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Real Estate Discussion: Getting financing for vacant unimproved rural land.
2018 Apr 19, 10:37am 4,524 views 9 comments
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8
FortWayne
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2018 Apr 19, 12:23pm
FortWayne
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2018 Apr 19, 12:23pm
You can probably try SBA. They do loans, but will ask for something more tangible to secure loan against. Like a lean on your other residence or similar asset. It’s worth a conversation.
SBA does loans for business, so you’ll need a business plan for it.
Automan Empire says
SBA does loans for business, so you’ll need a business plan for it.
Automan Empire says
FortWayne saysWhat loan amount you looking for? Ltv?
About $36,000, 75% LTV
9
Strategist
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2018 Apr 19, 5:37pm
Strategist
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2018 Apr 19, 5:37pm
Automan Empire says
If it's rural and undeveloped, the conventional lenders and banks won't even do it for 50% down. A hard money lender might, but most likely they will only go 25% LTV. They will also charge ridiculous points, and a high interest rate.
Try and use a credit card with 0% APR for 15 months.
I'd like to shop it around to private investors at a generous interest rate and short amortization schedule. Right now I can put 25% on the table; I understand conventional lenders won't touch less than 50% down on vacant land. What kind of numbers would interest a private investor in this scenario? I've penciled it out at 10% on a 5 year mortgage which is totally doable on my end.
If it's rural and undeveloped, the conventional lenders and banks won't even do it for 50% down. A hard money lender might, but most likely they will only go 25% LTV. They will also charge ridiculous points, and a high interest rate.
Try and use a credit card with 0% APR for 15 months.
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The one I bought was purchased with a low down and owner carry; he bought it in the tax lien sale probably for a song and is selling it to me. This is the best way to purchase land even with little down and poor credit! (Side note, my long term plan is to become this guy.)
The other parcel in question is being sold as part of an estate sale, and the family won't carry. My offers were not even responded to.
I'd like to shop it around to private investors at a generous interest rate and short amortization schedule. Right now I can put 25% on the table; I understand conventional lenders won't touch less than 50% down on vacant land. What kind of numbers would interest a private investor in this scenario? I've penciled it out at 10% on a 5 year mortgage which is totally doable on my end.