Why do land developers prefer to use owner financing to sell land?
Owner financing is often the best way to market and sell land to the end consumer. When an individual wants to purchase a lot, tract of land, mountain acreage, lake property, etc., he often finds that obtaining bank financing for the property is a problem. Since there is no house or building on the property, banks and other traditional financial institutions view the land as a risky loan, and will often lend the borrower only 50% of the purchase price. This means the borrower must come up with the other 50% in cash for a down payment. This unpleasant situation will often kill a potential land sale, forcing the developer to start all over with another prospect, who may also run into the same kind of financing problem. The good news is that owner financing can often spare the land developer, and the end consumer, the difficulty of dealing with banks and other traditional financing sources. If a land developer uses the land financing programs offered by Sovereign Capital’s funding sources
Related Questions
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