Helping buyer find financing?

Question

hello successful investors,

I have this lot that I've got a buyer for. He lives next door, decided to purchase the lot from me. He just purchased his house a few months ago. He has good credit, does have a nice pension he can use as collateral. How can I assist him in finding him financing?

Brian Gibbons · Answer

Richard,

Get a fair price for the land  on a good interest-rate, 20 to 30 per cent down, carry the paper

Brent Coombs · Answer

@Richard Pierre, why not BE his Bank? Let him pay you back on the drip feed, with nice interest. He's not going anywhere, and even if he does, you get to regain the lot! (It's called Seller Financing). Cheers. Welcome to BP.

(But do you REALLY mean: how can I find financing, because I haven't paid for it)!

Logan Hicks · Answer

Hate to burst your bubble, but most lenders will only lend a portion for land, regardless of great income AND good credit.

The liquidity of land is atrocious.

At best, hes looking at 25% down, maybe more. Worst ive seen so far is 50% down.

Land simply isnt a good bet for banks. They dont want to hold assets for 20+ years.

Steve G. · Answer

If the banks won't lend on land (and I can't see why they wouldn't if he has good credit and collateral), you might like to search BP for information relating to finding private lenders.

Often they may be a little higher rates, but depending on what your buyer has in mind for the land, it could be worth it.

Richard Pierre · Answer

thank you so much, Ashley. That does make a lot of sense.

Ashley St. Gelais · Answer

@Richard Pierre

Hey Richard,

Welcome to BP!

First of all he or you could call around to local banks/credit unions and ask if they lend on land.  If the value is there, the buyer shouldn't have to put up any of his own collateral. The land should act as that if you find a lender who offers this type of loan. : )

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