Very few conventional lenders are willing to make loans on land, regardless of the stage of the entitlement process.
At Direct Investors we offer many types of land loans and financing programs for both commercial and residential developments. Hard money land loans are among the hardest to acquire, so it is important to be prepared and find a lender that makes a sizable amount of these loans to experienced investors.
Land is much harder to value depending on its location and there is a greater risk to the lender. These loans typically do not exceed 50% to 65% maximum loan-to-value unless the land is in a very desirable location or you have other properties you can cross collateralize.
There are also several types of land ranging from raw land to developed land, or from a single lot to an entire subdivision. If the land is surrounded by commercial or residential properties, the land is more attractive collateral to the lender.
Along with the land type and location, we consider the character of the borrower. Is this your first development? What experience do you have? How much cash do you have in the project? What is your occupation? These questions and more will help us understand the level of risk, and ultimately how much we are willing to lend and the terms of the loan.
Land loan sizes range anywhere from $500,000 to $20 million and may be made at nearly any stage of the entitlement process, including raw land with no entitlement to fully entitled land.