Thanks Wade. I figured it was in the 40-50% down range. We are looking at a few nice pieces of land right now. The most prime one has a house on it. At first I thought this was a liability but I’m starting to think this is a good thing. If we get it this will be my first development project so I hope it works out. My partner has built subdivisions before so I have a good mentor to walk me through the process and make sure it goes relatively smoothly.
I am looking at some prime undeveloped land for sale that’s ripe for development. Can someone tell me what a lender usually typically expects down for this type of transaction? And how would this % change if there was already a house located on the property?
Hi Mike,
The tough part in vacant land is that banks usually require larger downpayments(I live in CA , your area could be better)typically 30-50%. Depending on the loan to value if you buy at a great value that could keep your out of pocket cash down. If their is a house that is a big plus. You can get a loan alot easier and live in the house during development or rent it to help carrying costs. (Be careful to keep your intent to yourself.) I lost a lot split property because the appraiser told the lender I was going to develop and the lender thought it was a risk , didn’t fund. Be careful because it always takes alot more time and money than you think! I Hope that helps.Feel free to E-mail me if you have any questions. Wade