Paying cash for land. Loan type to get my cash right back?

[Rashelle Turner]

Hi all!

In today’s market I need to use cash to buy this large tract of rural land and beat out the other offers. I will then start construction. I need to be able to pull the cash from the land purchase back out as soon as possible (prefer not to wait 6 months after the finished project to refi). Seems it’s too risky for most lenders to do cash out on a land loan. Anyone have any ideas or know of financing options that would allow for me to get my cash back out. I’m fine with carrying a loan on the land and new construction.

Thanks for your insight!

-Rashelle

[Torrell Palmason]

Simple, refinance the land only right before you close on your construction loan. The construction loan will pay off the land loan as its first disbursement of the construction loan. You will get 70%-75% of your land costs back with the refinance of the land. The rest will remain in the loan and act as your down payment on the construction loan. Credit unions are your best bet to purchase or refinance land.

Best of Luck!