Land Development Loans
Real estate investors have a long way to go when choosing to invest in lands instead of properties ready to move or with some needs of renovation since they have to rely on land development loans most of the time.
Overall, being a real estate investor means you have to be familiar with the properties and projects you can invest in but also, in the loans and methods to obtain the funds. After all, banks and lenders don’t work in the same way nor offer similar terms for every acquisition or credit required for a project.
The purpose and origin of the project and investment are important to apply for the credit, which is why several types and options are depending on your needs and goals. If you are an investor or possible owner that is aiming for land development, you will have to focus on getting a land development loan that helps with the acquisition and preparation of this specific piece.
Meanwhile, other loans such as a commercial or residential development focus on finishing a piece of real estate to have the return of the money or use it as a passive income. But what does land development mean before anything else? That you need the funds to purchase de raw land where you want to build a future property, either residential or commercial, as an owner or interested person in the land.
But for real estate investors, it is about purchasing the land and preparing it for future constructions and projects. The business in this is reselling the land but after it has been improved and make it a site ready for construction. To access the loan for this investment, you need to rely more on private options than banks and other institutions since obtaining ANY development loan isn’t usually possible from the last two.
Banks are quite strict in the requirements to fulfill and don’t approve most of the land development loans out of fear since, statistically, investors in the land don’t usually repay the debt but use the space as collateral and therefore, payment method.
However, private lending companies have fewer conditions, terms, and can offer more money that covers a large percentage of the expenses. At Commercial Real Estate Loan Pros of West Palm Beach, we can offer you two types of land development loans without many conditions but with low-interest rates.
We only request to see the land you’ll purchase, know the plans for your project, and the basic information of your status and person.
Is the credit made for purchase only?
The name of the loan actually gives out its main purpose: development. Although borrowers request it to be able to purchase the land, part of the funds is also for its preparation and improvement. In short, it is for the entire project of researching a land, buying it, and improving the entire space to ensure it is optimal for construction.
Therefore, no, it isn’t only for purchase but rather an entire process of acquiring it and preparing every single aspect, even including the surrounding infrastructure like water supply, plumbing, sewage, and more. This is why you can expect the credit to be a large one with different interest rates but also, other terms and conditions when compared to commercial development loans or residential ones when everything’s about the main structure.
Types of land development loans for your investment
There are 2 different types that go according to two possible plans when acquiring a land:
- The basic development loan: works like any other credit where the borrower requests an amount of money and repays it with interest in periodic installments established by the lender.
- The secured purchase loan: offers a lower interest rate for the borrower but in exchange for using an asset that serves as collateral in case of not repaying the debt.
The main loan that is commonly requested offers most of the funds to acquire the land and start the preparations from zero. This description fits perfectly what we mentioned before and also, the previous types. However, there is an extra type of loan that consists of an acquisition and development loan.
This one is made for lands that already have certain infrastructure or certain areas developed. Since this is a different project compared to starting everything from zero, our team at Commercial Real Estate Loan Pros of West Palm Beach can offer you this loan to cover the specific needs. But what does it cover? The purchase of the land and any improvements required prior to the development stage.
You can apply for any of the options available as long as you take your time to determine which ones fit your needs the most. With that said, the payment of every loan focuses on monthly ones and with different interest rates based on not only the final one you choose but also the loan size and repayment time.
Why get your mortgage with us
We are sure you must be thinking about how difficult it will be to apply for one in a bank or other institutions, so this is probably the main reason why you’re making the decision of relying on private lenders. However, the reason why we encourage you to apply for the loan with us goes beyond this.
We are one of the few private lending companies in West Palm Beach that can offer you conditions and terms around your needs and situation. If you are a real estate investor that wants to obtain the land for reselling purposes, we will make a plan and credit based on this.
But if you are a potential owner of the land that only needs some help to prepare it, our team at Commercial Real Estate Loan Pros of West Palm Beach will work around that. There’s a lot involved in the process of acquiring the raw land, preparing it, and use it either as an investment to resale and have revenue or even a passive income in the long-run. There’s a lot for you to investigate and research as a real estate investor or just a buyer, but we are here to also offer this assistance along with our low rates, simple requirements, and different loan sizes.
There are so many areas or regions where we offer these services with most of them being cities.
However, if you need any of these services, you need to contact us. The list below comprises the areas where we offer these services.
We service all counties and cities throughout South Florida. However, if you need any of these services in other cities throughout the state of Florida, please contact us. See what services we offer below: