No woman, No Cry, Using Property Owned As Colleterial

Investor · San Antonio, TX · Member since 2018 · 188 posts · 53 votes

Hey, everyone.

I own five acres of land that is paid off. Nothing is build on the land. The value around $20k according to the local tax office. Can I use it as colleterial for a loan to add to the down payment amount for a new prospective investment property. Then refinance the property repaying loan? Is that possible some how? I do not want to build on it. How can I use the property to help me access money to invest?

Thank you!

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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
2y
Quote from @Juan David Maldonado:

Hey, everyone.
I own five acres of land that is paid off. Nothing is build on the land. The value around $20k according to the local tax office. Can I use it as colleterial for a loan to add to the down payment amount for a new prospective investment property. Then refinance the property repaying loan? Is that possible some how? I do not want to build on it. How can I use the property to help me access money to invest?

Thank you!

Theoretically, yes, but no one is going to loan you anything based on that. It's worth relatively nothing already. If you were going to build on it, then you might get a construction loan using the land as your 10-20% and convert it to a 15/30 when you're done building. The only worth collateral has to a bank is how easily it can be liquidated in the event you default. I'm guessing 5 acres of land that's worth 4k per acre isn't going to be very easily to liquidate.
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Ron S.
Paradise, CA · Member since 2015 · 1k+ posts · 871 votes
2y
Quote from @Juan David Maldonado:

Hey, everyone.
I own five acres of land that is paid off. Nothing is build on the land. The value around $20k according to the local tax office. Can I use it as colleterial for a loan to add to the down payment amount for a new prospective investment property. Then refinance the property repaying loan? Is that possible some how? I do not want to build on it. How can I use the property to help me access money to invest?

Thank you!

the short answer is no. That land doesn't convert to cash for a downpayment, unless its encumbered or sold and no institution is going to lend on a $20M piece of property.
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