Where to obtain vacant land loan

Question

Hi, I’m having difficulty finding a company to lend on vacant land in California. The property is undeveloped, and I’m in need of a loan to proceed. Could you advise where investors typically secure financing for similar land purchases? Any guidance would be greatly appreciated!

Brandon Croucier · Answer

What kind of down payment can you put down?

Do you qualify with your Income?

Chris Seveney · Answer

what is the purchase price, and what is the timeline to develop the property? The bank is going to want to know that. Today most lenders will want 30-40% down payment.

Patrick Roberts · Answer

Small banks and credit unions focused on farm/agriculture tend to be the most aggressive with land/lot loans. Try to find one local to where you want to buy.

Andrew Postell · Answer

@Jose Solis you just need a loan for the land?  Not the land and the development of the land?  THe place I would tell you to go first is your realtor or the realtor who is listing the land.  Usually real estate agents have several lenders they know about.  The second place I would tell you about is to try some local real estate meetup groups.  Meetup.com is a good resource for those but some of the groups will also post here on Bigger Pockets Marketplace too.  Even facebook might have some good local groups for you.  Some of those facebook groups have thousands of members. Eventbrite too.  But post locally for this.  That’s the best bet.

Stuart Udis · Answer

@Jose Solis Seems like an obvious question  but is the land developable? More specifically can you get utilities to the site? Have you completed a geotechnical study & are the soils good? Phase 1 completed?  Any local land use and zoning restrictions? Lenders don’t like uncertainty which is why they customarily want shovel ready sites. Without all approvals and all lender required diligence they are often reluctant to finance land. When they do, expect much lower leverage.

It sounds like you haven’t purchased the land yet. Can you extend settlement in order to get approvals?

Jose Solis · Answer

@Brandon Croucier i would be able to put around 70-75k down, and should qualify with my income

Where to obtain vacant land loan

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