Land Loans

All About Hard Money Land Loans

So there’s a piece of property you’ve been looking at for awhile. It’s perfect. You’ve done all your research and you’re ready to buy. But before you go to a bank, you should know that banking institutions don’t typically approve loan applications for raw land. But what can you do? Keep reading for all the details.

Why Banks Don’t Like to Lend Money for Land

To a bank, every transaction is about the profit they stand to make. With raw land, the property just is. It hasn’t been improved or possibly even zoned. It doesn’t produce rental income. There’s a lot of risk and even if you are approved, there rates are higher while the LTV (loan to value) ratio is lower. These restrictions are put in place to protect the lender – not you.

But what if you could bypass most of these restrictions – and find a lender that’s willing to look at your case specifically – not look at you like another number. You can, with hard money lending.

What You Need to Know Before Buying Land

Before you even buy the land, it’s important to ensure that your plan for the property is workable. You’ll need to consider factors such as the zoning of the land as well as determine what improvements (if any) have already been done. This can include things like utilities, sewer or roads. You’ll also need to have the property professionally surveyed to see property lines, easements and land access.

If you’re looking to buy land and need access to funding quickly, it’s very important that you create a plan that shows how your purchase will improve on it. You’ll need a concrete strategy to pay off the land loan – and that’s where hard money can help.

The Hard Money Alternative

Hard money is a potential alternative to getting a land loan from the bank. Rather than waiting and going through reams of paperwork only to be denied because of things like your credit history or past bankruptcies, hard money (also known as a private money loan) may be able to help.

With hard money, secured collateral (usually other real estate) is put up to secure the loan. Private money lenders pay less attention to things like your credit score and more to the value of the collateral you’ve put up against your land loan.

Hard money lending works for many different types of real estate, including land, and can often provide approval and funding in as little as 15 days or less. You can often get pre-approved for a hard money loan the same day. This means you can get the funding you need to further develop the land and bring your vision to life.

If you’d like to learn more about hard money land loans, you’re encouraged to speak with a knowledgeable hard money real estate investment team with experience lending money for land. With competitive interest rates, low origination fees and a fast approval process, there’s no reason not to learn more about how hard money land loans could be just what you need to help fund your property purchase. Call Lending Bee at (818) 584-2424 or email us using online contact form.

Related Information: Construction Loans | Fix & Flip Loans

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