Land Development Financing For Newbie
I am looking to get into land development. I have taken quite a few courses and kinda picked the brains of a few developers for even more knowledge. But as a newbie, how can I structure a deal to obtain financing. I have 2 relativly small deals that I want to start with(either deal or both). The only finances I have myself are about $40k cash. But I have friends/investors that would be willing to chip in a bit, for some of the profits. What percent of the cash on hand would I need for a deal? What can I do to show a lender that I am serious and ready to start? I was preparing to hire an analyst to write my executive summaries and market feasability studies. Both of these deals are selling the land below the appraised value as one of the deals is a foreclosure. Bothe deals has the proper zoning already in place btw. To give you an idea, one deal is $250k for the land and is approved for 16 homes. This deal is the foreclosure. It already has preliminary site plans that were rejected beause it needed a retention pond added and more of the trees needed to be kept thats all. The other is $400k for the land and is zoned multifamily for 165 units. Is there a way I can obtain financing? Any help is appreciated. I would like to submit my package the right way the first time and I am trying to make a move immedialty. I hope to put a contract on the properties this week. I would be willing to just buy one of the properties and just hold the land until I am ready to go forward, but I want to start the development of one of these.
- Should I hire an outside Land developer/Consultant to piggyback so I an close the deal?
- How much money should expect to pay down in percentages?
- What percent should I return to investors/friends that contribute to the down payment and how do I structure that?
- Who can you recommend for financing deals for newbies like myself?
- Is there a specific way my company needs to be setup to make my compnay seem stronger?
- Where is a good place to start for getting the construction costs estimated?
[ Edited by ddlingo on Date 06/24/2007 ]
Where is the property???? We can lend on land deals to a certain LTV depending on its location.