Start your application today and see how Kiavi could help.

Frequently Asked Questions (FAQs) About Build-to-Rent Financing

What is build-to-rent financing?

Build-to-Rent (BTR) financing involves securing capital to build and operate purpose-built residential rental communities. Lenders might offer various structures, including construction loans and bridge debt, to support your growing investment business. Utilizing these specific loan products could provide the necessary funds to complete large-scale neighborhood developments efficiently and effectively. Instantly check your rate with Kiavi online today.

How do I secure private credit for a BTR project?

You might secure private credit by partnering with alternative lenders, like Kiavi, that specialize in real estate investments. These lenders often focus on the asset's potential rather than just your personal credit history. Building a strong track record could improve your chances of obtaining favorable terms and rates.

Why are developers choosing private credit over traditional banks?

Developers might prefer private credit because alternative lenders often provide greater flexibility than traditional banking institutions. Private debt funds might offer customized draw schedules and faster processing times. This adaptability could help you keep your construction projects on track without dealing with rigid institutional requirements and constant delays.

How does technology improve the BTR lending process?

Technology can make the lending process faster and more efficient. At Kiavi, our AI-powered platform simplifies and accelerates real estate investment financing, helping you close deals faster and stay ahead of the competition.

Here are a few ways our technology helps you succeed:

• After-Repair Value & Cash-to-Close Estimator: Instantly assess a property’s potential and determine your ROI.
• Automated Document Review: Our AI extracts and validates data from your documents, speeding up the review process.
• AI Instant Scope of Work (SOW): Save time on loan applications by automatically extracting key details from project documents and contractor bids.
• Expanded Mobile Draws: Upload photos of your project’s progress from a mobile app to access your draw funds without needing an in-person inspection.
• New Construction Financing Platform: We provide tech-enabled underwriting for your ground-up construction and redevelopment projects.

Instantly check your rate with Kiavi online today.