The realtors always hike this since they and buyers think with a higher purchase price the Auditor will hike the assessed value and thus the taxes. 

And purchasing in a high end college town eliminates any "deals".

There are programs available that will allow up to 85% loan to value on an investment purchase. 

I am looking to purchase a parcel of land in Michigan and plan on using cash for the purchase.

Our agreement has typically been structured as an interest only loan, where he puts down 25%+ when purchased and I provide the loan for the balance plus draw payments for construction.

I used to think that most investors purchasing mortgage notes were clueless as to the mechanics of how it worked.  

In the industry this is most commonly known as a "Fix and Flip" Loan.We are correspondents with dozens of lenders who offer this type of loan.Most commonly, the loan will cap out at 75% of the ARV (But Investors do need cash, this is not a 100% financed transaction)75% has to include the purchase price and the rahab amount requested.The terms can vary greatly.The two most important areas that will impact the terms the most is 1.

The custom builders in the area are very competitive and are offering pretty inexpensive builds vs comps.If the lot was purchased recently for 20K and the turn-key cost to build is $200K, after I close on the house (bank said appraised value would be 220K), would a new buyer have problems with it getting appraised over $220K even with other comps selling for 300K+?

My plan is to only purchase 1-2 properties per year, though, which is probably the main reason why this approach works for me.If you don't trust your realtor, I'd say maybe you should maybe find one that is a better fit?

Also I only hope to purchase 1 new property a year so I assume those situations wont pop up too often.Thanks for the quick reply!