Land Development Loans
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Getting land development loans is rather simpler and easier than what most people think. As a matter of fact, it’s not too different from how you get regular commercial real estate loans and mortgages. Before we dive straight into that topic, do you exactly know what land development is?
Understanding Land Development
In the simplest and most basic terms, land development is the procedure of altering, modifying or improving a certain landscape. This can involve anything from the usual changing of landforms like the removal of trees and unwanted plantation, the transformation of a natural to a semi-natural area for the purpose of housing, agriculture, or commercial, and so on.
Akin to many different types of development procedures, land development holds too few requirements and rules before the physical development actually begins.
Overall, the goal of land development is to be able to present finished pieces or pieces of real estate properties. However, there are more to that because it also looks at the further construction or the development of land.
Land Development Loans: What Do They Mean?
Now that you are aware of what land development is, do you now know what a land development loan is? Basically, it is the type of loan that contractors, developers, and other real estate businesses can take in order for them to get the necessary funds to develop the raw land that they own.
However, most people think that this particular type of loan is just limited to that. When, in reality, it actually holds a ton of different uses. Some of the other things you can do with a land development loan include, but are not limited to:
- Property/ies Under Development (PUD) Financing
- Purchasing of Raw Land
- Partial Development of Already-Worked on Land
- Development For Future Sale or Construction
Different Types of Land Development Loans
There are several types, kinds, and classifications of land development loans and each of them have their own use in the industry. So, in order for you to know more about these, there are the two (2) general types of land development loans or funding:
This option is what gives the lender extra protection via the provision of collateral or security of the asset. Moreover, the interest rates of these loans would be lower because the asset or the property in question is in place. On the other hand, the development loan is a pretty significant type of loan wherein the borrower would have to repay the lender with the principal + interest in installments. Depending on the agreement that the borrower and the lender would come up with, there could be no collateral or security laid out on the table.
Secured Purchase Loan
Development Loan
Getting a Land Development Loan
Are you not sure where you can get the land development loan you want to get? Moreover, do you know the usual process of how a lender would typically provide a land development loan?
Here’s a quick sneak peek of what lenders would usually ask for as well as the places or the institutions that can actually give and grant you the land development loan you’re looking for. The usual procedure of taking a loan out would involve the lender:
Of course, the lender would run a quick check on the borrower to see if the borrower is capable of paying back – and also, to see what kind of business they are up to. After doing so, they would run a quick assessment of the builder or the contractor tasked to pursue the process of building or development. The lender would also ask for a builder for the details of the project and how the division of funds for the project would be. Lastly, the lender would then review and assess the overall project and put it against the funds that the borrower is asking for. It might look like a short process, but overall, it can take anywhere between a month or two.
Reviewing the Borrower
Assessing the Builder or Contractor
Reviewing the Project Overall
Where to Get Land Development Loans
You can find many different institutions and sources for these land development loans. However, the most common would be:
Banks
Like many institutions, you can count on banks to give you the land development loan you need! They can offer low-interest rates with long repayment terms for the commercial real estate loan you plan on taking out.
Small Business Administration (SBA)
Akin to banks, you can also rely on the capability of the SBA to help you with funding or financing. One drawback of working with the SBA, though, would be the time that you can waste in waiting for approval.
Commercial Real Estate Loan Groups/Lenders
Probably the best, the most practical, and the most economical choice of all – would be with a private lender or a commercial real estate lender or loan group like us here at Florida Commercial Real Estate Loan Group.
For years, we have been looked at by the entire state of Florida as the best, the most reliable, and the most sought-after commercial real estate lender. Due to the wide range of loan types and offers we have, many businesses, contractors, and developers look for us and our services.
Contact Us Today!
Do you need help in securing land development loans for your business or your project? Are you in need of short or long-term funding?
Contact us here at Florida Commercial Real Estate Loan Group today via our email or our hotline and we will be more than happy to help you with what you need!
With us, you don’t have to wait for months for us to complete all the investigations and reviews – we can do it in a few weeks tops! In fact, we can get you pre-qualified and pre-approved within 48 hours of you contacting us!
Don’t waste time and work only with the best, the most trusted, and the most sought-after commercial real estate loan group in the whole of Florida!
We can even send you a free estimate or calculation of the land development loan you plan on taking out!
We service all counties and cities throughout South Florida. However, if you need any of these services in other cities throughout the state of Florida, please contact us. See what services we offer below:
