The Flight to Collateral
Inside A4 Capital Partners: a residential bridge lender financing the luxury spec homes banks won't touch, built on sub-70% LTV, real cash equity, and monthly yield.
Interview
Key Takeaways
Banks won't finance the luxury spec home.
Banks avoid short-term construction debt, and national bridge lenders mostly pool loans under $1 million into securitizations. A4 lends on spec homes in supply-constrained markets like Fairfield and Westchester counties, where many buyers pay cash. Builders there rarely see competing term sheets, so they pay 9% to 10% plus one to two points.
A4 wants the borrower's cash in first.
At Sachem Capital, Nick watched loans go bad when the appraisal showed 65% LTV but the borrower had little cash in the deal. A4 requires real money at closing, about 25% of cost on ground-up loans, along with a full personal guarantee. The book averages under 60% LTV and a 760 credit score.
The Shelter Island borrower was $5 million in before A4 showed up.
The developer had already put more than $5 million into a waterfront home on Ram Island when A4 lent him $4.7 million to finish it. The estimated sale price is about $12 million. At 9.75% plus a point and a half, the loan earns more than 11% unlevered, and fund-level borrowing can push that into the 20s.
11% to 12% a year, paid monthly, redeemable after 18 months.
A4's evergreen 506(c) fund is targeting $150 million and runs at 1.5-to-1 leverage. Distributions go monthly starting in November. Redemptions open after an 18-month lockup through a 6.25% quarterly gate, and origination fees flow through the waterfall to LPs.
Team Members
Alex Foster co-founded Atlas Real Estate Partners in 2009 with Arvind Chary, a friend since their undergraduate days at Tufts. Over 17 years, Atlas has raised about $700 million in equity, completed around $2 billion in deals, and bought roughly 10,000 multifamily units. Before Atlas, Alex worked at Argent Ventures on a $500 million mixed-use portfolio and at Rockrose Development on $600 million in office buildings. He started his career at Bank of America structuring commercial loans. He holds a BA from Tufts and a master's in real estate development from Columbia.
Nick Marcello grew up on job sites in a family of builders. He started his career at PwC, then managed financial reporting for Sun Belt multifamily communities at Waypoint Residential. In 2020, he joined Sachem Capital (NYSE: SACH), a publicly traded hard money lender, and rose to CFO, overseeing capital markets, foreclosures and workouts. He joined Atlas as CFO in 2025 and co-founded A4 at the start of 2026.