Posted by Tony Colella on April 17, 2006 at 07:52:34:
David, I wanted to jump in here too as this is a good question and hopefully Ray or Marty will follow up as well.
I have done land/home deals with a variety of different financing. Everything from owner carry to hard money to banks.
The terms for hard money and owner carry are whatever you can negotiate. Combining them with bank financing always worked well to keep me from having to pay any money out of pocket.
The commercial hard money type loans were higher interest rates (anywhere from 9%-11%) with a 20 year term.
I would refi those loans 12 months later with bank financing, usually under terms such as 6%-7% interest for 30 years and sometimes 20 years. This refi loan allowed me to pull cash and because of the better financing terms, keep the payments similar or within my cash flow goal.
The more deals you do with the banks, the better and easier it gets. The first one is miserable in most cases but once you meet the right person in your area who can make the decision, your life gets much, much easier.