Financing Land with a Home that Isn’t Able to Be Lived In

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Financing Land with a Home that Isn’t Able to Be Lived In

Andrew Wilfong
Member since 2022 · 6 posts · 1 vote

Hello,

My wife and I live in Pennsylvania.

We’re in the market for a plot of land with a home that is livable or raw land that we can later build on.

Recently we found the land that was exactly what we want, however there is a home on the property.

The home on the property isn’t livable because there’s no HVAC system, there is damage to the roof, and the foundation is not in working order, not to mention the electrical issues and water damage in the home.

The sellers are trying to accept cash only offers because of the condition and are selling as home and land, but have not received any offers and are becoming open to a buyer going through the bank.

Because the home isn’t livable, how could this property be financed so that, we as the buyers, could completely gut and renovate the home?  

Because of the HVAC alone, a traditional mortgage doesn’t seem to be an option.

Is this possible and what would the sellers/buyers need to do in order to be able to do this?

Thanks!

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  • John CardinalePro Member
    Member since 2021 · 77 posts · 44 votes
    3y
    Quote from @Andrew Wilfong:

    Hello,

    My wife and I live in Pennsylvania.

    We’re in the market for a plot of land with a home that is livable or raw land that we can later build on.

    Recently we found the land that was exactly what we want, however there is a home on the property.

    The home on the property isn’t livable because there’s no HVAC system, there is damage to the roof, and the foundation is not in working order, not to mention the electrical issues and water damage in the home.

    The sellers are trying to accept cash only offers because of the condition and are selling as home and land, but have not received any offers and are becoming open to a buyer going through the bank.

    Because the home isn’t livable, how could this property be financed so that, we as the buyers, could completely gut and renovate the home?  

    Because of the HVAC alone, a traditional mortgage doesn’t seem to be an option.

    Is this possible and what would the sellers/buyers need to do in order to be able to do this?

    Thanks!

    You will need to get a renovation loan that will include acquisition and renovation in one loan. 

    Will this be your personal residence or rental ? 
    0Reply
  • Andrew Wilfong
    OP
    Member since 2022 · 6 posts · 1 vote
    3y

    Hello,

    Thanks for getting back to me!


    The desire is primary residence.

    0Reply
  • John CardinalePro Member
    Member since 2021 · 77 posts · 44 votes
    3y
    Quote from @Andrew Wilfong:

    Hello,

    Thanks for getting back to me!


    The desire is primary residence.

    seemingly wherever you could could a lot loan for eventual new construction you should be able to get a renovation loan. I've only been about to due new construction loans from local banks but other options may exist. The DSCR lenders here will want to underwrite scenarios that include renting it out only. They also do renovation and acquisition loans but for investment properties which doesn't really help you out. Do you own your current home? Have equity? Can you use this to leverage a purchase somehow? 
     
    0Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    3y

    @Andrew Wilfong FHA has a 203k loan….it covers purchase and renovation. It is somewhat popular for medium level renovations. Like any other renovation loan, creating a Complete, detailed scope of work and a Quality legitimate GC is the key.

    0Reply
  • Dennis Muno
    Lender · Denton, TX · Member since 2023 · 349 posts · 80 votes
    3y
    Quote from @Andrew Wilfong:

    Hello,

    My wife and I live in Pennsylvania.

    We’re in the market for a plot of land with a home that is livable or raw land that we can later build on.

    Recently we found the land that was exactly what we want, however there is a home on the property.

    The home on the property isn’t livable because there’s no HVAC system, there is damage to the roof, and the foundation is not in working order, not to mention the electrical issues and water damage in the home.

    The sellers are trying to accept cash only offers because of the condition and are selling as home and land, but have not received any offers and are becoming open to a buyer going through the bank.

    Because the home isn’t livable, how could this property be financed so that, we as the buyers, could completely gut and renovate the home?  

    Because of the HVAC alone, a traditional mortgage doesn’t seem to be an option.

    Is this possible and what would the sellers/buyers need to do in order to be able to do this?

    Thanks!


     Hello Andrew,

    If you are buying the property for a primary residence, an FHA 203k or conventional homestyle may be an option for you.

    If you are buying for investment now or in the future, a bridge interest loan option may be the option for you.Private money too may be an option. Lenders will want to know what you plan to do with the loan and after the loan

    0Reply
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