Land Deal - Financing Required - Half Moon Bay California

[Robert Smith]

Hello, 

I am new to bigger pockets but have completed two fix and flips and am currently half way through a fix and hold. 

After finding BP a couple of month ago and getting very excited I started looking for a land deal. I am now in conversation with a potential seller but because of the ongoing fix and hold I am short on the capitol I would need to secure the land deal. Because the fix and hold is not finished, I don't have the option to cash out for at least another 6-12 months. 

If anyone has any ideas about how to get financing to secure the land, I would be grateful for some advice on seeking out options. I am only looking for the initial purchase price (250 - 300) because once I get the land and have the planning/zoning approval, it should be easier to get more conventional financing. 

The Deal look like this:

- Purchase price between $250,000-$300,000; 

- Planning and Zoning approval through the California Coastal Commission $30,000-$50,000;

- Building permits $20,000 - $30,000; 

- House construction $250,000 - $300,000 (depending on house spec); 

- Comps in the area start at $750,000 and go up to $900,000 depending on the house spec. 

- Potential profit between $200,000 - $220,000

Thanks for taking the time to look at this post. 

Rob

[Dan Yellowsky]

Hi Rob, i have looked at a few development opportunities in HFB and santa cruz. I agree with john about the financing. You can get a hard money /private lender if you have 30% or whatever they need invested. After looking at many deals i couldnt find one that had low risk/high profit. I got most excited about a couple of lots in moss beach. $300k for bare land and $1.5m or so after a house is built. There are a lot of expenses. PG&E was $10k to hook up (plus $$ to run the wires underground), water and sewer were $50k to hook up (IF they didnt have to extend the main lines or dig up the street..if that was required add another $50k) and then the county/city likes to get their entitlements - sidewalks, widen street - whatever they are in the mood to ask for costing many tens of thousands. In the end the long time frame - 18 months to 30 months is what i figured and "maybe make $200k" just didnt work for me. I am focused on buying 1000sqft or smaller SFH for $500 to $800k in silicon valley - adding 800sqft or so and making it "better than new" and sell for $1 to $1.5m...faster and lower risk than raw land development..and there are so few new houses in the valley they get a nice premium. Where have you been doing the fix and flips?