NUBIE : needs advise on purchasing 5.53 acers - Posted by Thomas

Posted by Tony-VA on March 13, 2002 at 07:11:13:

It is not unusual for a Lender to ask for a Balloon in this type of deal. Interest rates are down right now and they want the flexibility of refinancing if rates are higher down the road.

Balloons are something I had previously steared clear of. But certain deals reside far enough within my comfort level to make the balloon a moot point.

For example, if properties with mobile homes appraise for quite a bit higher than the $24,000 and I felt that I had solid numbers on what the cost would be to add the land improvements you mentioned, then I would take a good look at what that lender is offering.

For example, if I can get the Land and improvements (water, sewer, electric) for $30,000 or less (I am just picking a number as I have no idea what your cost would be), I would look for a free or very cheap mobile home (or hopefully more if we can work out the improvements). I would get the home(s) set up on the land and do some rehab. Then I would go back to the Lender, get a new appraisal and refinance for whatever percentage of appraisal the lender will provide (80% in this area). Chances are you will walk away from the refinance with quite a bit of cash in hand to go and do other deals.

A relationship like this might set the tone for you to go after a line of credit with this or other lenders.

Or give them a bit more confidence. Let’s say you pull $10,000 cash out of the refinance. Leave that money in the bank and take a secured line of credit against that account. Work with it for a time and prove yourself. Then go back to the bank with your track record and negotiate for a unsecured line of credit. They may ask for a business plan but by this time you will have a proven record and a solid business to document and prepare the plan.

Keep in mind, smaller (local) banks may be your best source.

Guys like ScottS(NC) are masters at these deals. Keep an eye on his posts as I do and you will see just how it can all come together.

Best Wishes,


NUBIE : needs advise on purchasing 5.53 acers - Posted by Thomas

Posted by Thomas on March 13, 2002 at 06:31:00:

There is 5.53 acers w/ 1(1/2) acers already cleared in the next county over from me. The woman is asking 24,000 for the land & I’ve checked w/ the county for zoning restrictions on mobiles & all is a go like avertised in the paper. Mobiles would be accepted with no problem. The land also perks fine, would be able to hook up to county water suppy & electrical power lines are within 500ft of the property. The only problem i’m having is comming up with the cash. I’ve spoke w/ my local credit union but with land they only finance for 5yrs w/ a ballon payment due at the end of the loan unless i refinance. Since I dont know anyone w/ that type of cash on hand finding a private investors would be hard. I just purchased a home in sept. & I have good credit. I would like too apply for & unsecure credit line to have cash on hand for deals i want too do, but im not sure if I would need a bussiness plan or not so if someone could give me a little advice on how too secure a line of credit or any type of way to access cash quickly would be greatly appreciated.
P.S. Have already asked her about owner financing & that was out of the question. I’m also in the military if anyone knows of any special type of loan programs for military.