Balloon Payment Coming Due? Refinance Your Land in 7 Days

Can I refinance a balloon payment on land?

Yes, if you are an investor and the land is held for business. We refinance vacant land when a balloon payment is coming due on a seller financed note or another loan. We pay off the current balance at closing and you owe us instead. It is a straight refinance with no cash out. Loans run $30K to $1M, close in 7 days, and need no appraisal.

More land sellers are writing balloon notes to keep the monthly payment low. That works until the balloon comes due and the buyer does not have the cash. If the buyer misses it, the seller can foreclose, and the buyer can lose the land and everything paid in. A refinance buys time to sell the land the right way.

How much will you lend on a balloon refinance?

Up to 65% of the land's value, based on what you owe today. We look at your payoff amount and the land's conservative value from recent comparable sales. If the payoff is 65% of value or less, we can pay it off in full. If you owe more than that, you bring cash to closing to cover the gap. There is no cash back to you on a refinance.

Here is how that looks. You owe $60,000 on land worth $100,000. That is 60% of value, so we pay off the full $60,000. You owe $70,000 on the same land. We can lend $65,000, so you bring $5,000 plus the doc fee and title costs to closing. If you owe $90,000 on $100,000 of land, a refinance will not work, and we will tell you on the first call.

Who qualifies for a land balloon refinance?

Investors holding land in an entity for a business purpose. The borrower is an LLC or other entity that bought the land to resell, subdivide, or develop. Land you bought for yourself, to live on or for your own use, is a consumer loan, and we cannot make it. The land must be vacant, 2 acres or more, with legal access.

We do not lend in California, Arizona, Nevada, New York, New Jersey, North Dakota, South Dakota, or Vermont. The land cannot be mostly wetland or flood zone. No commercial property.

When should I start a balloon refinance?

At least 30 days before the balloon is due. We close in 7 days once we have the payoff letter and title. But payoff letters, title work, and a slow note holder can take longer than you think. Start a month or more before the due date. Waiting until the week the balloon is due is how investors end up in default.

Get the payoff amount in writing from the note holder or its servicer. Send it with the deal. If the note holder will give you a short extension, get that in writing too.

Is this a long term loan?

No. It is a 24 month bridge loan, interest only. Our loan gives you up to 24 months to sell the land or refinance again. It is not a 20 year loan. Rates are 14% at $100K and up and 16% under, interest only, with a 5 month minimum. $600 doc fee, 2% exit fee at payoff, $25 a month servicing, no points at closing.

On the $60,000 example, the loan at 16% is $800 a month in interest, paid monthly starting 30 days after closing. Have a plan to sell before you close. Selling on owner financing? We can buy that note at closing through our sell at closing program, and the sale pays off our loan.

I hold the balloon note. Can you help me?

Yes. Sell us the note instead. If you are the seller holding a balloon note and your buyer cannot pay, you have another way out. We buy seller financed land notes, balloon notes included, for cash. You get paid now and we deal with the balloon. Balloons due in under 3 years are priced case by case.

See what your note is worth with the note value calculator, which has a balloon option, or start at sell your land note.