Advise on purchasing land

[Benjamin Shaw]

Hello. I have recently discovered the BP forums and noticed all of the great advice given by professionals to help people just starting out so I thought I would give it a shot and post a scenario to see if anyone could help.

My brother is thinking of purchasing land in Danbury CT. Two acres, house plans (included) for a three bedroom, two bath, two story home, in a great neighborhood. The property is fully zoned, and has the foundation already poured. It needs the septic replaced and the pump and piping replaced for the well. It is selling for $95,000 and appraised at $120,000.

He has an excellent job, excellent credit, with $20,000 for a down payment. He does however, have a current mortgage that he is neither upside down on or has positive equity in. He really doesn’t have any near future plans for the property, only to possibly build a house to either live in or rent. He is financially stable enough to carry another loan for $1500.00 a month. Also, the land used to be in our family so he has a personal attachment to it as well, hence the reason I am seeking information to see if this would be a good deal for him without clouded judgment.

The seller has a pending offer, but is willing to wait to see if we can get financing for a counter offer. He will also give us the house plans to go around to banks and credit unions, and we will work up a portfolio on the property to show them as well.

If he chooses to proceed how would he go about getting a loan for land? I read land loans are very hard to get.

Would a personal loan be a good idea? If so any suggestions as to which company would be best?

He is also looking to purchase a heavily discounted rental property from his grandfather in the near future. It is located right next door to the land he is looking to buy.

By purchasing the land, could that somehow cause him to not get approved for the mortgage on the rental property? I’m just thinking ahead. I know this is a lot of information and there’s so much more to it but any advice at all would be much appreciated.