CASHOUT REFI OR HELOC ON RAW LAND CAN IT BE DONE

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CASHOUT REFI OR HELOC ON RAW LAND CAN IT BE DONE

Zach Fairfield
Investor · Portland, OR · Member since 2015 · 40 posts · 13 votes

I am looking to do a cash out REFI or a Heloc on a piece of raw land that we own in order to finance building a shop on another piece of land we have.  The property is in Boring, OR. Or Damascus, OR. Right on the border depends on who you talk to. 

Ok details:

Lot is held in an llc. 

Lot does have a shop and power but no sewer and is zoned for agriculture. 

Lot is non build-able currently has seasonal stream running thought and city sewer is not quite there yet. 

Value of land $45,000

Land is owned outright no mortage.

Would like to pull 50% or 20k out. or have as a heloc.

Once new shop is built will move everything out of shop and rent or lease to pay the monthly payments. 

Will rent from 300-500 depending on renter. 

We are holding the land untill the city sewer comes in and the land value doubles or tripples. All properties in the area are going for around 500k median. 

Have a person credit score of 750 and a good job and am willing to personally guarantee the loan. 

Any advise, strategies, referrals would be awesome. 

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Matt J.
Investor · Tacoma, WA · Member since 2016 · 120 posts · 112 votes
10y
Hello Zach - my gut reaction is this is going to be tough. My suggestion is to speak with a credit union or small/regional bank. The reason for this is you've got a better chance of the actual decision maker listening to you and your situation versus saying this loan "doesn't fit in the box". The other benefit of these small lenders is they have the ability, and often do, portfolio the loan (hold it in their books and service it). I prefer credit unions myself. Good luck and I hope it works out for you.
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  • Matt J.
    Investor · Tacoma, WA · Member since 2016 · 120 posts · 112 votes
    10y
    Hello Zach - my gut reaction is this is going to be tough. My suggestion is to speak with a credit union or small/regional bank. The reason for this is you've got a better chance of the actual decision maker listening to you and your situation versus saying this loan "doesn't fit in the box". The other benefit of these small lenders is they have the ability, and often do, portfolio the loan (hold it in their books and service it). I prefer credit unions myself. Good luck and I hope it works out for you.
    1Reply
  • Zach Fairfield
    OP
    Investor · Portland, OR · Member since 2015 · 40 posts · 13 votes
    10y
    Thanks Matt, I have been reaching out to a few that I have worked with and getting some referrals for others right now.
    0Reply
  • Zach Fairfield
    OP
    Investor · Portland, OR · Member since 2015 · 40 posts · 13 votes
    10y
    @jay hinrichs was hoping you might have some wisdom on this
    0Reply
  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    10y

    @Jay Hinrichs. That other tag didn't seem to work.

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  • Travis Sperr
    Lender · Denver, CO · Member since 2009 · 1k+ posts · 597 votes
    10y

    Loans on raw land are very challenging, especially if you are trying to get more than you may have originally paid for it. as @Matt J.  indicated - very local banks or credit unions.

    0Reply
  • Zach Fairfield
    OP
    Investor · Portland, OR · Member since 2015 · 40 posts · 13 votes
    10y
    Thank you Mindy, Couldn't figure out why it wouldn't link. And we did pay approximately 20k for the property originally. With the appreciation in the market and the fact we purchased below market. the current value would be approximately 45k. I figured this wouldn't be an easy loan lol but I'm hoping someone has tried and failed everywhere or has actually completed a similar transaction.
    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Zach Fairfield  in Oregon you cannot make loans less than 50k... at least in a hard money sense as you have usary issues.

    this is pretty much an impossible scenario other than friends or family or some private lender very close to you.. waste of time to shop this to any company..

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    0Reply
  • Marianne C.
    Investor · Portland, OR · Member since 2012 · 29 posts · 9 votes
    10y

    If you have a perc test, you might try talking to www.northwestfcs.com  They've been helpful for me.

    0Reply
  • Zach Fairfield
    OP
    Investor · Portland, OR · Member since 2015 · 40 posts · 13 votes
    10y

    Awesome thank you @Jay Hinrichs. I was just searching trying to get creative with what we do have on hand. I knew it would be a little far-fetched. 

    And the issue with the lot is that it is not perc-able. There is a season stream that runs through the middle and there is no city sewer it would have to go septic and there is not enough room the way the property is laid out to have a septic drain field far enough away from the stream.  

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    property has very little value only a neighbor.. so no one is going to laon on that

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    0Reply
  • Zach Fairfield
    OP
    Investor · Portland, OR · Member since 2015 · 40 posts · 13 votes
    10y
    Well there is good news the city sewer is only about 1 year away supposedly. Once that is an option the lot is build-able and we will either sell it or do the construction depending on the market.
    1Reply
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