Developable Land with single family home on the lot

5 Replies

Hi Professionals,

I need help here.

We bought two adjacent parcels (around 1 acre) which could get the entitlement for 30 townhomes.

Currently, each parcel has one house on it ( total separate lot). Both of the houses are rentable.

We paid more than what the sfh would appraisal for since we paid extra for land. We closed with hard money at this moment for 30% LTV and 9%.

The entitlement process going to take around 1-2 years. We want to get down to 5-6% with 30% LTV during holding period. Do you think it is possible? Or any of you know the lender could help us?

Thank you so much for help!


Hello Stephanie! SFH's are OK if you can get a good discount and plan on buying many to pay all of your bills. I don't think a new home will be cheap enough unless the builder is very motivated and/or in trouble. Proceed with caution and go by your goals.

Good luck to you!

@Stephanie Yi Yes, you said you were at 30% LTV with the hard money lender. If that is the case, just refinance the 2 properties as rentals. You can go up to 75% LTV on a Fannie / Freddie loan. This will get you the lower rates you want. Based on your current equity position, even though you paid more than what the appraisal was, you should be just fine. If you need a referral to a lender in your area, let me know?

I hope this helps?

@Stephanie Yi

The quick answer is yes. But before you run looking for a lender and get a no or a rate that is not what you expected there are more pieces to then puzzle to consider. Not all lenders are equal and they look at each deal and fit it into their loan programs. So a niche lender (Loan program) might be needed.

Please answer the follow:

How long have you owned the property?

Some lenders will restrict a min time owned.

Is the property owner(s) a LLC, trust, Corp, multiple owners?

Some lenders don't allow LLC trust Corp.

What’s the owner(s) mid FICO?

This is a pricing factor lower Fico higher interest. To low no loan or low LTV.

Is the property rented?

Lenders will see if it's creating income, won't touch it if they are vacant. Some will at a lower LTV. Or rate will be close to HML.

Location of the property?

not all lenders are nation wide or lend in rural communities are restricted to certain states. Etc....

If you feel more comfortable not sharing in public PM.

Your deal has good potential let’s get you to the right lender and save you time and $.

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