Loan for large acreage land
Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes
Loan for large acreage land
Most Popular Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesHey Nik the other thing to do here is get the seller to carry.. and what would be common is let the seller reserve the timber deed until you have paid them off.. one of the big things in the north west was for unscrupulous people to buy land on contract slick off the timber then never make payments.. so most folks these days know they need to reserve timber rights until paid in full.. and you can get release clauses for the timber as well. you structure it anyway you guys agree..
although on the surface for that kind of acreage at that price there cant be to much Merch timber .. Logger would have long ago bought it.
and if you can get the seller to carry then negotiate partial releases for each lot that gets sold off.. but do check with your tax person you don't want to sell yourself into a tax bind.. since you will be a dealer.
29 Replies
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes7y
Originally posted by @Nik Moushon:
I am in negotiations for a large, 264 acres, of timber land that I plan to divide up and sell 20 ac lots. Located in Washington state, near Wenatchee / Leavenworth area. I have called a total of 5 local banks/credit unions and none of them lend on large acres. Regardless of what it is used for. I'm still waiting to hear back from 3 others but I'm not holding my breath. Do any BP members know of anyone that would be even willing to consider loaning on this kind of property? I've got a basic pro forma that shows the numbers work great but so far no one is even willing to talk term and rates let a lone hard numbers.
Hey Nik. I'll chime in so a few of my colleague's like @Jay Hinrichs might see your question.
What ballpark price-wise are you talking about? Might help folks answer better. Good luck with this!
- Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes7y
@Steve Vaughan Thanks for chiming in. CVB doesnt do large acreage loan FYI and still waiting to hear back from NCB. Will probably be tomorrow since its so late in the day. *just heard back. see below
Details on this piece:Asking price: $480k
Acres: 264 ac
Land Type: Forest/Timber
Other details: There is about 80-100ac of area that is meadow type land with smaller trees/brush, good for building pads. There is a paved public road (which means plowed) that fronts one entire property line so there is direct access from the road to several speculated lots. There is a small gravel pit in one corner of the property which the current owner used to build and maintain the logging/forest service roads.
My Intentions: Short plat into 20 ac parcels to sell off. Keep a couple for myself. The lots on the street will be sold as those should be the easiest to sell. I have already talked with a realtor and he has given me suggested list pricing of $75-100k per 20 ac parcel. I plan on suggesting an 80/20 payoff with the bank. Where ~80% of parcel sell price will go to pay off the loan with the remainder to go to me, mainly to just pay off taxes. This should pay off the loan the quickest.
I plan on keeping the area of the rock pit to see if I can turn that into some cash-flow to help make payments if lots don't sell as fast as I would like. I have already contacted a quarry close by that has expressed interest in mining it potentially. Will get more details on this when I have it under contract.
I actually just got off the phone with one bank and my first thought of doing it through a residential loan wasn't possible they said and that I would need a commercial loan for this. I'll get a call from their commercial lender tomorrow. This doesn't make sense to me. I could understand a commercial loan if I were doing a sub-division with 20 homes with roads and utilities and infrastructure but this will be straight land. When I go to sell the 20 acres the buyers will be getting residential loans. This part just doesnt make sense to me but I'm inexperienced doing something this large.
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes7y
Sounds like a cool property!
If CVB and NCB don't work out, you might try Wheatland. Kind of ag-focused, or used to be.
Hope it works out for ya!
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Steve Vaughan Steve thanks for the mention.
I would think it near impossible for an investor that does not have substantial amount of deals in the same category to get a loan from any bank.. and even if you could its ALWAYS 50% LTC..
there are HML will do it at 50% LTC..
However generally speaking these are cash and carry plays.. usually something like Nik Steve Jay all go in pay cash . the resale of the lots generally are on terms.. you may find some cash buyers.. but you have to be in a position to do seller carry back.. one reason is well and septic system road improvement to the building site bringing in power and tele this all cost a lot of money..
but the dollars work if topo allows one to actually get 10 to 12 lots.. and keep in mind the lots not fronting the paved road will need roads built with base rock then fine rock on top.
getting a rock pit actually permitted is quite tough.. but to use for your own purposes on site works.. we did that a lot on our 700 acre tree farm we have 5 miles of rock roads.. then you talk fencing LOL..
this would be a perfect deal as I said for a group to go in on.. sell off enough to get your capital back then each take a lot. something like that.
you can also if you want when you sell off the land you could reserve the timber rights. although this could hamper resale value.. but I have done that a few times. Of course we traded in timber deeds and rights for a decade so it was our business. Good luck with it Nik.. not to be a Debbie downer on the banks financing this for you.. but its just not their bag.. it took me a fair amount of years to just get a 1 million dollar LOC to buy this type of stuff.. and we had lots of experience my partner was 3 generation logger me second generation broker / developer.. So when I started before I had lines of credit to buy this stuff.. I used private EXPENSIVE money. but that filled my experience bucket to where I had 2 years of tax returns in the industry. in other words on my tax returns when it said what I did for a living it said Timber !!!
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Hey Nik the other thing to do here is get the seller to carry.. and what would be common is let the seller reserve the timber deed until you have paid them off.. one of the big things in the north west was for unscrupulous people to buy land on contract slick off the timber then never make payments.. so most folks these days know they need to reserve timber rights until paid in full.. and you can get release clauses for the timber as well. you structure it anyway you guys agree..
although on the surface for that kind of acreage at that price there cant be to much Merch timber .. Logger would have long ago bought it.
and if you can get the seller to carry then negotiate partial releases for each lot that gets sold off.. but do check with your tax person you don't want to sell yourself into a tax bind.. since you will be a dealer.
- Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes7y
Originally posted by @Steve Vaughan:
Sounds like a cool property!
If CVB and NCB don't work out, you might try Wheatland. Kind of ag-focused, or used to be.
Hope it works out for ya!
I called them too and it was a no. Though I was asking for a residential loan not ag. I did call another ag lender, forget the name, but they are focused on ag type land and dont consider timber ag. Since I'm not farming anything or building my permanent residence there they wont lend on this property. I'll have to wait and see what NCB commercial lender says. Hopefully tomorrow I can find out more.
- Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes7y
@Jay Hinrichs Thanks for taking the time to detail this out. No debbie downer. I need to know the reality of how this business works.
I'm not doing this on my own, I do have a partner that has 20 years exp doing lands deals similar to this. He actually has done both traditional subdivisions and rock pits (currently owns one). He has structured subdivision loans with the bank to cover both land acquisition and construction. That was in the mid west though so it must be different here in Washington.The rock mining permit actually wont be that hard. Reason being is my zoning only allows for short-term mining (~6months) and with it already established vs starting new and disturbing more ground. I've also already talked to the city about it and their tone comes off as promising. Though I know that could change overnight. Not a guarantee but I think its has a high potential for success. Heres to hoping anyways.
Hopefully, I can hear back from the two banks tomorrow and see what they have to say. At least terms I can work with and not just a NO.
- Architect · St. Charles, IL · Member since 2018 · 95 posts · 70 votes7y
This doesn't have anything to do with getting a loan. However, To reduce your holding costs once you acquire it, see if your state has any "forest management plans" or similar DNR type programs. I own a much smaller piece of land, 12 acres of forest. The land was being taxed as residential estate zoning before I purchased it at $3,000/year. Now the tax bill is $75/year.
You could also reach out to a local forester / logging company to see if you could pull any money out of it on the front end by harvesting some of the trees. Just some thoughts.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Seth Holmen:
This doesn't have anything to do with getting a loan. However, To reduce your holding costs once you acquire it, see if your state has any "forest management plans" or similar DNR type programs. I own a much smaller piece of land, 12 acres of forest. The land was being taxed as residential estate zoning before I purchased it at $3,000/year. Now the tax bill is $75/year.
You could also reach out to a local forester / logging company to see if you could pull any money out of it on the front end by harvesting some of the trees. Just some thoughts.
out west its quite common to be in timber deferral or ag deferral pretty much by default..
- Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes7y
Originally posted by @Seth Holmen:
This doesn't have anything to do with getting a loan. However, To reduce your holding costs once you acquire it, see if your state has any "forest management plans" or similar DNR type programs. I own a much smaller piece of land, 12 acres of forest. The land was being taxed as residential estate zoning before I purchased it at $3,000/year. Now the tax bill is $75/year.
You could also reach out to a local forester / logging company to see if you could pull any money out of it on the front end by harvesting some of the trees. Just some thoughts.
Jay is right. This land is already in the timber deferral tax bracket. The taxes for all 264 ac is less than $2k/year.
Its good to bring up though. Luckily I could separate this into 5 ac parcels and still keep that tax deduction. Zoning isnt going to allow that BUT that is the minimum for the program. It also allow one SFH on the property to still stay in the program. If you opt out its 10 years back taxes! Thats going to be a hefty bill!
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Seth Holmen:
This doesn't have anything to do with getting a loan. However, To reduce your holding costs once you acquire it, see if your state has any "forest management plans" or similar DNR type programs. I own a much smaller piece of land, 12 acres of forest. The land was being taxed as residential estate zoning before I purchased it at $3,000/year. Now the tax bill is $75/year.
You could also reach out to a local forester / logging company to see if you could pull any money out of it on the front end by harvesting some of the trees. Just some thoughts.
out our way.. any seller that has timber experience will reserve the timber rights.. they will in most cases let you log as long as 100% of the proceeds go to pay down the seller carry back note.. the VAST majority of these deals are done with seller carry or CASH. ONe reason banks don't do this stuff is they don't understand it. there are banks though in the NW that obviously fund Lumber companies and Mills.. but its a specialty niche and not available to just anyone you have to be in the business.. 15 acres of well stock 100 year old doug fir in our market can be worth over 500k on the stump.
- Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes7y
I am buying this from a logging company. They logged the 324 ac parcel across the street ~10 years ago or so. If they didn't log this one when their equipment was here I don't see them wanting to log this one any time soon. I have asked for seller to transfer all timber rights. So we will see what comes of that.
I have not attempted to see if they will do a seller carry, I didnt think they would, but I can try. Might try the offer A or B thing and give them two options. Thats assuming banks even what to try loaning on this. - 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Nik Moushon:
I am buying this from a logging company. They logged the 324 ac parcel across the street ~10 years ago or so. If they didn't log this one when their equipment was here I don't see them wanting to log this one any time soon. I have asked for seller to transfer all timber rights. So we will see what comes of that.
I have not attempted to see if they will do a seller carry, I didnt think they would, but I can try. Might try the offer A or B thing and give them two options. Thats assuming banks even what to try loaning on this.if your paying cash or getting a loan your cashing the seller out and there would be no reason for a timber restriction
- Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes7y
Originally posted by @Jay Hinrichs:
Originally posted by @Nik Moushon:
I am buying this from a logging company. They logged the 324 ac parcel across the street ~10 years ago or so. If they didn't log this one when their equipment was here I don't see them wanting to log this one any time soon. I have asked for seller to transfer all timber rights. So we will see what comes of that.
I have not attempted to see if they will do a seller carry, I didnt think they would, but I can try. Might try the offer A or B thing and give them two options. Thats assuming banks even what to try loaning on this.if your paying cash or getting a loan your cashing the seller out and there would be no reason for a timber restriction
I agree Jay. I dont see any reason they would. I just put it in there to have it on paper. I dont foresee any problem with that. Just covering my rear.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Nik Moushon:
Originally posted by @Jay Hinrichs:
Originally posted by @Nik Moushon:
I am buying this from a logging company. They logged the 324 ac parcel across the street ~10 years ago or so. If they didn't log this one when their equipment was here I don't see them wanting to log this one any time soon. I have asked for seller to transfer all timber rights. So we will see what comes of that.
I have not attempted to see if they will do a seller carry, I didnt think they would, but I can try. Might try the offer A or B thing and give them two options. Thats assuming banks even what to try loaning on this.if your paying cash or getting a loan your cashing the seller out and there would be no reason for a timber restriction
I agree Jay. I dont see any reason they would. I just put it in there to have it on paper. I dont foresee any problem with that. Just covering my rear.
although like I said its not uncommon to reserve the timber rights.. you would get a better price on the dirt.. but its going to make your sales to homeowners a little tougher.. when 20 years from now the logging equipment comes in and their forest is cut down :)
Good luck with it.. If this is a logging company that owns it.. here is the skinny I will be the farm on.
1. they logged this and got enough to pay for the dirt plus some
2. the next harvest is many decades away
3. they are better off selling now and using the money than land banking the timber.
4. this is east slope timber it grows much slower than west slope so time between harvests are much longer.
- Member since 2018 · 150 posts · 140 votes7y
Not exactly loan-related, but you should talk to the county about development and subdivision requirements. In general, when subdividing, you have to provide water and access at a minimum. I would assume that 264/5 would require extensive road building, to county standard, which is a 60’ ROW in my area in southern Washington. Also, no one is going to buy a lot deep into the subdivision without power, so in order for these to be marketable, you’re looking at tens of thousands of dollars in power distribution. Overall, to make these marketable, you could be looking at hundreds of thousands. Point is, in most places, you don’t just draw a bunch of new lines and start selling lots.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Nate Bell:
Not exactly loan-related, but you should talk to the county about development and subdivision requirements. In general, when subdividing, you have to provide water and access at a minimum. I would assume that 264/5 would require extensive road building, to county standard, which is a 60’ ROW in my area in southern Washington. Also, no one is going to buy a lot deep into the subdivision without power, so in order for these to be marketable, you’re looking at tens of thousands of dollars in power distribution. Overall, to make these marketable, you could be looking at hundreds of thousands. Point is, in most places, you don’t just draw a bunch of new lines and start selling lots.
used to in the good ole days in WA.. and its sounds like he can just describe out 20 acre parcels with no improvements but like you said who is going to buy them.. since they would have to do all the improvements to get the parcels buildable.
- Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes7y
Originally posted by @Nate Bell:
Not exactly loan-related, but you should talk to the county about development and subdivision requirements. In general, when subdividing, you have to provide water and access at a minimum. I would assume that 264/5 would require extensive road building, to county standard, which is a 60’ ROW in my area in southern Washington. Also, no one is going to buy a lot deep into the subdivision without power, so in order for these to be marketable, you’re looking at tens of thousands of dollars in power distribution. Overall, to make these marketable, you could be looking at hundreds of thousands. Point is, in most places, you don’t just draw a bunch of new lines and start selling lots.
Normally that would be the case but there are several circumstances about this area that are different than normal. First, as long as I do the zoning minimum (20 ac lots) and do not do any special permitting processes or cluster subdivisions I do not need to meet normal standards. I do not need to meet city/county road standards or need to bring power to the site. I will need to do an exploratory well to give a standard depth of well water and similar for a perc test as well.
About two miles down the road there is about 12-18 houses already that do have power but are on well/septic. About half a mile up the road there is another dozen-ish house that are total off-grid houses. Zero power and well and septic are there as well. So there is precedent in the area for off grid vacation houses that willing sacrifice some of the normal utilities for the views/location. With solar/wind power easily obtainable now a days, and very common in the wider area, no power on site is not as big a deal. Especially since we get 300 days of sun a year here. This property is similar to those.
There is a forest service road that is already cut and in, mostly, drive-able condition that allows access to a majority of the site. I have also done a preliminary layout of lots that will allow access to ALL lots from this FSR. I will obviously need to do improvements and maintenance on this road, which will cost money, but thats minimal compared to a full blown county std road.
PS - I know you dont know this but I am an architect. Looking up and understanding code is what I do on a daily basis. I know how figure out what is doable on a piece of property very quickly. Its the money/loan side of this business that I have little experience in.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Nik Moushon:
Originally posted by @Nate Bell:
Not exactly loan-related, but you should talk to the county about development and subdivision requirements. In general, when subdividing, you have to provide water and access at a minimum. I would assume that 264/5 would require extensive road building, to county standard, which is a 60’ ROW in my area in southern Washington. Also, no one is going to buy a lot deep into the subdivision without power, so in order for these to be marketable, you’re looking at tens of thousands of dollars in power distribution. Overall, to make these marketable, you could be looking at hundreds of thousands. Point is, in most places, you don’t just draw a bunch of new lines and start selling lots.
Normally that would be the case but there are several circumstances about this area that are different than normal. First, as long as I do the zoning minimum (20 ac lots) and do not do any special permitting processes or cluster subdivisions I do not need to meet normal standards. I do not need to meet city/county road standards or need to bring power to the site. I will need to do an exploratory well to give a standard depth of well water and similar for a perc test as well.
About two miles down the road there is about 12-18 houses already that do have power but are on well/septic. About half a mile up the road there is another dozen-ish house that are total off-grid houses. Zero power and well and septic are there as well. So there is precedent in the area for off grid vacation houses that willing sacrifice some of the normal utilities for the views/location. With solar/wind power easily obtainable now a days, and very common in the wider area, no power on site is not as big a deal. Especially since we get 300 days of sun a year here. This property is similar to those.
There is a forest service road that is already cut and in, mostly, drive-able condition that allows access to a majority of the site. I have also done a preliminary layout of lots that will allow access to ALL lots from this FSR. I will obviously need to do improvements and maintenance on this road, which will cost money, but thats minimal compared to a full blown county std road.
PS - I know you dont know this but I am an architect. Looking up and understanding code is what I do on a daily basis. I know how figure out what is doable on a piece of property very quickly. Its the money/loan side of this business that I have little experience in.
Most of Klickitat county was parceled off like this short plat after short plat.. and we used to do them in Cowlitz a bunch .. Oregon NOPE very tough .. CA pre sub division map act it was pretty easy as well.. and N Idaho was pretty cool to work in .
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
So Nik any other word on banks willing to fund your deal??
googel Scottman Guide then check out HML and there is a good matrix and will tell you who does land deals.
Seattle funding might look at that deal.
- Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes7y
Originally posted by @Jay Hinrichs:
So Nik any other word on banks willing to fund your deal??
googel Scottman Guide then check out HML and there is a good matrix and will tell you who does land deals.
Seattle funding might look at that deal.
I've heard back from 1 of the 3 that actually said they would look it over and get back to me. In short they said that we could probably figure something out. They said they would need more detailed info on both me and my partner on this before its a firm yes but at least I got a potential yes.
The terms they laid out is what has got me in a bind atm. Basically I got kicked out of the residential land dept. and sent over to the commercial dept. They laid out a 65% LTV, 15 yr am, 6.5% (min.), & a 1.5% bank fee. Now I know I'm new to these type of land deals, so I guess I shouldn't be surprised at this, but a 35% DP is WAY bigger than I was originally thinking. My mind was in the 20-25% DP range, not anywhere close to 35%. So at that point my DP would be ~$130k, if the sell accept my current offer, which is way more than I have and really at that kind of cash makes me wonder if I should spend that elsewhere in a different investment. If I could have a lot sold at closing then I could have that kind of DP no problem but thats a big IF and I doubt the seller would keep pushing back closing till I could have a lot sold. So I'm still go to hold out and see what the other two banks have to say and try a couple others I got from other people today but I'm sure they are all going to be something in that ballpark of a figure. - Real Estate Broker · Member since 2018 · 18 posts · 6 votes7y@Nik Moushon Try the Federal Land Bank...in Texas. Its Capital Farm Credit..they do all the ag loans over 15 acres...
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Nik Moushon:
Originally posted by @Jay Hinrichs:
So Nik any other word on banks willing to fund your deal??
googel Scottman Guide then check out HML and there is a good matrix and will tell you who does land deals.
Seattle funding might look at that deal.
I've heard back from 1 of the 3 that actually said they would look it over and get back to me. In short they said that we could probably figure something out. They said they would need more detailed info on both me and my partner on this before its a firm yes but at least I got a potential yes.
The terms they laid out is what has got me in a bind atm. Basically I got kicked out of the residential land dept. and sent over to the commercial dept. They laid out a 65% LTV, 15 yr am, 6.5% (min.), & a 1.5% bank fee. Now I know I'm new to these type of land deals, so I guess I shouldn't be surprised at this, but a 35% DP is WAY bigger than I was originally thinking. My mind was in the 20-25% DP range, not anywhere close to 35%. So at that point my DP would be ~$130k, if the sell accept my current offer, which is way more than I have and really at that kind of cash makes me wonder if I should spend that elsewhere in a different investment. If I could have a lot sold at closing then I could have that kind of DP no problem but thats a big IF and I doubt the seller would keep pushing back closing till I could have a lot sold. So I'm still go to hold out and see what the other two banks have to say and try a couple others I got from other people today but I'm sure they are all going to be something in that ballpark of a figure.if you got those terms above I would be jumping for Joy.. Also the seller is probably not going to release a lot with out some sort of pay down on his note.. so its not like you can use his property to create equity for your down payment. Not sure what you were hoping for but to put a land deal together of this magnitude with only 100k or less is not very realistic.. I mean just to survey out the 20's is going to cost you a bunch.. ( if the county requires a survey.) and maybe there already is one.. I just did a boundary survey on the 37 acres I just closed on for 89 homes. and it was just under 30k. You need tight boundary before you start laying out your lots.. and this was a flat piece of farm ground.. you take 260 acre tract in the mountains.. and that could cost quite a bit right there.
Don't give up your plan .. your just getting a dose of reality on doing bigger land deals. this is not income property that you can leverage into.. UNLESS seller is willing to finance it for you as I stated above.. and its very common to sell these types of properties with owner carry because financing is not readily available as your finding out.
Keep in mind the two largest funders of rural Timber land ( not talking AG land) is the Harvard Endowment fund ( yes that Harvard) and
Big Boston Insurance companies..
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Lee Falkenhagen:
@Nik Moushon Try the Federal Land Bank...in Texas. Its Capital Farm Credit..they do all the ag loans over 15 acres...Federal Land Bank and Farm credit I have tried in the past they only lend on income producing farm properties. and you need DEEP experience to get a loan.
I tired to get one on a chunk of land we are land banking 117 acres in Hillsboro Oregon next prop to come into the city and be upzoned to residential its a 50 million dollar property when it comes in .. right now it makes 25k a year growing grass seed.. Anyway I wanted to plant blueberries and was looking for a few million in first position to do this.
Guy says to me do you have a degree in Ag ( me nope just a real estate developer) OK are you second or third generation farmer.. Nope just a real estate developer.. he said those are our two main under writing criteria we would never lend money to anyone without very deep experience in the space.. so no developers are getting loans from us. so got put in my place on that one.
- Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes7y
Originally posted by @Jay Hinrichs:
Originally posted by @Nik Moushon:
Originally posted by @Jay Hinrichs:
if you got those terms above I would be jumping for Joy.. Also the seller is probably not going to release a lot with out some sort of pay down on his note.. so its not like you can use his property to create equity for your down payment. Not sure what you were hoping for but to put a land deal together of this magnitude with only 100k or less is not very realistic.. I mean just to survey out the 20's is going to cost you a bunch.. ( if the county requires a survey.) and maybe there already is one.. I just did a boundary survey on the 37 acres I just closed on for 89 homes. and it was just under 30k. You need tight boundary before you start laying out your lots.. and this was a flat piece of farm ground.. you take 260 acre tract in the mountains.. and that could cost quite a bit right there.
Don't give up your plan .. your just getting a dose of reality on doing bigger land deals. this is not income property that you can leverage into.. UNLESS seller is willing to finance it for you as I stated above.. and its very common to sell these types of properties with owner carry because financing is not readily available as your finding out.
Keep in mind the two largest funders of rural Timber land ( not talking AG land) is the Harvard Endowment fund ( yes that Harvard) and
Big Boston Insurance companies..
My hope was to have at least a partial DP, which I can do, and then have the lot that closes as closing be the rest of the DP. But that would require a lot for it to work out that way.
Like you said, I'm getting a dose of reality. I'm sure those are good term but just not what I was expecting. On top of the fact I dont have that kind of cash for a DP. I'll have to try and find someone that would be interested in this kind of investment to team up with otherwise its a dead deal for me.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.