Land Financing 15 Year Only?

[Lindsey Iskierka]

Foe investors who like to purchase land, is every lender requiring it to be financed on a 15 year mortgage instead of a 30 year?

We’re looking at 5 acres in Flathead County, Montana and are having trouble getting financing for anything but a 15 year.

We’re discussing seller financing as well with the seller but at this point, we’re not agreeing on terms.

Thank you in advance!

[Aaron Caddel]

Wise advise I've benefitted greatly from: adding cash will bring out a taker for any deal. I understand that you're not coming to terms with the seller on owner financing, but cash in hand might change that conversation. Introducing a fair negotiation on terms with (1) end price, (2) length of term and (3) cash up front could likely produce the results you BOTH are looking for. In the case that you do not have that necessary cash yourself (for a down payment), you could still offer a second position to an investor for that down payment and then restructure for a longer term with less interest later. The owner financed position is a potentially zero interest loan that should be considered.

Another quick note: consider leasing his land with an option agreement as well. You can have 3/4 of the lease payments credited to principal if you wanted, and then lock in a juicy purchase price that gets him/her salivating. 

In either scenario, you'd get low payment/zero interest payments that could be restructured whenever you like.

All just food for thought.