You finally found the ideal site that’s ready for development. Your carefully-constructed plans of redeveloping that non-performing property can finally rise up from your blueprints and take form. Your next step is securing a land loan for your development—but you’re quick to realize that finding a traditional lender that’s receptive to your opportunity can be an incredibly challenging feat. Simply put, banks want to avoid the uncertainty.
What’s the Risk?
Much of the traditional lender’s hesitancy in moving forward is the high risk associated with land investments, due to the fact that developers can’t show future value. It doesn’t matter if it’s a mixed-use, storage or residential property, banks want to know the same things—is it income producing and what’s the current value? It’s the best way to mitigate their risks. So where do you, as a borrower, turn to secure the funding you need? Again, without any current income from the property, traditional lenders can’t be sure the investment will prove successful—making them more reluctant to pump money into an investment that might not pay off.
Partner with a lender who gets it.
When going the traditional lender route, proving that your plan will avoid all possible obstacles and be prosperous is all on you. However, nationwide private lenders like Silver Arch Capital Partners can take some of that weight off your shoulders. With decades of experience and more than $2 billion in closed loans by its partners, they have seen and helped fund it all. They look at the land value from all angles when making their decision to proceed. Is the property located near major roads and transportation hubs? Is it in close proximity to highly populated areas? Answers to these types of questions can help lenders like Silver Arch see the bigger picture when it comes to future earnings.
Do the Research.
Finding the right hard money lender can make or break the outcome of your investment. So make sure you do your research in ensuring that your prospective lender has a history of successful loan closures. Silver Arch Capital Partners, for example, has an extensive catalog of closing loans. One of their recent projects is for a $19.3 million loan closed in Colorado Springs, with plans of developing a 310-acre stretch of land into a master-planned community. They also helped bring back the iconic Jockey club in Miami with a $21 million loan. A two-phase project that began with a proposed state-of-the-art 41-story tower to house 120 well-appointed residential condominium units and a 90-room hotel. In both cases, Silver Arch Capital Partners thoroughly researched the property and the surrounding area to ensure these would be worthwhile loans.
At the end of the day, you’re not just choosing a private lender, but experts in the field who not only can find the true value in your deal, but can help you through all the possible hurdles to get you to closing time—making your vision a reality.
