WHO WE ARE ////
First Continental is a Houston based private lending company that was formed in 1994 for the sole purpose of providing non-recourse lot acquisition and development financing. First Continental has closed over 800 loans totaling over $2.5 billion to finance the development of more than 65,000 lots. First Continental offers a streamlined process that allows for quick decisions and an efficient closing process.
COMPANY HISTORY ////
First Continental was formed in 1994 by John Bonner, Joe Lynch and Dan Arnold to continue the lot acquisition and development financing operations conducted in various financial institutions managed by this group over the past 40 years. Experience in managing these various regulated and non-regulated financial institutions led to the realization that lot development lending, especially with no personal liability, is not a good fit for traditional regulated banks. The extreme regulatory burden and bureaucratic management structures required in traditional banks make it very difficult for them to provide the quick responses and flexibility needed to serve the lot development industry which is subject to erratic cash flows, long project durations and highly cyclical market risk exposure. Joined by Todd Aiken, Jeff Baker and Jeff Corbett, with over 90 years combined experience in home builder finance and lot development lending, First Continental developed the ability to provide quick responses and structuring expertise to meet the flexibility needs for lot acquisition and development lending. This seasoned and motivated management group recognized a niche and built First Continental to most effectively serve the uncertain and unpredictable lot development industry. Understanding that the lot development business is very capital intensive and subject to high levels of risk, First Continental was built to provide financial structures that meet the unique risk reward needs of each borrower, quickly and consistently.
OUR LOAN PROGRAMS ////
First Continental Investment Co., Ltd. provides non-recourse lot financing to developers and builders that is focused on timely response and a streamlined closing and funding process.
Our borrowers are typically single asset, single purpose entities with experienced operators that have successful track records. We focus on entry-level to second time move-up price points in metropolitan areas that have positive financial trends and available economic and housing data. Prospective projects are preferably permitted and “shovel ready”, presold to production homebuilders and can be completed and sold within 3 years. The loan-to-value/loan-to-cost requirements are predominantly in the 60% to 75% range depending on the size & development characteristics of the project.
Focus on Residential Lots
First Continental has had a singular uninterrupted focus on serving the development and homebuilding community with non-recourse lot financing since its inception in 1994. In total, First Continental has provided financing or has developed over 800 communities representing 65,000 lots and over $2.5 billion in loans.
The Borrower’s risk is limited to their financial investment. There are no outside guaranties required. There are many potential challenges in land development. First Continental provides its support through their experience and contacts that comes from financing hundreds of residential projects, involving countless builders, developers, equity providers and contractors.
Most regulated financial institutions, such as banks, have a difficult time providing quick responses and structuring flexibility needed in lot development. First Continental, on the other hand, offers quick decisions from loan application to loan closing through the funding and payoff process. Decisions are made quickly by a small group or professionals located in the same office. Conversely, banks are held hostage by loan committee schedules, out of town decision makers and regulatory limitations. Most banks have been difficult to count on during slow housing markets. First Continental has been a consistent, profitable provider of financing through the peaks and the valleys.
OUR PROCESS ////
Our experience and contacts that come with over 25 years of uninterrupted focus on non-recourse lot financing help us offer a process in a lending environment without the bureaucracy found in big financial institutions.
The process starts with a short phone call to First Continental to make introductions and provide a brief overview of the project and discuss preliminary structuring concepts.
Upon receipt of preliminary information including a proforma, description of utility status, description of any off-site work, entitlement status, maps and contract terms, First Continental will produce a Letter of Interest (“LOI”) that details its loan terms, pricing, loan to value requirements, loan to cost requirements, release provisions, etc. The LOI is negotiated and executed by both parties.
First Continental then engages in its due diligence process. Additional information is obtained including but not limited to purchase contract, builder contracts, school district information, appraisal, environmental, resume of principal(s), financials, etc. When the loan package is completed and a positive credit decision is made, an appraisal is engaged and legal documents are started.
IN THE NEWS ////
First Continental has been a reliable finance partner of high integrity, providing acquisition and development loans on many projects for us over the last 5 years. The team there is very experienced and does their best to insure transactions are handled well from start to finish.
Chairman of David Weekley Homes, Inc
First Continental is a pleasure to work with, and they delivered on their promise of non-recourse financing for our company. From the issuance of their letter of intent, the funding process all the way through to closing was well organized and respectful of our time. The First Continental team is professional in every respect and we look forward to working with them again in the future.
Robert J. Starkman
Senior Vice President, Asset Management
First Continental has been consistently servicing the single family development industry with non-recourse lending options since the mid 1990’s which has allowed them to remain nimble, creative and quick to respond to the development community they service with a personal touch. As a non-regulated private lender with singular focus on this specific market segment, First Continental has been and continues to be a resource where high levels of integrity, creative evaluation and quick decisions are par for the course.
Sam Yager III
Executive Vice President of Sam Yager Incorporated
First Continental is a first class organization always exhibiting professionalism and flexibility during upswings and downturns in the cycle.
The Kalikow Group
I have been doing business with First Continental for over 10 years. They have provided me with over $40 million in lot acquisition and lot development financing in Austin, San Antonio, and Houston.
First Continental is a company that is based upon a set of values. These values are evident in how they conduct their business with their customers. The values of Honesty, Integrity, Trust and Respect and Excellence are the core of the company.
I know that I can depend on what they say and trust that they will be there to assist me throughout the term of the development.
President of Wilshire Homes
I would like to thank you and your team at First Continental for the outstanding work you have done on behalf of Forestar and its partners over the years. You truly understand our business and our customers. Your integrity, honest approach to business, responsiveness and market knowledge, has added value to every transaction we have done. First Continental is best of class and great people to do business with — thanks for being a great business partner.
Craig A. Knight
Chief Investment Officer of Forestar Group Inc.
5718 Westheimer, Suite 1450
Houston, Texas 77057
John Bonner, President
Todd Aiken, Executive Vice President
Jeff Corbett, Vice President
2300 Barton Creek Blvd., Unit 2
Austin, TX 78735
Jeff Baker, Senior Vice President
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