RESIDENTIAL REAL ESTATE

A Leg Up: A common fallacy about the residential-building business these days is that there isn’t any money available for loans to buy land and start construction.

Actually, there is money available. It is just that while banks and other lenders a few years ago routinely loaned builders 90% to 100% of what they needed, these days they ask builders to kick in 20% to 30% of the cash.

Giants like William Lyon Co. can dip into reserves for the so-called equity contribution without too much strain, but many of the smaller companies have trouble coming up with the cash.

To help solve the problem, a group of builders, consultants and investment financiers have formed a company, Capital Realty Advisors, that plans to raise $125 million from private investors. The cash is to be used for loans--in amounts of up to $5 million--to builders having trouble coming up with the cash that their principal lenders want them to contribute to a deal.

The consortium has obtained the endorsement of the Building Industry Assn. of Southern California and will make its loans available only to BIA members, said Ron Saienne, president of Quantum Development in Newport Beach.

He said the group hopes to start making loans early next year.