Location: California
Submitted 05/23/12 04:08 PM

Q. A BROKER TELLS ME I CAN BORROW 100%LTV ON MY RAW LAND. AND THE LAND WILL BE LEVERAGED 10TO 1 BY INVESTOR AND AFTER 5 FIVES THE LAND WILL BE RETURNED TO ME AS LONG AS I MADE MY PAYMNETS ON TIME. IS THIS POSSIBLE?

 

Answer #1
Submitted 05/23/12 04:17 PM
Dave Korte (Mak Home Realty): Agent in Yorba Linda, CA Dave Korte (Mak Home Realty)
Agent
Yorba Linda, CA

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A.

Not possible through conventional lenders.  But anything is possible, I guess.  Sounds fishy I would be careful.

Answer #2
Submitted 05/23/12 04:33 PM
Steven Cook (MLO #293441) Pierce, Kitsap, Thurston, King Counties, Steven T Cook (Cascade Pacific Home Loans - Federal Way, WA): Mortgage in Tacoma, WA Steven Cook (MLO #293441) Pierce, Kitsap, Thurston, King Counties, Steven T Cook (Cascade Pacific Home Loans - Federal Way, WA)
Mortgage
Tacoma, WA

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A.

As a mortgage lender, I would find it hard to believe that this is going to take place as described.  First off, the only two ways one might get 100% financing on bare land are: 1) from the owner/developer who is selling the land and carrying his own contract or 2) from a hard money lender (charging 10-15% interest) who believes the property is worth considerably more (50-100%) more than what you are paying for it.

Secondly, where is this investor coming from, how does he plan to leverage the property at 10-1 and still have the property to return to you?  Also, what is the investor paying you for the opportunity to use your land like this?

As Dave said, I would be very careful, and have an attorney review EVERYTHING before starting to sign ANYTHING.

Answer #3
Submitted 05/23/12 08:02 PM
Tim Lorenz - 949 874-2247 (TIM LORENZ of Keller Williams Realty): Agent in Mission Viejo, CA Tim Lorenz - 949 874-2247 (TIM LORENZ of Keller Williams Realty)
Agent
Mission Viejo, CA

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A.

I ran the Homeowner Fraud Unit for Los Angeles many years ago. 

The best I can tell you is if it sounds to good to be true it is. 

If someone can leverage the property what is the risk?  What if they fail in what they are doing do you lose your property?
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