I have a light industrial park which I am doing the loans on. The project should be finished around January. Some of my clients want to build as soon as possible but several want to hold onto the property for a year or two.

These clients are all A paper, have been in business for many years and are successful. I need land loans for some of them until they figure out what they want to do with the land. I am in an area where industrial property is hot and the prices of these lots have already been raised twice.

I am looking for 80 - 90% LTV with good rates. These are good borrowers and do not deserve to pay the high rates I have been finding. Any help would be much appreciated!

I'm a bit confused. Are they buying land now to develop later or are they buying an existing industrial park with extra land? What do you mean by "I need land loans for some of them "? Why just some of them?

Raw land loans do not go to 80-90% unless they are part of a complete A&D package. This means:

They have to begin development shortly after closing on the land.
They have to know what they are going to build when they apply for the loan.
They should have construction bids together and be able to show that the project is feasible and can cash flow.
LTV of the completed property not to exceed 75%
Generally have to have pre-leasing at least 1:1.00 DSCR, with overall stabilized DSCR of 1.20 - 1.25 + to get 90% A&D financing
Borrower need to have excellant credit, strong personal financials and have a track record.

Borrowers should have 10% of the A&D total as their equity into the project.

If it's just speculative land acquisition with no immediate plans to develop, think 50, maybe 60% LTV. Much higher risk to the lender, therefore lower LTV.

75% LTV with around 2 to 3 years of maturity is the best that you could get from a Commercial Bank lender without running into regulatory walls.

Those terms are reserved for the best customers of the institution. 50% to 65% would be more likely.

Hello Angi..

First I would like to say, I agree with everything Commercial LO has said in regards to this situation. I actually would prefer to see 20% of the land Acquisition and Development into the project. This way It will be easier to finance the remaining 80% LTV for the completed project. This would have to be Owner Occupy. It is always a case by case scenerio depending on the project, location, and all the other variables that we have to consider. I also live in California and know what you mean in regards to the RISING PRICES. I noticed you mentioned that the Rates they were givin were too high? If you need to talk to have a better understanding of the process just click on my username, then click on my e-mail link. Give me your contact number or we can chat through e-mail. Good luck and take care..

There are 79 lots. 50 have already been sold, I am working on loans for the remaining lots. The project should be done in Jan or early February which is when streets, gutters, sewer and electric should be in. I have several clients who want to occupy and build on one lot and buy an adjacent lot to sell in a few years. These are A paper clients who have been in business for many years.

I am working on SBA loans for some of the clients but they need an interim land loan because of the time frame that surrounds SBA. I have been in contact with two banks who are dying to get in on my clients but are not willing to work with SBA. ( Not all my clients qualify and/or need SBA, by the way)

FYI, I am new to commercial loans but was given this industrial park to do the loans on from some commercial guys that I worked with in the past because they trust my integrity. I am excited about it and any help is much appreciated. If you think you can help with financing, I do not mind you contacting me at 209-338-5108,which is my office. If you want to talk to me about doing an SBA loan, I am working with one person which has given me much help by investing his time in me and my clients. Thank you so much for responding to me. I really look forward to what anyone has to offer:!