first land home deal - Posted by Ray (MO)

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.


first land home deal - Posted by Ray (MO)

Posted by Ray (MO) on April 16, 2006 at 09:48:22:

Marty and I just closed on our first land home deal on Friday. For those of you who were at MOM in Atlanta, we talked about it then and took this long to find the financing. The point is we went to multiple banks and they all said NO. We kept trying and persistance paid off. We paid $33,000 for a prop in the middle of a booming suburb and it appraised at $50,000. The Banker originally offered us 70% LTV but after the appraisal came back he said “I bumped it up to 80% LTV since your buying for so far below appraised value.” All we could do is laugh.
Happy Easter all!

Re: first land home deal - Posted by David Eppley

Posted by David Eppley on April 16, 2006 at 21:50:00:

Congrats! I am curious about the cost of the loan. Would you care to share with us at what interest rate you were able to secure the loan? Thanks so much, David.

Re: first land home deal - Posted by Tony Colella

Posted by Tony Colella on April 16, 2006 at 19:47:08:

Ray, congrats to you and Marty, especially on your persistence in locating the financing. So many folks give up before they reach the decision maker who can hand them the cash. Working with bankers is not fun at first and we all get a lot of “no’s” but once you get in front of the right person, life gets easier. Let’s face it, the banks have the cheapest money and essentially unlimited supply. Congrats on hanging in there.


Re: first land home deal - Posted by osupsycho (OK)

Posted by osupsycho (OK) on April 16, 2006 at 19:42:20:

Glad to hear your persistance paid off.


Re: first land home deal - Posted by bmeesh

Posted by bmeesh on April 30, 2006 at 15:54:34:

I certainly gleemed something from this as I just did a post today…I have seller finance 30 year, 6.25% with a 4 year balloon. I am only putting down 10% but I would really like to pull out the cash and refi it down the road…I am closing in June. I have the cash but it will be a stretch and was wondering if there was a way to not use my own cash for the down.
I have a good bank I am working with down in the Keys for the refi…I closed something down there for a client so I made some nice inroads.