Land development refinance can be a very common occurrence due to the amount of time that can be required to move a land development project along through the regulatory process.

Typically a target property is acquired for cash and/or credit and as work is completed to cover off the regulatory requirements necessary to develop the land into a different use, further financing may be required.

As a land development project meets different regulatory milestones and approvals, the property tends to go up in value, which forms the basis for incremental lending to be made.

This can come in the form of an additional property mortgage registered against the property or a land development refinance of the existing mortgage or mortgages already in place.

Each lender that will consider a land development refinance loan will have their own criteria with respect to the breakdown of the equity in the project in terms of the origin of the equity.

Land equity can either come from cash invested in the acquisition and development of the property and/or property appreciation.

For some lenders, its going to be important that a certain percentage of the equity was created from cash investment, especially for lower risk lenders, as equity lending on purely appreciated value determined by an appraiser is viewed to be less certain than something at least partially based on a transaction where cash changes hands.

But in most land development refinancing scenarios where incremental capital is required, there is an element of property appreciation from a combination of work completed and overall market value appreciation for the type of real estate in question.

One of the keys to land development refinancing is the stage the project is at when a new loan is being sought.

The further the project is towards an approved plan or at least an approved draft plan, the more interest there is likely going to be from available lenders.

Another major consideration is the existing market value of similar land in the area an the expected timeline for resale of similar property. This is an important lender consideration with respect to the value of the security as they want to gain insight as to hard it may be to get their funds out of a property in the event of default.

A third consideration is the land developer’s exit strategy to repay the new loan and the probability of the exit plan to come into fruition within the timelines outlined.

In order to locate and secure land development refinance loans for a given project, the best approach would be to work with an experienced construction mortgage broker in target area.

If you require land development refinancing in Toronto or Southwestern Ontario, I suggest that you give me a call so we can go through your requirements together and discuss land development refinance options available to you.

Click Here To Speak Directly To Construction Mortgage Broker Joe Walsh

The post Land Development Refinance first appeared on Ontario Construction Loans And Mortgage Financing.

Land development project financing or development construction financing is still a very elusive animal for many development projects in Ontario and across Canada.

Prior to the recession, development projects were everywhere as the industry had developed considerable demand over the last decade.

But when the recession hit, a considerable chunk of the money going into these development projects dried up and still hasn’t returned to the market.

The result has been a combination of out right development failures due to lack of capital and developers desperately searching for capital to keep their project alive and equity in the project in tact.

For the sources of money that do exist for development project financing, they basically have their pick of projects to go into and full bargaining control of what they want in return.

To say its a lenders market would be a gross understatement.

At the same time, regardless of the economic climate, good projects will always be able to find money. And when I speak of good projects I’m talking about a development project that 1) has a good location; 2) has demand in place for the finished project; 3) is well organized and managed; 4) has control of all the essential elements required to proceed; and 4) possesses all the required zoning, licensing, and regulatory requirements to proceed.

For projects that are missing one or more of these elements, money is going to be harder to find due to the existing unknowns. And the money you are likely to find will price the uncertainty into their cost of funds or most likely will not consider the project at all.

Now with interest rates threatening to go up, the economics for some projects may be falling out of reach.

With all this being said, there still is money available for development projects. Its just harder to find and harder to secure than in years past.

In order to increase your chances of success, one of the keys is to select a construction financing expert to work with that has direct access to active development project lenders and who has a track record of getting funding in place.

If you are in the process of planning out a land development project, or are in the middle of one and require development project financing, I suggest that you give me a call so we can go through your requirements together and discuss different construction development financing options that may be available to you.

Click Here To Speak With Construction Mortgage Broker Joe Walsh

The post Development Project Financing first appeared on Ontario Construction Loans And Mortgage Financing.

“Vaughan Land Development Loan Financing Is Available For Partial and Full Site Development Projects”

Vaughan Land development loans are many times the second financing requirement for a construction project after the land acquisition financing. Land development financing is typically secured by either a first or second mortgage against the property being developed, depending on whether or not any previous mortgages are registered against the property. The use of funds for land development can range from land surface improvements to installation of road ways and service infrastructure.

When a mortgage lender looks at financing land development work, they will consider the value of the property before and after the completion of work when determining the amount of financing that can be provided. Like building construction, a land development mortgage or loan may require more than one construction draw where the work requirements will be specifically outlined and be required to be completed before funds will be advanced.

Property development work can be performed by land developers that are looking to get land within their development serviced to a point where they can resell the lots to property owners or builders that will further construct buildings on the lots acquired. This type of financing can also be provided on a smaller scale to a builder or property owner that is doing property improvements to a smaller number of lots.

While both institutional and private mortgage financing can be available for a given project, the majority of Vaughan land development mortgage financing is provided by private mortgage lending sources. Typically these are individuals, syndicates, or mortgage investment corporations that have a specialty in this type of financing and are prepared to take over the development in the event of mortgage default. For institutional lenders to consider these types of construction loan financing opportunities, a high percentage of the lots that will be sold at the end of the development work need to be presold with contracts signed and deposits provided by the prospective buyers.

If you require A Vaughan land development loan, or are in the planning stages of your project, I suggest that you give me a call so we can go over your requirements together and review different land development financing options that will meet your needs. As a construction mortgage broker, I have access to both bank and private mortgage sources that provide land development loans.

Click Here To Speak Directly To Construction Mortgage Broker Joe Walsh

The post Vaughan Land Development Loan first appeared on Ontario Construction Loans And Mortgage Financing.

“We Provide Land Development Loans And Bare Land Loans For Acquisition, Bridge Financing, and Future Property Development”

A Toronto land development loan for improving an existing piece of real estate in either a bare land or partially developed state can be secured from a number of different institutional and private mortgage lending sources.

Because of the strength of the overall Toronto market, there is almost always a lender interested in virtually any type of property. Obviously the more challenging the property, the harder its going to be not only find real estate property lenders but also to secure superior rates and terms of repayment.

In most situations, a Toronto land development loan is a short term requirement as the land is being improved for a near term purpose that will result in either a transition into a building construction project, or the resale of the property to other developers or builders that will further add to the real estate. As a result, the majority of these types of construction financing obligations come from private mortgage lenders that have a focus in land development financing. There may also very well be an institutional land development financing option available for a given property, but the conditions of financing will have to meet the requirements of the borrower. For instance, for a single family home, no land development or construction financing can be secured through a bank or institutional lender unless the lender will also receive the long term property mortgage that will remain at the end of property improvement and construction. With a private mortgage, the requirements for land development financing are not as rigid and as a result, many of the smaller scale residential and commercial land development projects are funded via private mortgage financing.

The best way to determine what type of financing is 1) available to you for a specific property and 2) the best fit for your requirements and the time you have to work with is by utilizing the services of a experienced construction mortgage broker that has a track record placing Toronto land development loans.

If you require a Toronto land development loan, please give me a call so I can quickly assess your requirements and provide land development financing options that meet you needs and can fit into the time frame you are working in.

Click Here To Speak To Toronto Construction Mortgage Broker Joe Walsh.

The post Toronto Land Development Loan first appeared on Ontario Construction Loans And Mortgage Financing.