Posted: Tuesday, February 21, 2023
Author: Vinny Delgado, Partner, Ranch Sales | Licensed in MT
Dear Vinny,
I am interested in purchasing a rural ranch property. I have some cash on hand but need more for the size and types of properties that I am interested in. How do I start the process of getting a land loan? What options are there for income-producing properties? What do I need to have prepared before I talk to a bank?
Dear Interested in Rural,
You would be surprised to know how few lending institutions will lend on these types of land assets. If you are working with a land broker, I would assume she or he would know where to start these conversations and with personal contacts within the agricultural lending world. Once you have established a relationship with a bank and have been able to review terms that I hope are favorable to your needs the lending process is no different than if you were to purchase a house. Tax returns/financial statements and all the typical documentation will be required. If you are wanting to finance we always recommend starting this process far before you find the right ranch to purchase. Seller financing can sometime be an option also, but we typically see them as a short term 3-5 year deals at a higher rate than most banks and a big balloon at the end of the loan.
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