Blog

Buying Rural Land With Borrowed Money – The First Step

By Tom Brickman on June 6, 2016

Many people use borrowed money to purchase rural land.

If this fits you, we suggest your first-step be to obtain a “pre-qualification letter” (PQL) issued by a commercial lender.

The benefit to you of a PQL is that it puts you in a strong position with potential sellers.  Every landowner (seller) entering a contract contingent on financing fears the buyer may prove incapable of closing the deal.  A PQL let’s a seller know you are likely financially capable of closing a loan.

In fact, at Cyprus Partners our clients are encouraged not to enter into a contract contingent on financing (or agreeing to “seller finance”) if we don’t have a PQL in the file.

A PQL is easy to get (takes a day or two) and does not require you to identify a property you intend to purchase.  You’ll have to provide the bank with a couple years of tax returns and a financial statement.  Banks are happy to give you a PQL because they want your business if you borrow money.

A PQL is not a loan commitment.  It is simply a letter that says the bank will lend you money (up to a certain amount) if the property you eventually identify passes appraisal.

A detailed discussion of the pros and cons of borrowing money to buy rural land is discussed in detail in our e-book available here.

Leave a Reply

Your email address will not be published. Required fields are marked *

Featured Blog Posts

How Not To Sell Timber

By Tom Brickman on July 12, 2018

Decisions of how and when to sell timber are difficult…
Read More

Cyprus Partners Listing Mentioned In Washington Post on-line

By Tom Brickman on December 28, 2017

Cyprus Partners 7,400 acre Georgia listing mentioned in Washington Post on-line interview of Eric O’Keefe, editor of Land Report magazine, on Top-100 Landowners.

CLICK HERE to see full article.