Are you thinking of developing your raw land into a profitable property?

Whether you’re a home buyer or a novice real estate developer, raw land development can be a challenging but rewarding process.

Here are some things that you need to know before developing raw land into a profitable asset.

Have The Right Plan

Before you begin working on your development plan, know what you intend to do with the completed building structure.

Will you be selling this property to make a profit? Will you turn it into a rental for tenants, or will you use it for your own use?

Rentals, selling properties, and personal properties all come with different features. Custom features like a converted garage might work for you, but it might not appeal to a prospective homebuyer.

This is why it’s crucial to draw up a construction plan that aligns with your future goals and intentions.

Raw Land Development Takes Time

While buying raw land and developing it is definitely cheaper than a pre-made hot property, it also has a few downsides.

Raw land developers need to have a lot of patience to work through the property development and appreciation phase. Your contractor might cap the construction duration at 12 months, but inconsistencies such as bad weather, lack of funds and labor can stretch the process.

You must take out a construction loan to expedite the construction process and tackle any financial obligations that come in your way.

Know Your Zones

Before you begin drafting a real estate development plan, ensure that you know your zones.

Zoning codes determine the types of properties that can be constructed within a zone. For instance, you cannot get approved to build a residential home within a commercial real estate zone!

Knowing your jurisdiction’s zoning and building codes will ensure that you cut down on any potential fines or don’t face any permit rejections from the government authorities. Moreover, it’ll ensure that your development process rolls out smoothly and without any hurdles!

Work With Credible Professionals

Whether it comes to working with contractors, builders, or a private money lending firm, know that you’re partnering with the right people.

Research your contractors, sub-contractors, or home-builders that you need to work with. Get reviews and referrals from your friends, colleagues, and family members to ensure you have the right team for the developing job!

Similarly, ensure that you’re taking out a construction loan from a reliable and credible lender. An experienced lender will create flexible loan terms for you and ensure that your raw land develops into the property of your dreams!

Partner with Commercial Private Equity to Develop your Raw Land

We know that the lack of funds can further stretch your property development process. But with Commercial Private Equity, our clients can rest assured that their raw land development will go according to their scheduled plans!

We extend hard money loans to finance raw land purchases and construction loans to facilitate the real estate development process.

Head to our website to get more details about our construction loan program in the United States.

Hard money loans can help you bridge the gap between an ongoing real estate transaction and a long-term financing solution.

While getting approved for a hard money loan is relatively easier than applying to a bank or a credit union, certain factors can derail your chances of securing a hard money loan.

We’ve come up with some practical ways that’ll help you secure a hard money loan for your next real estate transaction.

Showcase your Success

Since hard money loans and bridge loans are high-risk investments for private lenders, they’ll always prefer to lend to a successful house flipper or developer.

To stand out from the hard money applicants’ crowd, you must show your successful history of developing real estate property or flipping houses.

Let the underwriters know how long you have been in the business, how many real estate deals you’ve closed, and successfully negotiated a high resale value for the flipped property. A peek into your successful real estate career will assure the private investors of your ability to repay the loan.

Set a High-Value Collateral

If there’s one thing that could get you a stamp of approval from the underwriter, it’s high-value collateral.

In hard money loans, credit scores are replaced with high-value collateral. Since hard money loans come with high risks for the lenders, they want to know the value of your collateral against which you’re applying for a loan.

It acts as a form of protection for lenders. In case borrowers default on their loan repayments, the lenders can move ahead, seize the collateral, and sell it to recover their losses. Therefore, we recommend that you list the current value of your collateral property and its anticipated resale value (ARV). Collaterals with high ARVs make for a profitable deal for the lenders, and can get you instantly approved for the loan.

Make a Hefty Down Payment

Think the down payment doesn’t have much say in your loan approval process? Think again!

A large down payment, more than 20%, assures the property seller that you’re seriously interested in the property; it conveys a similar message to your lenders.

A hefty down payment means that you’re paying a larger percentage of the home’s value, thereby making it low-risk for the investor.

Moreover, it assures the lender that they’ll need to finance the remaining 80% or less of the property’s value. Setting a large down payment would ensure that you get a low LTV ratio, smaller loan amount, fewer monthly payments, and reduced risks for both the investor and yourself; a complete win-win situation for everyone!

Your Repayment Strategy is Just as Important

A carefully crafted repayment strategy might just win you the seal of approval!

While most borrowers are focused on getting the approval process right, they tend to forget the most crucial part of the loan process; the repayment strategy.

Before you apply for that hard money loan:

• Consider crunching your numbers.
• Review your income, current liabilities, the loan amount you need, and the interest rates you’ll need to pay.
• Devise a straightforward plan on repaying your loans on time.

Moreover, your exit strategy is the one thing that can make you fit for a hard money loan. Tell the lenders how do you plan to repay the loan at the end of the loan period.

Will you be selling the high-value flipped property? Or will you sign up for another long-term refinancing plan?

These details will convey the right message to the lender, and they might just approve your loan application!

Seek Referrals

If you need to find the best private money lenders for your hard money needs, try to build connections with real estate industry professionals. Professionals like real estate agents, investors, property developers, and construction companies can help you connect with some of the leading private lending firms.

Moreover, their referrals will help you navigate through the different private lenders, their firms’ policies, and details about their turnaround rates.

You could always seek help from outside the real estate industry. Friends, family members, acquaintances, and colleagues can refer you to reliable private money lenders that offer low-interest rates and have feasible loan terms. These referrals and suggestions will ensure that you opt for a credible and reliable hard money lender and have access to funds within just a few days.

Get in touch with Credible Private Money Lenders.

Before you settle on that one private money lender, it’s crucial that you meet up with various private lenders out there.

Get to learn more about their hard money application process, how long they have been in the industry, and how they can help reduce risks for your hard money loan.

Moreover, you can inquire about the company’s policies, the loan terms that they offer, and if they’re willing to create customizable financing solutions. Weighing in these factors can help you decide on a private money lender and help you ensure that you’re placing your trust in the right firm.

Remember, each of these private money lenders will come with different turnaround rates, approval rates, loan terms, and credibility.

Evaluating the time frame of your hard money loan, the loan terms, and the private lender’s reputation will help you choose the right lender for your hard money loan.

Consider Commercial Private Equity for a Hard Money Loan

If you need to make a down payment or close a real estate deal real quick, we can help you out.

At Commercial Private Equity, we have over 75 years of experience and have rescued thousands of real estate investors. Our clients don’t have to go through the hassle of improving credit histories and credit reports. With our asset back hard money loan policy, we offer low interest rates and low LTV ratios to help reduce the risk for our clients and our private lending firm.

Call us at 404-301-8633 or head to our website to get more details about our hard money loans, commercial bridge loans, and construction loans all across the United States.

While you may not think much of raw land investment, it can open new income streams and become a lucrative investment for investors and home buyers alike.

Most investors are wary of investing in raw land because;

1. a) it takes time for developing a property from scratch
2. b) raw land might not seem that profitable

However, we delve deep into the benefits of purchasing raw land, developing or holding it, and making hundreds of thousands of dollars worth of profit with just a piece of land!

A highly affordable real estate investment

If you’re a new real estate investor or a first-time home buyer, the overly crowded real estate market and costly properties can overwhelm you. This is when you need to consider buying and developing raw land.

A developed property sitting on a piece of land would obviously cost you more. On the other hand, a similar parcel of land with similar dimensions can be bought for much less. If you have the finances to develop a property, you could always purchase raw land and seek a construction loan to build your own property.

Appreciates over time

The RLI-NAR survey reported over a 2% increase in residential, commercial, and recreational land sales during the Pandemic alone. This strong growth in land sales depicts investors’ interest in vacant pieces of land.

But why?

Because just as developed property appreciates over time, so does raw land!

Even if landowners buy and hold a piece of land without developing it, they’ll always walk out of a transaction with more profit in their pockets!

Factors such as infrastructure development, economic changes, developing amenities, and local development make land more habitable. As the area’s popularity begins to rise, so does the land’s value!

Low holding costs

Not only is raw land less costly than developed properties, but it also features low holding costs!

If you plan to let the land sit and appreciate over time, you’ll only be required to pay an annual tax, some maintenance, or holding costs. If you don’t wish to develop the property just yet or intend to sell it in the future, you can let the land sit and increase in value without doing any hard work!

Carve your own path

A raw parcel of land acts just like a blank canvas. You can develop your property with your own construction plan while remaining within the zoning and building codes. You could always have a larger front yard, more space in the backyard, and choose finishing materials of your choice!

With a commercial piece of land, you can always partner up with a builder and build a commercial property that reflects your or is specifically made for a particular business.

Raw land lets landowners build their dream properties at their own pace!

Consider Commercial Private Equity for Raw Land Financing Solutions

While most traditional banks find a raw land investment riskier, Commercial Private Equity thinks otherwise!

At Commercial Private Equity, we ensure that our clients get to build commercial or residential property on the land of their choice. We extend hard money loans to finance the purchase of raw land, and our construction loans can help you build the property of your dreams on your own land.

Give us a call at 404-301-8633 to learn more about our customizable loan terms to finance raw land transactions all across the United States.

Do you have any other alternative to conventional bank loans?

Absolutely!

Private money lenders are just as effective at extending loans for real estate transactions and other financial obligations.

These lenders are easy to work with and offer tons of benefits to borrowers. We look at why private money lending firms are a better option than banks and how borrowers can benefit from their quick services.

What Are Private Money Lenders?

As shady as private money lenders might sound, these organizations are perfectly legal and preferred by millions of borrowers across the nation.

A private money lending firm is an organization or a group of investors that extend short-term loans to borrowers. Most of these loans are asset-backed and are extended for just a year or sometimes more than a year.

With a private money lender, borrowers can fill out loan applications and seek out high-value loans without any strict restrictions.

Private Money Lenders Vs. Banks—Which Is Better?

Even though private organizations or investors offer private money loans, they’re less strictly regulated than banks or traditional lending institutions.

Private lending firms have to conform to usury laws and ensure they don’t charge high-interest rates from borrowers. These slight regulations place a check on private lending firms and ensure that borrowers are protected at all times.

Moreover, since private investors back these private money lending firms, borrowers don’t need to fit the requirements or guidelines as laid out by federally insured banks.

These private lending firm makes for a more convenient and accommodating financing option for most real estate agents and homebuyers. Here’s why.

Private Money Lenders Redefine Flexibility

Private money lenders can be more flexible than you might think!

These private lenders aren’t strictly regulated; they are insured by private investors and don’t require borrowers to comply with unbending guidelines. This gives them the leeway to create more flexible, more convenient loan terms for their clients.

Moreover, private money lenders aren’t federally insured, which is why they don’t set strict restrictions for their borrowers. Borrowers get a lot of elbow room to use these funds in whatever way they wish to and can’t be dictated by the lenders on spending these funds.

Credit Score Doesn’t Matter

Think you’ll need a sky-high credit score to get approved for a hard money loan? Absolutely not!

When it comes to working with private money lenders, borrowers gain the advantage of skipping past the horrors of their financial history and seeking out a loan with a clean slate. Since private money lenders are almost always focused on the details of the collateral being offered against the loan application, these firms overlook any foreclosures, bankruptcies, and blemished repayment records.

Application Approval Process Made Uncomplicated 

You know it all too well; previous financial history and bankruptcies can step in the way of loan approvals and prevent you from gaining funds quickly.

But with a private money lending firm, borrowers can rest assured that the investors will not go digging their past financial records and their repayment histories.

All that a private money lending firm is interested in is the collateral value and down payments. With a high-value collateral asset and a hefty down payment, private money lenders can quickly process loan applications and approve the release of funds within just a few days!

This makes it an ideal financing option for seasoned real estate investors or homebuyers who can’t lose out on real estate deals and need to make that property down payment quickly.

Customizable Financing Options

While banks might not be able to offer custom loans to every borrower, private lending firms indeed can!

Since all banks are federally insured, they need to comply with federal rules and regulations. This is why most borrowers need to undergo tedious paperwork and background inspection to get approved for a bank loan.

On the other hand, private money lenders skip past these technicalities and review loan applications within just a few days. Moreover, these private lending firms can work around the applicants’ requirements, evaluate collateral assets, and draw up loan terms that are feasible to the borrower and the lending firm.

Such custom financing solutions can help borrowers invest in real estate property, buy raw land, develop it, renovate properties, and even put down a downpayment for houses.

A Quicker Funds Approval Process

Since private money lenders aren’t trying to pry out a borrower’s previous financial history, their funds’ approval time is significantly reduced.

The lending firms can quickly review these loan applications, have a look at the borrowers’ needs and their financial obligations, and meet with them to create feasible loan terms that are convenient to both borrowers and lenders.

The Bottom Line

Hard money loans extended by private money lenders can come with high risks and interest rates. However, these private money lenders offer quick, easy, and short-term financing options to real estate investors and homebuyers. On the other hand, banks and credit unions need to review the borrower’s credit history and scrutinize their repayment history with a magnifying glass.

Such thorough financial inspection can cause clients to lose out on lucrative real estate deals. However, a private lending firm can step in, rescue borrowers, and ensure that they make that downpayment in due time.

Whether you’re a real estate investor or an interested home buyer, you can work with a private money lending firm to get the property of your dreams.

At Commercial Private Equity, clients can fill out our application forms, get in touch with our representatives and work out financing terms that align with their needs and conditions.

As a reliable private money lending firm in Atlanta, GA, Commercial Private Equity has made a name in the real estate industry. From offering commercial hard money loans to accommodating clients with our bridge loans, we’re a leading and trusted private money lender on the market!

Get in touch with us to learn more about our commercial hard money loans, bridge loans, and construction transactions.

If you want to earn massive profits in the shortest time possible, property development is one of the highly lucrative businesses in the world.

Whether you’re working as a property developer in the United States or performing raw land development in the Middle East, property development can help developers make an impressive amount of profit.

If you’re looking to venture into this lucrative business, we have got some solid advice for you.

This blog uncovers the concept behind property development, what it is, how to do it right, and turn raw land into a profit-making machine!

What Is Property Development?

Simply put, property development is the art of taking raw land or buildings, developing them, and turning them into a high-value property.

Developers are tasked with the responsibility of adding value to a piece of land. Here’s how they do it.

Property developers invest in a piece of land or a building, either refurbish or develop it to make it more lucrative or withhold it to appreciate its value over the coming years.

Property Profit—How To Develop Properties For Profit?

Before they jump into the development business, property developers need money to make more money.

These developers need to put down down payments for raw lands or buildings, increase their value through subdivisions and renovations, and then introduce completed projects to interested buyers. Even though property developers make an increased return of investments by withholding property or raw land by letting it appreciate over time. However, there are several ways to improve a property’s value and return on its investment.

Subdivisions Of Raw Land

Raw land might not seem like a profitable investment; however, it’s the first step to a successful property development career.

Real estate investors can invest in a piece of land and create subdivided blocks out of it.

How does a simple process of sub-division make hundreds of thousands of dollars worth of profit? Well, here’s how.

For instance, a real estate investor invests in a large block of land that measures 1000 square meters for $400,000. Since most buyers aren’t interested in purchasing 1000 sq. m of land, the developer can subdivide the land into five, 200 sq. meters of land. They can then proceed to evaluate this land at $200,000 for each 200 sq. meters block.

With sub-division, all that a property developer needs to do is subdivide the land into smaller blocks of land and sell them off to buyers at a much higher value. This way, the property developer withheld the parcel of land, subdivided it, and sold it off for $600,000!

Renovating And Flipping Real Estate Properties

Renovation or refurbishment is another value-adding strategy that never backfires!

Even if you aren’t a renowned property developer, you can always get into this bankable business by renovating your own property!

Property developers can purchase unfurnished dwellings or buildings, equip them with the latest amenities, furnishings, and feature contemporary interiors to make the residence look more up to date and valuable.

Updating kitchens, bathrooms, installing new cabinets, adding further details, and marketing these buildings to the interested buyers will ensure that property developers receive a sizeable profit.

These property developers or real estate flippers can set a high selling price on these buildings and include the cost of the building, furnishings, and their own profit.

Real estate developers can partner up with investors or opt for hard money loans from credible private lenders to initiate renovation projects. These hard money loans do come with high interest rates; however, they can be repaid within a short time frame and make a perfect financing option for real estate investors.

Constructing Residential And Commercial Properties

This value-adding strategy takes property development to the next level!

Developers can begin by buying a piece of land, partnering up with investors, offering them equity in the finished real estate project, and hiring a builder to oversee the construction phase. This strategy entails that developers design and develop residential or commercial buildings atop a development site.

Real estate developers can construct apartments and dwellings according to the local zoning codes, market demands, planning regulations for the area, and the developer’s budget.

Developers can take out bridge loans to secure the real estate deal, take out hard money loans to complete the development project, and sell it off to earn massive profits and repay their short-term loans.

These hard money loans are ideal for real estate investors and property developers who need immediate cash flow to guarantee that their property development process doesn’t come to a complete stop!

Commercial And Residential Rentals

Another way property developers can create a lasting income stream is through developing property for rentals.

Once they have utilized their value-adding strategies, real estate developers can choose to keep the property and not sell it. This way, they can subdivide their renovated or newly constructed property into various dwellings, rent them out to tenants and enjoy a steady source of monthly income without any expense! They can also make these dwelling into vacation rentals, residential rentals, or even commercial offices. These tenants will pay a fixed amount of rent every month, which ultimately goes up with the rising inflation and continues to benefit the real estate investors!

Moreover, they can quickly liquidate their property and sell it off to interested buyers if they need a significant return on their investment.

Are you on the lookout for a commercial hard money lender in Atlanta, GA? Commercial Private Equity has all the right real estate financing solutions for you!

From offering commercial hard money loans to lending bridge loans to homeowners, real estate investors, and even large corporations, Commercial Private Equity has been serving the real estate industry for the last 75 years. Our company works with borrowers on drawing up suitable terms for their hard money and bridge loans. Moreover, we offer a no-cost application process to our clients and have one of the lowest interest rates in the country.

You can get in touch with our team to learn more about our commercial hard money loans and secure one at the earliest.