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Land

Land Development Financing
by Rick Maples
Buying and developing land is capital intensive, which requires land
development financing. Here is how land development financing helps you for land
development purposes.
* Land development financing and liquidity: Land development financing helps
the residential land developers with the necessary resources to control their
finances. This provides cash flow and liquidity for the project.
* Land development financing and ongoing finance: Land development financing
is a reliable source of continuous finance for existing and future subdivision
projects.
* Land development financing and projects: Financing for land development
provides the developer with the resources and products for development of the
project.
* Land development financing and land notes: Land development financing
allows land note portfolio purchase in lump sum. This also allows a committed
credit line to help instant purchase of land for development. The developer can
take advantage of better land purchase price because of ready cash made
available through land development financing.
* Land development financing and joint venture: Land development financing
through the debt equity program provides 100% commercial loan for niche product
development. The minimum loan amount is $5million, involving an insurance
financial guarantee from the investor and a joint venture for that particular
project.
Land Development Financing for Land Development Costs
Land development costs are quite substantial and are tided over through land
development financing. Certain factors involved in land development ascertain
financing needs. The geographical location of the development site affects the
construction and land development costs based on the distance associated with
transporting construction material, transporting workers, distance of waste
sites, and connecting the site to the nearest roads. The more cost involved in
the geographical location factor, greater the amount of land development
financing.
Land development costs are influenced by zoning, which involves density and
land size. Low-density zones increase the land development costs. Thus, land
development financing depends upon the zoning factor.
Topography and soils too have a direct bearing on the development costs.
Steeper sites and poor soil conditions increase the land development costs and
correspondingly, the land development financing needs.
Development of subdivisions at higher elevations for construction of water
pump station and reservoirs too add to the land development costs, which in turn
effect the land development financing requirements.
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