Financing Residential Developments - Posted by Jim

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Financing Residential Developments - Posted by Jim

Posted by Jim on April 29, 2004 at 15:31:23:

I am inquiring to find lenders who will finance the purchase of raw land and possibly construction money for improvements (i.e. roads, utilities, etc.)for creating residential subdivisions in PA.

I am an experienced licensed professional engineer working for a small engineering and surveying company.

Thanks

Re: Financing Residential Developments - Posted by john bruno

Posted by john bruno on May 06, 2004 at 12:12:22:

Hello,
No matter what anyone tells you, your credentials and experience don’t mean as much as CASH. Lenders to developers/development want to see you have a financial stake in the development…usually 25 5o 30% of the cost of the initial land purchase.

Development lenders go all over the country for the right kind of projects. If you are doing a small, 7-home development, you should try to find local money.

As always, however, CASH is king!

Re: Financing Residential Developments - Posted by cam

Posted by cam on April 30, 2004 at 10:39:26:

Which part of PA?

Re: Financing Residential Developments - Posted by wes

Posted by wes on April 29, 2004 at 17:41:02:

The size ($$$) of the project has a lot to do with who might be willing to get involved.

Send me details or post them here for others to see and I will let you know.

Acres, land cost, initial development cost, how many homes and what price range, etc.

wesloans@earthlink.net

Re: Financing Residential Developments - Posted by Brad

Posted by Brad on May 07, 2004 at 14:10:18:

I’m working with an LLC and we have a large development into the millions of dollars. Who are some good development lenders to contact?

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Re: Financing Residential Developments - Posted by Jim

Posted by Jim on May 05, 2004 at 06:55:36:

South western PA.

Re: Financing Residential Developments - Posted by Kathryn

Posted by Kathryn on July 04, 2004 at 23:31:21:

Hi Wes,

You have the same name as my hard money lender!?! I want to buy a 3.5 acre of land with waterfront property (on the river). It is in a sleepy bedroom town and I want to develop. The price is $875k but I know I can get it a little over $800k. I talked to the owner & I used the “range” technique and she wants over $800k but is ok with $810, but only if I pay “cash”.

Anyhow, I would love to put in 7 or 8 houses. It is partially cleared and the waterfront is all cleared. The 3.5 acres are the length from the road to the water and the width is about an 1.5 acres. Should I put in more? I only ask because the developers here put so many houses in an acre, that I probably can fit 24 houses!

I am emailing you to find out how you can help me. I have the idea and dream. I have the “gift of gab” and can make connections. But I have never dealt with developers or big time investors.

I was just toying with ideas of cost. I researched and found a ball park of $1.5 million to put together. Land, utilities hookup, surveying, permits tree clearing, and the short culdesac. I have not talked to any developers yet and I would love to partner with them. I would like the houses to 2000sq and up with each lot retailing for 125k plus house. The waterfront can hold 2 houses or just one giant one and of course, 500k per lot plus house. Does this sound unrealistic? Actually, I was hoping to have a seperate boat access for all the homes
in the culdesac included in their homeowners fee or just factor it into the lot price increasing the price 75k or something. What do you think?

I know I am a dreamer but someone has to do it. But realistically, can a small time real estate investor pull this off? I mean, the only difference is that I am dealing with alot of money instead of a little and I will be working with a developer, not a buyer. Or is this the “same difference”???

I would appreciate any feedback bad or good from anyone wishing to respond. Thanks…

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Re: Financing Residential Developments - Posted by john petrulis

Posted by john petrulis on May 07, 2004 at 19:26:10:

Brad,

When others say “no”, call REBCO Business Services.

I’m a commercial loan broker. The answer to that question/your question is my business.

I would be happy to discuss your development and prospective lenders with you.

Give me a call at 815-469-4520 or email me at:
havecash@aol.com

Re: Financing Residential Developments - Posted by David Krulac

Posted by David Krulac on May 07, 2004 at 19:21:38:

I like small local lending banks, where you can talk eyeball to eyeball with the person who will make the decision on yea or nay. I like if there is a problem, I can go to their office.

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Re: Financing Residential Developments - Posted by cam

Posted by cam on May 05, 2004 at 09:05:02:

Financing is possible up to 100% of the bulk value of the lots. 90% is more likely.

This assumes:

You can demonstrate experience in residential development
The loan is request is not greater than 70% of the value of the lots prior to take down
Complete construction budget and pro-forma financials
Have solid credit and sufficient net worth
Can line up sufficient lot pre-sales to builders prior to funding
Have a feasibility plan completed
Have a site assessment and plan completed

You will of course have to have all planning completedand there will be much more involved to get a commitment. The items above are your first considerations when seeking financing.

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