Getting a land loan may seem like a solution for borrowers looking to make a quick buck off the real estate market. However, it’s important you know the real deal about investing in land and working with hard money lenders before you jump into any loan agreements.
Whether or not a land loan is right for you really depends on your financial situation and who your loan lender is. Traditionally, borrowers go to public money lenders, like banks or credit unions, for their loans. Qualifying with a traditional loan lender usually means steady income, a great credit score, and a reasonable debt to income ratio.
When borrowers don’t qualify for traditional loans, it is still possible to receive approval from Private Money lenders, usually companies or investors, who offer hard money. Hard money is an alternative option with flexibility. Borrowers prove their potential to the lender first through the means of the project, then through their ability as a borrower. They can still be rejected, however, for many borrowers it can be a backup plan for their projects.
Choosing to invest in land can be a profitable decision if you put in your research first. The last thing you want to do is get sucked into a land loanand be unable to meet payments or interest rates because your property wasn’t what it was cranked up to be. So, what should you look for in land?
Location is prime. Investing in a property that is near business, school, and entertainment districts make it a good option for potential buyers in the future. Being aware of any developmental plans in the neighborhood will be key to knowing how your land could possibly fare in the future. While buyers may choose to build an upscale, modern home, it is important to consider how it fits in with the neighborhood and existing community.
Location is also important when it comes to other things: power, curbs, sewers, and water lines. No one is going to want to purchase a home that can’t feature the basic amenities of a home. Additionally, you’re going to need to consider if the neighborhood is under HOA or if the city has special requirements when it comes to building.
If you are seeking out hard money loans, consider Level 4 Funding. With no upfront costs and a free phone call to discuss your financial situation, we can determine what land loanis right for you. As we are Private Money lender, we can offer services that are unique to your financial situation. If you are tired of shopping around, give us a call today and finally make your dreams reality!