Cash out refi on land?

Question

I have 35 acres in Colorado that is free and clear. It is improved residential land that is ready to build with power and water at the property line. Are there lenders that will do cash out on land?

Matt Devincenzo · Answer

Just something to consider as you are figuring out your plan...loans will not change your tax position on this property, so if that is why you're doing this you probably want to reconsider.

Steven Goldman · Answer

It is highly unlikely that you will be able to cash out refinance your acreage unless the purpose of the loan is to make improvements on the actual ground. All of the prior suggestions about local banks are your best bet. Still it is likely to be a business purpose loan and the use of the funds will be restricted accordingly. Good luck and Happy New Year!

Dave Skow · Answer

Not many  cash out  programs  for  land  out there ... try  smaller local  banks /  credit unions that  are  familiar  with the  area...if you have  another property - you might ask  for a  " cross  collateralization "   type   cash out refinance

John Shea · Answer

It is located in Pagosa Springs, CO; sort of a touristy place south of Colorado with ski resort about 30 minutes away. My neighbor tells me that everyone harvest elk at the back of my property, in the valley where the stream crosses. It was part of the retirement plan, get to hunt from the back porch and all. As life would have it, plans change, kind of starting over on the east coast.

My plan was to sell the property next year, but wanted to pull some cash out prior to selling to help minimize the capital gains tax.

Is there a proper name for this type of loan product that I should be looking for? Just want to make sure the bankers know what I'm talking about when I contact them.

Jared Rine · Answer

@John Shea..where in CO?  I'd like to know more details and what the plan is. Thank you.

Brandon Plombon · Answer

John - I would ask your local lenders to see if they are interested in lending on bare land. Most bank that do will have the LTV requirement closer to 50-65%.