Where can I get a 100% loan on a 227 acre section appraised for $700 per acre and, due to finiancial hardship, is asking $60k TOTAL?

Asked by Don, Tucson, AZ Sun Jan 17, 2010

This is raw land with only a road to the property but is within 25 miles of Wilcox AZ.

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Libby Meyer, Agent, Salt Lake City, UT
Sun Jan 17, 2010
In addition to the answers from the other posters, I, too, think that this would be an unwise decision if you have no cash to put down.
It sounds like this piece of land has no utilities. You will need hefty deposits and cash payments to utility providers and contractors to have a livable piece of land.
Securing financing would have to be through private sources, which is difficult to find a very expensive.
You should consider waiting until you have sufficient funds to pursue a piece of property like this before diving in.
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1 vote
Kent & Emmary…, Agent, Tucson, AZ
Sun Jan 17, 2010
Don - if you're looking to live on the land, the USDA Rural Home Loan program might be an option, but there are going to be some restrictions, such as the timeframe in which you have to be completed with building, whether you will have to drill a well - assuming there is no water already servicing the property, who is responsible for maintenance of the road TO the property, etc.

While this loan program can provide the 100% financing you're looking for, it would be best to contact a lender that specializes in this type of loan - Paul Dunn is perhaps one of the most knowledgeable about the USDA Rural Development Loans in the state of Arizona - click on the link below to get his contact info and learn more about the program:
1 vote
Melanie Chim…, Other Pro, Tucson, AZ
Wed May 4, 2011
Don, your strategy for financing would vary, depending on your plans for the land. If you are approaching this as an investment, you may want to sign an option to purchase on the land and then find an investor to partner with you in the future planning. I expect conventional financing may be a challenge.
Best of luck.
0 votes
, ,
Mon Jan 18, 2010
Don -
You're really not looking for a conventional lender or loan - like the USDA program - that are designed for homes that will be primary residences and not including large acreage. What you'll need for this particular situation is a hard money lender who will be lending based upon the property and equity position that they will be in. However, as mentioned in a previous post, these loans are expensive and typically short-term. They will want to know your exit plan and many will have a balloon within the first 12 - 36 months. However, on the plus side, if the property is truly worth $150,000+ and your price is $60,000 there is a decent chance we could find someone to do this loan for you. Additionally, the cost for these loans is relative. It may seem expensive compared to a loan for a regular primary residence. But you should just look at the cost as part of the acquisition cost of the property when developing your investment/development goals. Let me know if I can be of assistance.

Brian S. Cardenas
President / Mortgage Consultant
Antigua Capital Funding
Email: brianc@antiguacapital.com
0 votes
Joseph H. W…, , 85710
Sun Jan 17, 2010
Don, they are called "Hard Money Lenders" and they all have different lending criteria, short term, high interest but if you have a great exit plan that's short term and fool proof this is a way to go.

Good luck.

Joe Warren, REALTOR ® CCLS
Certified Commercial Leasing Specialist
Tierra Antigua Realty
Commercial Division
7423 E. Tanque Verde Rd.
Tucson, AZ. 85715
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0 votes
Marla McWill…, Agent, Coeur d Alene, ID
Sun Jan 17, 2010
Most lenders are shying away from lending on land at all! Three years ago, a person could buy land with 25% down, I know....I did!

Today, most lenders I've talked to say, "We don't have an appetite for lending on land at this time."

However, 227 acres for $60K sounds like a screamin' deal. You should look for some private money to loan on that. Sounds like an awesome deal!
0 votes
Jeffrey Masi…, Agent, Scottsdale, AZ
Sun Jan 17, 2010
Dear Don:

This would be a difficult loan. Is it for land, without a home? The USDA Loan program for rural areas does have 0% down. Hoevever you would have to check on their website for lenders and qualifications. You might find something else that would qualify. See the USDA link at: http://www.arizonahomesland.com/forbuyersorrenters.php

Let me know if you would like more information on all loan programs avaialbe. One of our top Tucson agents is an expert in this area.

Regards, Jeff

Jeff Masich, Realtor®
Arizona Homes and Land
HomeSmart Real Estate
Web Reference:  http://ArizonaHomesLand.com
0 votes
Dan Chase, Home Buyer, Texas City, TX
Sun Jan 17, 2010
I just wish I could find something similar to that land in the places I would like to buy in. I would be buying today.
0 votes
, ,
Sun Jan 17, 2010
Is this a serious question? You can't possibly think this is going to happen. First of all, even when land loans were common, the loan-to-value they allowed was never what you could get on residential properties. Even if there was a house on it, 227 acres far exceeds what someone would loan on.
0 votes
Don Tepper, Agent, Burke, VA
Sun Jan 17, 2010
I don't think you can. Loans on raw land are very difficult to get. Besides, what would YOU do with it? Raw land drains money--there are taxes, sometimes special assessments, sometimes upkeep costs. And it brings in no money. So, let's say you do manage to get a 100% loan at, let's say, 10% interest. You'd be paying about $6,000 a year--maybe more, depending on taxes--which works out to $500 a month. Can you afford to pay $500 a month indefinitely? Probably not, if you need a 100% loan.

One option: If the land owner owns the land free and clear, ask for owner financing. That won't work if he needs cash right away. But if he can wait, you'd pay him, just like you'd pay a bank. And with owner financing, you can structure the note any way the two of you agree. For instance, you might structure it as interest only for the first year or two. Or structure it as a balloon note. Both would keep your initial payments low.

Still, the question is: What is your exit strategy? What do you plan on doing with the land? Unless it's something that'll generate enough revenue to either keep holding it or that'll result in a larger profit in the near term, it doesn't make financial sense to buy.
0 votes
Kathy Weber, Agent, Murrieta, CA
Sun Jan 17, 2010

Be careful of any 100% loans! Many carry high interest rates, etc. Have to read the fine print on these.

These type of loans caused havic during the prime real estate market. It is also extremely difficult to find loans as such.

If it's raw land, you may want to pursue just a "land contract" & loan. Again, usually higher interest rates. You also have to be careful that they don't have any type of timeframe for building a single family residence. (construction loan).

I would suggest going to the County Building Permit department and inquire on any requirements that may be imposed on this land.

I would also contact a local Realtor to have a Title Report pulled to see if there are any lien's attached.

Usually if it sounds to good to be true - well, you know the rest!

Good luck!
0 votes
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