Arizona land loansare a risky proposition for any lender. If you happen to be a real estate developer, the realities of your deal, might not mesh with the tedium of bank bureaucracy or the impersonal attitude of big time national lenders. Consider the following story and learn why you need to go local and private when it comes to getting financing for your development deals.
Say there is a real estate developer looking to build a sweet little condo complex right in the midst of all that glamour and neon downtown. Given the location he’s sure these units will sell like hotcakes.
The problem? – The Parcel he wants to purchase is zoned commercially, and worse than that its only zoned for a single building.
Yet he’s been working with the city council for months, and approval for his plans to rezone seems within reach, now he just needs money to buy the lot.
Shouldn’t be a problem, right?
When it comes to Arizona land loans you need to go private
Given how solid his deal is our developer assumes he will have no trouble getting the financing needs from a local bank. The loan officer at the bank seemingly agrees with his projections, as a developer extends his hand “but…” the loan officer begins. The once friendly air in the room suddenly begins to dissolve.
The loan officer thoughtfully explains that the zoning issues make financing his deal impossible.
Our developer knows he has other options though; surely an alternative private lender won’t be hampered by bureaucracy like his local bank.
A brief phone conversation with a private lender he found online, inspires his hopes that his deal will close. But after weeks of unanswered emails, missed phone calls and radio silence our developer is getting frustrated.
Suddenly an alert on his phone chimes in, it’s the big online lender! He’s been rejected.
Why? Well the zoning issues of course, even though our developer mentioned these details in his initial meeting, the big absent-minded national lender- didn’t’t bother to following up with the city councilors he mentioned.
Our poor developers are at his wits end, and all hope seems lost.
When it comes to Arizona land loanslocal private lenders are the real deal
Our developer reaches out to a lender who is both a local and private lender who actually meets with him face-to-face.
During this meeting they go over his plans, his projections and all seems well and good. But our developer reluctantly admits to the local private lender, that his deal is contingent upon rezoning by the city council.
Instead of writing him off, the local private lender takes the time to reach out to the city council and even sets up meetings with some of its members. These meetings assuage said lender that rezoning is a foregone conclusion. The deal is sealed.
Our developer’s sleek modern condos with their glass facades and resplendent views of the skyline sell in short order, and all is right with the world.
What can we learn from this story?
If you intend to build a speculative real-estate project you need a lender who will take time to consider the details of your project, look past their rigid checklist and actually take the time to see your deal from a local’s perspective.
Big-time national lenders and local banks won’t be able to do either of these. Simply put if you are a real estate developer and want to buy land you need to go local and you need to private.
If you’re a real-estate developer in the Phoenix area, consider Level 4 Funding, a local and private lender, for all your land financing needs.
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About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.