Land loans in California are making a comeback! We are able to help with hard money land loans of many types, including AG land, special use land and vineyard financing, as well as commercial and residential land regardless of whether it is raw land or shovel ready.
While the real estate markets are still depressed, there has been a shift in perception and the outlook is not nearly as gloomy as it has been in recent years. With that shift comes financing opportunities that have been absent for many years. Land financing is one of those.
Anyone who has tried to finance land recently should understand the issues. There was a period of time where it was almost impossible to get land financed. These days land is still a tougher sell than fully improved property, and the loan to value ratio is lower (typically we are looking at 30-35% loan to value), but for those who have been unable to pursue a project due to not being able to obtain a land loan, this should come as welcome news.
A few items to keep in mind when considering a hard money land loan:
If the land has been purchased in the last few years, most likely the purchase price of the land is going to be a cap on value we can assign to it for lending purposes. There are some exceptions, but generally speaking this is going to hold true.
Secondly, although we specialize in hard money and private money loans, it does not mean that a land loan will be undocumented. You should expect to be required to show the ability to service the loan, as well as have a good exit strategy through either improvement or sale.
Finally, the purpose of any cash out requested on a land transaction may be limited. Encumbering land to take cash out is still difficult. Encumbering land to improve it is a much more realistic scenario.
As real estate continues to recover, land loan requirements will continue to loosen up from where they have been in recent years. For more information, or to discuss a land loan, please contact me directly. You can reach me at 877 462 3422, or you can visit our hard money loans page on the web.
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