Need help creatively financing this deal; 13 acres - Posted by SteveA (FL)

Posted by David Krulac on April 27, 2006 at 06:33:29:

building in the flood plains is difficult and in some areas impossible. FEMA regulations allow you to build in the flood plain but require that you build above the flood level. some local juridictions have taken it further with more stringent requlations all the way up to not allowing any building in the flood zone.

Also there are different flood terminalogy:

Flood plain

Flood way

100 year flood zone

500 year flood zone

You need to know the definaitions of these terms. FEMA publishes flood maps for the entire country. The local government or the county government should have these. Go look at them as it pertains to this property.

In addition there are areas where the FEMA maps don’t cover, typically small streams. The FEMA standard here is that the flood zone is 50 feet on each side of the stream. This may or may not be accurate depending on the terrain. If the bank of the stream is a cliff it might be less than 50 feet and if very flat might be greater than 50 feet.

Other things that you don’t mention which can impact the ability to subdivide include:


Streams & Wetlands crossing (require Federal permit)

Suitabilty for septic systems or availablility of public sewer and water.

Utilities to site

Endangered species

Significant historic site


Minimum lot sizes & minimum frontage

Costs of building a road

Costs of other infracstucture

etc. etc. etc.

Need help creatively financing this deal; 13 acres - Posted by SteveA (FL)

Posted by SteveA (FL) on April 27, 2006 at 06:04:24:

Hey all. My brother in Louisiana has signed a contract on 13 acres with a house. He’s looking for advice on ways to creatively finance this obviously with what works best for him; low rate, low payments, etc. I told him the experts out here could provide us with some good options! By the way, this property is close to New Orleans and in an area where people are migrating to because it’s not in the “bowl” and is much less prone to flooding. And we all know the condundrum of the housing market in that area. Here’s the scoop;

Sale price $515,000. Seller wants $265,000 now and is willing to finance remaining $250,000 with low payments for 5 years, possibly no payments for 2-3 years. The property is 13 acres so parts of it could be subdivided and sold to help finance the remaining property. Sale of existing home should provide about $130,000 via equity. Another $100,000 should be available in 3-4 months through sale of existing investment property.

Thanks gang!!!

Re: Need help - Posted by Joe

Posted by Joe on April 27, 2006 at 09:37:48:

My father is involved in a deal currently where there is a loan on 40 acres and he is attempting to split off portions and sell them. The zoning is ok, the problem is the lender. The property has appreciated a lot, and the loan could be covered with only 20 acres. But you need to convince the lender of that, and get them to release their loan on the part you want to sell. I’m guessing you could refinance to fix this, but that’s another set of fees.

Re: 13 acres - Posted by Sailors

Posted by Sailors on April 27, 2006 at 09:00:16:

Accepting your valuation of the house @ 130k & allowing that a tiny bit of land goes w/it, your brother is paying 30k an acre. Maybe it is worth that much, but I can’t tell from the info you’ve given. Are you sure it can really be subdivided? What is the cost of that? What is the value subdivided? If you & brother are locals, you know more about values, but if not, it is time for a real quick education. (Note: Southerners don’t sell land unless they are going to make a real killing.) Perhaps you could provide more details so we can be of more assistance–