Raw Land Loan

Raw Land loans are unimproved real property that have no added improvements like sewers, utilities, streets, curbs, gutters, or structures regardless if it is 1 acre or 2000. Raw land is typically valued lower than approved parcels with no or partial entitlements. Of course, location, location, location coupled with low Loan to Value (LTV), and believeable exit strategy are huge driving forces for underwriting in 2016.

Rate and term depend on exact location of the property, strength and experience level of the sponsor(s), current zoning, and of course, the all important exit strategy. - No Rural properties at this time. - DML does not lend on existing houses...

We prefer to deal with experienced investors/developers that can show that they have or will have real money/equity in the deal. Our builders/developer's capital program is suited for those who have at least 20% of the total project cost already paid in the form of cash or existing partnerships with the current land owner.


People or corporations looking to improve either eventually for themselves as an owner occupied business or future investment property. Prefer to be working with individuals with a successful and proven track records and experience.

Metro areas with at least 25,000 or greater population is preferred but, will consider smaller sub markets. - Rural properties generally will not work today. - The market should display a heart beat and hopefully positive poputlation growth.

If your project or development is further along and requires new equity and contains fulll entitlements, you should consider visiting another variety of our land loan products such as Residential Land Loan or Commercial Land Loan.

Call us today - 800-838-1889 - Virtually all Commercial Property Types Considered!

Raw Land Loans General Guidelines

Eligible Properties Purchase - Refinance - Cash out - Bank owned, REO properties, Ballooning notes, Trust deed, mortgages
Minimum Loan Size $500,000 - $5,000,000
Pricing 12.99% - 14.99% Interest only - 6% - 8% Origination points (paid at closing)
Loan Terms 12 - 36 months from initial investment
Prepayment Penalty None
Personal Guarantees NO - Non-recourse format
Loan-to-Value 50% AS-IS maximum LTV- As completed LTV is not typically considered
New Equity (cash) Requirements Typically no new cash for Refinance or cash out - Purchase minimum - 40% of total purchase price
Third Party Reports Appraisal - Collateral value opinion
Reliable Phase I environmental report (older report can be used if property does not display obvious signs)
DML Property inspection (required)
ALTA land survey
Preliminary Submission Package For Residential Land Loans: 1.Well written summary of the property description, current entitlement status and goals
2. Representative color aerial photographs - (6 - 7 preferred)
3. Sources & uses
4. Sponsor(s) resume

Submisions - Questions

» Executive summary - detailed but, brief - (no one wants to read 50 pages)
» Aerial photos or an existing appriasal - (detailing the exact location)
» Exit strategy - (how are you going to pay us back)

Raw Land Loans

Raw land loansAre you in the construction or development business and looking for a raw land loan to purchase or refinance undeveloped land that you intend to build on or sell in the near future? Since most banks and financial institutions are not considering land development deals in 2012 a hard money land loan may be the only answer.

Here is a guide to what we are looking for in today's economy.

Strong location - The old adage Location - Location - Location has never rang truer than in today's challenging real estate market. Hard Money land loans are not typically approved in rural areas. The property must be within the path of growth. Usually, the city or town must have at least 25,000 people. There are no set guidelines however, as a general rule, the more desirable the property location is, better chances of getting an approval.

Low Loan to Value - Because of the historical high prices of real estate and the over leverage of funding that has occurred in the past 3 - 4 years and beyond, most raw land projects have reduced equity positions as compared to a few years ago. Therefore, most hard money raw land lenders will only lend based upon a 30% - 50% loan to as is value. Keyword to learn is today's value, not 6 months from now, or once all approvals are in place. Future values generally make no difference in a hard money raw land loans.

Obtain Correct Zoning - There are several examples of zoning across the Nation. Some classifications may include Agricultural, Residential, Commercial, Industrial, and these different zoning classifications may have several sub categories which further define the permitted uses of the land. There may be different processes within each city or county that governs the zoning ordinances that are necessary to gain approvals for your project. Most hard money lenders will not consider raw land or incorrectly zoned land unless the project has significant equity to withstand the time in order to successfully change the existing zoning.

Experience - It's fair to say that if you have not had any investment or development experience in the past, your chances of getting a hard money land loan funded is slim to none. Only unless you have stumbled into the deal of the century and have an excellent team of professionals behind you, this loan is only for the experienced investor or developer.

Solid Exit Strategy - Most important of all is a solid exit strategy. Since many construction lenders have taken a seat on the sideline with a large bottle of oxygen. The exit strategy is sometime difficult to prove but, nevertheless still an important aspect of a land loan. Be sure to be as detailed as possible without being overbearing when discussing your project.

One more thing to consider, there is typically a minimum loan amounts associated with land loans. Most hard money lenders will not consider loans under $500,000 for land so, in the interest of saving you and the lender time, be sure to ask if there is a minimum before spending several minutes discussing your proposal.

Don't take our word for it...

"Direct Money Lenders worked with my existing bank that had been stalling my residential sub-division for 2 years. We negotiated a reduced payoff and saved the project Thank you!

Solution Partners LLC, Charlotte, North Carolina

"I was impressed with the quick close times and clear expectations during the process."

Equity Street LLP, Central, Florida

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