Another common use of hard money or private money is to finance the horizontal construction of residential or commercial development projects. Before homes or commercial buildings can be constructed on a site, infrastructure must first be installed and built to accommodate the forthcoming structures. This infrastructure includes the road, sewer, water, gas, electric, roads, gutter, and street lights, etc. Working with a hard money lender may be considerably easier, faster, and more simple to obtain the financing to put in these improvements than working with a banking institution.
Primary Source Lending has been a leader in real estate development loans for many years. One recent case, we had a borrower that had owned land that had been purchased many years previously. It was originally zoned as a commercial development, but as the dynamics of the city changed throughout the years and the commercial space was no longer needed, the city allowed the borrower to rezone the land as residential. The borrower obtained funding from Primary Source Lending to complete all of the infrastructure improvements on the property to sell lots and build homes. In this particular case there was sufficient equity in the land that the borrower did not need to bring any additional money to closing other than the land.
If you have a specific scenario that you would like to run by us, please send us an email or call us. We’d love to help.