Hard Money for Land?

2 Replies

Hello,

Is it possible to purchase a vacant lot with hard money? There is a buildable lot that sits behind one of my homes and there is a small chance the owners may sell it to me. If it's possible to purchase the lot with hard money, would a down payment be necessary and how would I go about refinancing after the initial deal? 

Thanks,
Rob

Originally posted by @Robert Russotti :

Hello,

Is it possible to purchase a vacant lot with hard money? There is a buildable lot that sits behind one of my homes and there is a small chance the owners may sell it to me. If it's possible to purchase the lot with hard money, would a down payment be necessary and how would I go about refinancing after the initial deal? 

Thanks,
Rob

I have a contact at LendOnLand who I can introduce you to. PM or email me if you like.

I do not not know their terms, however given that land HMLs are riskier than those with a standing structure, I would imagine you will need a downpayment to have some skin in the game.

Best wishes. 

@Robert Russotti HML will want to know what your exit strategy is. If you don't have that dialed in, that increases the likelihood that they'll have to foreclose at some point. In practice, it means that they'll decline the loan.

Given that land tends to be a lot harder/slower to sell than houses, foreclosure isn't all that attractive for them, so I'd expect them to be pretty conservative.

If you're planning a new build, I'd suggest that you have a builder ready to go, complete with building plans including new utilities, access, paving, landscaping, budget, timetable, etc. This should all be drawn up professionally to present to the HML - and your package should include both a complete budget and projected sales price for whatever you plan to build.

I'd consider talking with a local bank or credit union to see if they would offer a lending package for you instead.