Getting a lot loan

[Damian Baynes]

Hey everyone,

I've come across an opportunity where the seller owns a large house and also owns a vacant lot adjacent to the house and is trying to sell them as a package deal. This deal is pretty enticing to me because down the line I would like to get into development, though I'm not quite ready yet. Need more time to understand the process. My question is how would I go about getting a loan to purchase the lot? Even though I would buy them as a package they are technically two separate properties and I'm guessing I would need two separate loans for the two is that correct? Are lot loans difficult to get? I do not plan to build on the lot for about maybe another 6-8 months. Any advice in this area would be greatly appreciated.

[Bill Gulley]

Lot or land financing is generally limited to 50% LTV, so you need half down and it needs to be a marketable property. Construction financing usually hits in at 80% LTV but could be more depending on you having an end loan to pay it off. The land needs to be free and clear for the construction financing. That's the basics off hand. :)