FL A&D Loans for Subdivision

7 Replies

I have an 8 acre tract of land in the Florida panhandle that I want to develop into a small subdivision.  The lenders that I normally talk to about my rental property don't do A&D loans.  My partner and I need about $1.6MM to complete the build out of roads and infrastructure (engineering is complete).  What kind of options are out there either in banks or with HMLs?  The one quote that we have has exorbitant points and rates involved.

Has anyone had success with this kind of investment that they can share the details of?


I Just financed a $66.7M loan for unentitled land in Palm Spring, CA for a client of mine. Banks are still licking their wounds from the recession. It’s hard to get them excited about land. Your best bet is hard money or equity. PM me if you want to discuss. 


@Chris Collins   thats one whopper loan for bare un entitled dirt  wow !!  bet that borrower had more than a 700 fico and 30k in the bank LOL

horizontal loans are pretty tough there are a few that will do these..

OP I don't know what you think astronomical rates are . your never going to get bank rates unless you borrow from a bank .. I have one in Oregon that is just under 10 million and typical hard money rates are being quoted.. however frankly if you still cant make nice profit paying for HML or private money then the deal is probably to tight.

if your talking 10 points and 20% then ya that would  be a little bit high.

but 2 to 5 and 10 to 14 is in the all park.. for a HIGH risk horizontal loan.

I just did one personally ( i was the lender) in Orlando and we were up there on the top end of what i am talking bout 30% apr  but the developer snag a great deal and will still make a few million on it while paying me 100k for a 700k loan he used for 7 months.. that seemed fair all around.. I funded in 3 days fyi.. start to finish.. but a known borrower and i am not a bank or lender I am an experienced land developer who happens to also lend money.. so not your typical underwriting scenario.  But he got it done.. I see many folks think becasue they have rentals they should get same rates for these high risk complicated loans.. and never get them done becasue they keep shopping and getting led down the rabbit hole with promises of funding that never arrives.. 

If you have a HML that will go.. just pencil it in as cost to get it done close the loan and move on.

I am not a big player by any means.. but in Oregon I did my banks first horizontal loan since 06 they had a moratorium on doing them.. and so i was proud to be their first even at that i had to have 50% cash equity into the deal.. but I did get bank rate 1 and 6.

@Chris Collins @Jay Hinrichs

Thanks for the response.  The specifics were 12% interest and 4 points origination, a little high in your range, but still in your range.  Haven't heard the term horizontal loan. . . 

@Jay Strickler I may know of a few lenders in Florida that you can speak to in regards to this type of financing. I'll get you in contact with them to see if this is something that can work for you.

Originally posted by @Chris Collins :

Jay - Its was defiantly a whopper. News article below. https://www.desertsun.com/story/money/real-estate/2018/03/28/square-mile-virgin-sand-sold-75-million-rancho-mirage/462513002/

We don't typically find ourselves going out for HML's. If we do we are seeing rates in the high 7's to mid 12's with 2 points in. I'll keep you in mind for deals in your neighborhood.

 I would take 2 and 10 land or horizontal loans all day long if my bank falters a blink.. I will PM you those are great rates and the fact that you actually fund is great too...  lots of rabbit holes out there and what I call due diligence pump and dump scammers.. prey on mid level developers who have never gotten one of these loans.

the borrower falls for the 5 to 20k up front fee to perform so called due diligence and the so called lender never closes.

I have seen colleagues of mine blow through 100k looking for CHEAP money when they should have just under stood this kind of money in the Private equity world goes out at 10 to 15% apr period unless you have a local bank that will do it like I do. but even then its one project at a time and uber cautious.. they don't want to go back to the bad ole days were they ended up owning pipe farms.. and they generally will only do these with who they determine are their top tier clients.. you cannot in our market be unknown to the bank.. unless your have that monster balance sheet.

but in my mind Socal is ground zero for this kind of money..  I will be in touch

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