Seller Financing Vacant Land Help

[Kenny Breeze]

My partner and I are looking to seller financing a piece of vacant undeveloped land in Colorado. This is our first vacant land seller finance, so we have a couple of questions.

My questions are:

1. Do we need to use a RMLO per the SAFE act and Dodd Frank or are we exempt and can we use any good old background credit check screening service?
2. Do we fall under the 1 or 3 property exemption?
3. I believe vacant land is exempt from the Dodd Frank act, but does the exemption hold if our buyer starts developing and then building on it?
4. What RMLO do you recommend in Colorado? 

Following criteria apply:
The buyers are looking to use the property for personal use
The buyers want to develop the property as soon as possible (install utilities, land entitlements, build a structure)
Our first seller finance deal this year 
Preferably our LLC should be the loan originator and not us as a natural person
5 year balloon

Thanks for all the answers in advance.

[Joseph Cacciapaglia]

You should definitely be directing this question to your attorney. Mine has helped me with a few seller finance deals this year, and there seems to be a lot of nuance to these questions. I wouldn't rely on someone that answers in a forum like this. Many states and municipalities have added additional seller finance regulations, so the answers I received in San Antonio, TX may not be useful where you are. Of course the national rules apply to all, but some states are even more stringent.

I am curious if you're planning to subordinate to their construction loan, or are they developing with cash. My borrowers have paid me off prior to starting construction, because they can't get a construction loan while my land loan is on the title.