Subordination And New Construction
I have a source of financing for the construction of new housing. But "$0" for the land. My source will NOT loan on leased land. How can I structure a deal to get my project off the ground?
What has worked for those of you who are experienced builders of Multi-family and SFR homes?
My only experience with leased land was back in Houston in the late 70's. There was an apartment complex for sale that was built on leased land. All by buddies said it would never sale because the land was not owned. It was priced low and the cash flow seemed really high but no land. It is like having a boat with no water in most buyers opinion. I see your lenders point of view after remembering that property. I think the land owners finally gave the building owners a option to buy the land in the near future and a deal was made.
Good LUCK and HAPPY HOLIDAYS
Hope this helps some
Ted Jr
I think that somehow you have to find an investor willing to buy the land and that will be his contribution to the deal, you make a deal to buy it from him at a price that gives him enough profit.
Or you get hard money to buy it?
Just a thought.
I took out a mortgage on myhouse to buy two lots to build on. It is nice to say "yes, they are free and clear!"
Soon the house will be again too.
Shelly in GA