Vacant Land Refinance |
| Posted by: Rick Wahl Aug 4 2004, 02:44 PM |
| I own slightly more than 9 acres of vacant land in my corporation. It is worth between $1,200,000 and $2,000,000. My first mortgages are coming due and the existing lenders want the vacant land out of their portfoilio and will not refinance. The land consists of two properties adjacent to each other with first mortgage balances of about $107,000 and $158,000. What is my best option for refinancing these and pulling out some cash for operating income???? |
| Posted by: The Fox Aug 4 2004, 02:58 PM |
| There are no standard programs for financing vacant land, so your options will likely depend greatly on the competitiveness, etc in your area. QUOTEWhat is my best option for refinancing these and pulling out some cash for operating income???? When I hear that, I’m thinking using the cash you pull out of your land to finance operating losses – which could be a real reason the bank wouldn’t want to lend you the money. Whereas the LTV would be very good, that’s always unappealing. Is that a possibility? |
| Posted by: loanuniverse Aug 4 2004, 10:39 PM |
| Rick: The good news is that if the land is worth that much, you should be able to get a lender. The bad news is that a mainstream regulated lender does not base its lending decisions based on collateral. There needs to be a viable source of repayment. Something else that caught my attention was your mention of ”… pulling out some cash for operating income” There is no way that cashing out some of the equity should be considered “operating income”. I don’t know all the numbers, the situation or your plans. However, I think that speculating on land can turn into an expensive way to make money if the land does not appreciates as much as you expected. After all, cash goes out to pay debt service and taxes, but none comes in until you sell it. Good luck. |
