5 acres for $50,000

[Samuel Coronado]

I have some land about to be under contract where I plan to clear it, reinstall the utilities, and either build on it or have a smaller new home built on it. I'm having trouble finding someone to lend on this. I am confident the land will appraise by itself as smaller 1 acre pieces are going for 20k a piece right next to it. I've called a couple banks and they say they don't lend that low or they want 35-40% down, which would take away from my working capital and slow down the process. I am gathering some investor friends now to go in, but was hoping to do this small development without giving up equity. 

[Jay Hinrichs]

Quote from @Alecia Loveless:

@Samuel Coronado My experience with building lot purchases is they’re usually only worth what you pay for them once. Then they go down in value.

I bought a lot 18 years ago with the intention of building a home and moving there because my best friends lived next door. They ended up bankrupt and foreclosed on and I moved somewhere else.

14 years later my lot in a town where building had boomed, housing prices were up about 40% and there was solid population growth had gone from being worth $28,500 to being sold for $19,000. And I had paid over $20,000 in property taxes on it.

The reason your seller hasn’t sold the lot for $50,000 is because it’s overpriced.

land has very little value if existing homes are selling for less than New build replacement costs. which is pretty much half of the US.. and especially in the mid west and rust belt areas.. building lots have value in dense urban areas where new infill is going on in a big way.. Like Charleston SC or pretty much any West coast bigger city  , North side of Chicago , and the finer areas of the US.

There is a whole land flipping niche out there in the RE space I fund a few of them and frankly they kill it if you know what your doing and where to make your buys. Far more profitable than SFR s given the capital required and time to flip them..  I funded one in Feb for 65k and it sold for 115k in 7 days cash out cash in .. split profit with my client he finds them I provide the money its a wonderful business..

The terms the OP was offered are STELLAR for land only purchase Not sure what he expects I am surprised he got anyone to lend with that little downpayment on dirt.