Most land investors know to ask, "What's the interest rate?" Fewer ask, "What else are you charging me?"

Many private land loans look fine on the surface, but once you unpack the fees, the real cost of capital is much higher than it appears.

What Hidden Fees Show Up in Land Loans?

Here are some of the extra costs that like to hide in the fine print:

Any single fee might not kill the deal, but stacked together they can quietly turn a "good" loan into an expensive one.

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How Do You Read a Term Sheet Like an Investor?

When you receive a term sheet or LOI, look for:

If you don't see a fee section, ask: "Are there any other lender fees, upfront or at closing, that aren't listed here?"

What Does "No Junk Fees" Actually Mean?

When Damen Capital says "no junk fees," it means:

You still pay normal third-party closing costs (title, recording, etc.), but the lender side is intentionally simple.

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How Can a 10% Loan Really Cost 15% or More?

The Real Numbers

Loan amount$200,000
Stated interest10%
Points (3%)$6,000
Lender fees (underwriting, doc, processing)$3,000
Day-one out-of-pocket to lender$9,000 (4.5%)

On paper, you see 10%. In reality, if you exit in 12 months, your true cost of capital is much closer to 14–16%. This doesn't mean the loan is automatically bad — it just means you should calculate using all the numbers, not just the rate.

A Simple Checklist for Any Land Loan

If you can't confidently answer "yes" to each one, slow down and get clarity.

Next Steps

Frequently Asked Questions

What hidden fees show up in private land loans?

Large origination points (3-5%+ of the loan amount), processing or admin fees, lender doc prep fees, underwriting or review fees, extension fees, and prepayment penalties.

What should I look for on a land loan term sheet?

The interest rate, points or origination, all one-time fees itemized, prepayment terms including any minimum interest, and what happens if you need an extension.

What does "no junk fees" mean at Damen Capital?

No surprise add-ons at closing and no extra review or processing charges halfway through the deal. You still pay normal third-party closing costs like title and recording.

How can a 10% land loan really cost 15% or more?

On a $200,000 loan at 10% with 3 points ($6,000) and $3,000 in lender fees, you pay $9,000 to the lender on day one. If you exit in 12 months, your true cost of capital is much closer to 14-16%.

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