Obtaining a land loan is generally considered more difficult than getting a traditional mortgage because lenders view land as a riskier investment due to the lack of a structure to use as collateral, which means you will likely need an existing relationship, a defined purpose and a massive down payment. Even if your lender offers land loans, they will ask for a detailed plan for how you intend to develop the land, which could include construction timelines and intended use.
Select Capital offers tailored financing solutions that are creative, flexible and fast. We partner with private lenders that have a long history of real estate investment and are also developers. They can take on more risk since they know what to do with the property in a default situation. They understand the land space much better than your current bank probably does. In general, private direct lenders have been in the same business as you are which allows them do see the value of the project when banks and bankers are unable to. They are also much easier to work with than traditional lenders.
Direct land lenders will help developers and investors buy Raw Land, and Pre / Mid / Fully entitled Land. They provide a bridge type program which will allow the developer to buy raw land, entitle it, and resell for a profit over 1-2 years.
Deal Type should have the following parameters:
$1 million to $20 million in funding / 12-24 month time frame / 50%-60% Loan to Value
Used for acquisition, cashouts, value creation through entitlement and resell.
Average investment size for land is in the $5 million range with a minimum deal size of $1 million.