How to Finance Large Land Deals: Complete Guide to $300K-$1M+ Land Loans

By Eric Scharaga | Updated November 2024 | 11 min read

You've graduated from $50,000 land flips. You're analyzing $300,000 subdivision opportunities. You found a $650,000 development deal that could net you $1,000,000+.

There's just one problem: Nobody will finance it.

Your local bank laughed when you said "vacant land." Your private lender caps out at $150,000. Hard money lenders want 40% down and charge 18% interest.

The deal of a lifetime sits there, and you can't move on it.

I've watched talented land investors hit this ceiling for years. They master small deals, build expertise, develop the vision for larger opportunities—then get stuck because financing doesn't scale with their ambition.

After 15 years financing land deals from $30,000 to $1,000,000+, I'm going to show you exactly how to finance large land transactions, what lenders look for, and how to structure deals that get approved.

Why Large Land Deals Are So Hard to Finance

Let's start with why you're hitting walls when you try to finance deals over $200,000:

Problem #1: Banks Don't Understand Vacant Land (Especially Large Parcels)

Banks view vacant land as the riskiest collateral:

• No cash flow

• Difficult to value

• Slow to liquidate

• Uncertain development timeline

At $50,000-100,000, some banks will begrudgingly lend. At $300,000-$1,000,000, they almost always say no.

Their logic:

• "What if the borrower defaults?"

• "How long would it take us to sell 80 acres of raw land?"

• "Who's our buyer for a half-finished subdivision?"

Result: Automatic decline on vacant land over $200,000.

Problem #2: Most Private Lenders Have Capital Constraints

Small private lenders are individuals or small funds with limited capital:

• They might have $2-5M to deploy total

• They can't put $500K-$1M into one deal (too much concentration risk)

• Their max loan might be $100K-200K per deal

• They need to spread capital across 10-20 deals

Problem #3: Hard Money Lenders Want Huge Down Payments

Hard money lenders willing to touch large land deals typically require:

• 50-60% down payment

• Higher interest rates (16-20%)

• 4-6 points at closing

• Short terms (12 months)

A $750,000 deal might require:

• $375,000 down payment

• $30,000 in points

• $120,000 in interest (12 months at 16%)

Total cash needed: $525,000 to borrow $375,000. That doesn't work.

Problem #4: Deal Complexity Increases with Size

Larger land deals often involve:

• Subdivisions requiring planning approvals

• Environmental studies

• Infrastructure requirements

• Multiple exit strategies

• Longer hold periods

Most lenders don't have the expertise to underwrite this complexity.

Problem #5: Speed Matters Even More

On a $50K flip, you might have 60 days to close. On a $650K development opportunity, other investors are moving fast. You need approval and funding in 7-14 days, not 90.

The combination of size, complexity, speed, and land expertise eliminates 95% of lenders.

The Different Types of Large Land Deals

Before we discuss financing, let's categorize the types of deals you're trying to finance:

Type #1: Subdivision Opportunities ($200K-$1.5M)

Example:

• Buy 80 acres for $800,000

• Subdivide into 40 lots

• Sell lots for $45,000 each = $1,800,000 gross

• Net profit: $700,000-900,000

Financing challenge: Lenders worry about entitlement risk, timeline, and absorption rate (how fast lots sell).

Type #2: Development Pre-Construction ($150K-$800K)

Example:

• Buy 25 acres near growing metro for $600,000

• Hold for 18-24 months while area develops

• Sell to builder for $1,000,000

• Net profit: $300,000-400,000

Financing challenge: No immediate cash flow, speculative appreciation, uncertain timeline.

Type #3: Infill Commercial Land ($250K-$1.2M)

Example:

• Buy 5 acres in commercial corridor for $750,000

• Hold while securing tenant/buyer

• Sell to commercial developer for $1,100,000

• Net profit: $250,000-350,000

Financing challenge: Commercial land is even harder to finance than residential.

Type #4: Bulk Land Acquisition ($300K-$2M+)

Example:

• Buy 150 acres agricultural land for $900,000

• Entitle 75 acres for residential

• Sell entitled acres for $1,800,000

• Net profit: $600,000-800,000

Financing challenge: Long timeline (24-36 months), entitlement risk, requires expertise lenders don't have.

Type #5: Portfolio Purchases ($200K-$1M+)

Example:

• Buy 20 lots from motivated seller for $600,000

• Seller finance or private financing needed

• Sell individually for $50,000 each = $1,000,000

• Net profit: $300,000-400,000

Financing challenge: Bulk discount creates immediate equity but multiple properties complicate underwriting.

What Lenders Look For on Large Land Deals

When you're seeking $300,000-$1,000,000+ financing for land, here's what lenders evaluate:

Factor #1: Your Experience

For deals under $100K, lenders might work with beginners. At $300K+, and especially at $500K-$1M, they want to see:

• Prior successful land deals

• Track record of buying and selling

• Experience with similar deal types

• Industry knowledge

• Proven ability to execute on complex projects

What strengthens your application:

• "I've completed 25 land deals in the past 3 years"

• "I've subdivided 3 parcels previously"

• "I have a buyer lined up already"

• "My last subdivision netted $450K"

Factor #2: Deal Quality and Structure

Lenders analyze:

• Purchase price vs. value: Is there immediate equity?

• Exit strategy: How specifically will you repay the loan?

• Timeline: How long until payoff?

• Comparable sales: Do the numbers make sense?

• Use and entitlements: What can the land be used for?

What strengthens your application:

• Buying at 60-70% of market value

• Clear exit within 12-24 months

• Strong comparable sales data

• Property already entitled or simple use

Factor #3: Down Payment and Collateral

At $300K-$1M, lenders typically want to see:

• 20-35% down payment (lower with strong deals)

• Or cross-collateralization with other properties

• Or partner equity if joint venture

Example:

• $800K purchase

• $240K down (30%)

• $560K loan

Or:

• $800K purchase

• $0 down

• $800K loan

• Secured by the property + $300K in additional collateral

Factor #4: Market and Location

Lenders consider:

• Growth markets vs. declining markets

• Proximity to metro areas

• Economic drivers in the area

• Absorption rates for similar properties

Strong markets: Growing metros, path-of-growth areas, high-demand locations

Weak markets: Rural, declining population, limited buyer pool

Factor #5: Your Financial Capacity

For large deals, especially $500K-$1M, lenders want to see:

• Cash reserves beyond down payment

• Ability to carry payments if deal takes longer

• Other income sources or assets

• Financial stability

• Track record managing larger capital

They're not just underwriting the deal—they're underwriting you.

How to Structure Large Land Deal Financing

Here are proven strategies to get large land deals funded:

Strategy #1: Cross-Collateralization for Higher Leverage

Instead of huge cash down payments, pledge additional properties:

Example:

• Want to buy: $750K development property

• You own: 5 properties worth $400K total (free and clear)

• Structure: $750K loan secured by new property + 5 existing properties

• Total collateral: $1,150K

• LTV: 65%

• Down payment: $0

This preserves your cash while getting the deal done.

Strategy #2: Seller Financing on Part of the Deal

Negotiate with the seller to carry back some financing:

Example:

• Purchase price: $700K

• Seller finances: $300K at 8% (subordinate position)

• Private lender finances: $300K at 14% (first position)

• Your down payment: $100K

• Total capital needed: $100K instead of $240K

Strategy #3: Joint Venture with Equity Partner

Bring in a capital partner:

Example:

• $900K deal

• Partner puts in $400K (45%)

• Lender provides $500K (55%)

• You bring expertise and management

• Split profits 50/50

Partner gets return on capital, you do the work and get equity without full capital requirement.

Strategy #4: Phased Financing

Break large deals into phases:

Example:

• 80-acre subdivision opportunity ($1.2M total)

• Phase 1: Finance 40 acres ($600K)

• Subdivide and sell first 20 lots

• Use proceeds to buy remaining 40 acres ($600K)

• Subdivide and sell final 20 lots

Lower initial capital requirement, prove concept before full commitment.

Strategy #5: Bridge to Permanent Financing

Use short-term private financing, then refinance:

Example:

• $850K purchase with private lender (14%, 24 months)

• Subdivide and obtain approvals (12 months)

• Refinance with bank or portfolio lender at lower rate (9%, 5 years)

• Pay off private lender

• Sell lots over time with lower carrying cost

How to Present Large Deals to Lenders

When seeking financing for $500K-$1M land deals, presentation matters even more:

What to Include in Your Loan Package:

1. Executive Summary (1-2 Pages)

• Property address and description

• Purchase price and loan amount requested

• Your experience and track record

• Exit strategy summary

• Why this is a good deal

• Key financial metrics at a glance

2. Property Details

• Acreage and dimensions

• Zoning and use

• Utilities availability

• Access and frontage

• Aerial photos/maps

• Tax parcel information

• Environmental considerations

3. Financial Analysis

• Purchase price

• Improvement costs (if any)

• Holding costs

• Marketing costs

• Expected sale price

• Comparable sales supporting value

• Profit projection

• Timeline

• Sensitivity analysis (what if timeline extends)

4. Exit Strategy

• Specific plan to repay loan

• Timeline

• Contingency plans if primary exit doesn't work

• Market analysis supporting exit

• Backup buyers or plans

5. Your Credentials

• Resume of land investing experience

• List of completed deals (especially larger ones)

• References from past lenders or partners

• Financial statement showing reserves

• Track record with projects of similar scale

6. Supporting Documents

• Purchase contract (if applicable)

• Preliminary title report

• Survey (if available)

• Environmental info

• Comparable sales data

• Letters of intent from buyers (if applicable)

• Market studies or feasibility reports

The more professional and complete your package, the faster approvals happen—especially critical for $500K+ deals.

Common Mistakes on Large Land Deal Financing

Mistake #1: Underestimating Timeline

Investors project 12-month hold, reality is 24-30 months. Ensure you can carry a $750K loan longer than planned.

Mistake #2: Insufficient Reserves

All your capital goes into down payment and closing costs. No reserves for carrying costs, improvements, or marketing.

Better approach: Keep 12-18 months of reserves on deals over $500K.

Mistake #3: Overpaying for the Wrong Property

Just because you can get $800K in financing doesn't mean you should. Large deals require extra scrutiny on purchase price and exit.

Mistake #4: Ignoring Entitlement Risk

Assuming you can subdivide or rezone without confirming with the city. Entitlement risk kills large deals.

Better approach: Get written confirmation from planning department before closing.

Mistake #5: Over-Leveraging

Borrowing 100% with thin margins on a $1M deal. If anything goes wrong (market shifts, longer timeline, unexpected costs), you're in trouble.

Better approach: Build in cushion—don't use maximum available leverage on your largest deals.

Case Studies: Large Land Deals We've Financed

Case Study #1: $425K Subdivision in North Carolina

The Deal:

• 42 acres of vacant land

• Purchase price: $425,000

• Buyer's plan: Subdivide into 21 lots, sell for $45K each

• Projected gross: $945,000

• Projected net profit: $400,000+

The Challenge:

• Buyer's bank declined (vacant land)

• Hard money wanted $200K down + 5 points

• Needed to close in 10 days

Our Solution:

• Approved in 48 hours

• $425K loan at 14%

• No points at closing

• Cross-collateralized with buyer's other properties

• Closed in 9 days

The Result:

• Buyer completed subdivisions in 14 months

• Sold 18 lots for $810,000

• Paid off our loan

• Net profit: $280,000 (after all costs)

• Now working on 2nd larger subdivision with us

Case Study #2: $675K Development Land in Texas

The Deal:

• 35 acres in path-of-growth area

• Purchase price: $675,000

• Plan: Hold 18-24 months, sell to builder

• Expected sale: $1,200,000

The Challenge:

• No immediate exit (speculation)

• Long hold period

• Banks wouldn't touch speculative land

• Large loan size scared away typical private lenders

Our Solution:

• Evaluated buyer's track record (8 successful similar deals)

• Analyzed market growth trajectory

• Approved $500K loan (buyer put $175K down)

• 24-month term at 13%

The Result:

• Market developed faster than expected

• Sold in 16 months for $1,275,000

• Buyer profit: $480,000

• Buyer is now acquiring 3 more parcels, including one at $850K

Case Study #3: $850K Portfolio Purchase

The Deal:

• Seller had 18 lots across 2 subdivisions

• Purchase price: $850,000 ($47,200 per lot)

• Market value: $65,000 per lot

• Plan: Sell individually over 12-18 months

The Challenge:

• Multiple properties complicates underwriting

• Buyer wanted to close in 1 week

• Lenders wanted appraisals on each lot

• Large total loan amount

Our Solution:

• Reviewed comparable sales on each lot

• Confirmed immediate equity of $320K

• Approved $650K loan ($200K down)

• Closed in 6 days

The Result:

• Buyer sold 10 lots immediately for $650K

• Kept 8 lots (essentially free)

• Paid off our loan in 60 days

• Net profit: $420K over 18 months as remaining lots sold

Case Study #4: $920K Subdivision Development

The Deal:

• 65 acres approved for 32-lot subdivision

• Purchase price: $920,000

• Approvals already in place (shovel-ready)

• Plan: Complete infrastructure, sell lots

The Challenge:

• Nearly $1M loan request

• Required confidence in borrower's ability to execute

• Long-term project (24-30 months expected)

Our Solution:

• Borrower had completed 3 prior subdivisions successfully

• Strong market with high absorption rates

• Approved $700K loan (buyer provided $220K down + $150K in cross-collateral)

• 24-month term with extension option

The Result:

• Infrastructure completed in 9 months

• 8 lots sold immediately for $480K

• Paid down loan to $400K

• Refinanced remaining balance with local bank at 9%

• Continuing to sell lots with lower carrying cost

• Project on track for $800K+ total profit

Regional Considerations for Large Land Deals

Some states and regions are easier than others for deals over $500K:

Easier Markets (Faster Growth, Simpler Process):

• Florida

• Texas

• Georgia

• North Carolina

• South Carolina

• Tennessee

More Challenging Markets:

• California (regulations, timeline)

• Northeast states (seasonal, slower)

• Rural markets (limited buyer pool)

This doesn't mean don't invest in challenging markets—just factor in longer timelines and potentially harder financing.

When Large Land Deals Make Sense (And When They Don't)

✓ Large Deals Make Sense When:

• You have proven track record with smaller deals

• The market fundamentals are strong

• You have clear, specific exit strategy

• You can carry the deal 2X longer than planned (cushion)

• Purchase price is 60-75% of value (built-in equity)

• You have reserves for contingencies

• For $750K+ deals: You've successfully completed at least 2-3 deals over $250K

✗ Avoid Large Deals When:

• This would be your first or second land deal ever

• You're jumping from $100K deals straight to $800K

• You're speculating on future value without comps

• You'd be fully leveraged with no reserves

• The exit requires "everything going perfectly"

• Market is declining or uncertain

• You can't clearly articulate the exit strategy

Start smaller, build experience, then scale into $500K-$1M deals.

How Damen Capital Handles Large Land Deals

We've built our lending specifically to support investors scaling from small to large deals:

Our Large Deal Capabilities:

✅ Loan Amounts: $50K to $1M+

• No arbitrary caps

• Scale with your ambition

• Same fast process regardless of size

• We've funded deals from $30K to over $1M

✅ 48-Hour Approvals, 7-Day Closings

• Speed doesn't slow down on larger deals

• We understand urgency increases with deal size

• Even $750K+ deals get same fast timeline

✅ In-House Funding

• We use our own capital

• No brokers shopping your deal

• One decision-maker

• Confidential and fast

• Capital depth to handle $1M+ transactions

✅ Land Expertise

• We've financed subdivisions, developments, bulk purchases, commercial land

• We understand the business model

• We can underwrite complexity

• We've seen deals from $50K to $1M+

✅ Cross-Collateralization

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• Use existing properties to reduce down payment

• Preserve cash for operations

• Scale faster

• Critical for larger deals

✅ Reasonable Terms

• $0 points at closing (saving you $20K-$50K on large deals)

• 2% exit fee only

• 24-month terms

✅ Flexible Structure

• First position or subordinate position

• Multiple properties in one loan

• Flexible exit strategies

• Can structure complex deals

Recent Large Deals We've Funded:

• $920K: 65-acre subdivision in Texas

• $850K: Portfolio of 18 lots

• $675K: Development land holding

• $475K: 50-acre development in Florida

• $425K: Subdivision in North Carolina

Your Application Process for Large Deals:

Step 1: Initial Call (15-30 Minutes)

• Discuss the deal in detail

• Review your experience

• Confirm it fits our criteria

• Provide preliminary terms

Step 2: Submit Loan Package (Same Day)

• Property details

• Your analysis

• Exit strategy

• Your experience and track record

• Financial capacity

Step 3: Approval (48 Hours)

• We review and underwrite

• May request additional details on larger deals

• Provide formal loan approval

• Lock in terms

Step 4: Close (7-10 Days)

• Title work

• Loan documents

• Funding

• Done

No 90-day bank process. No committees. No surprises.

Questions About Large Land Deal Financing

Q: What's the largest land loan you'll make? A: $1M+ for qualified deals. We evaluate each opportunity individually. Strong deals with experienced investors and solid fundamentals can go higher.

Q: Do I need 20-30% down on a $750K deal? A: Not necessarily. With cross-collateralization or strong immediate equity, we can do 100% financing even on larger deals.

Q: Will you finance land I plan to hold for 3+ years? A: Our loans are 24 months, but we can discuss extensions or refinancing. Best for 12-24 month holds, though we've worked with longer-term projects.

Q: What if I'm buying a $600K property but only have 5-10 land deals under my belt? A: We want to see proven track record. Ideally you've done at least 2-3 deals over $200K before attempting $600K+. Consider partnering with experienced investor or starting with a smaller deal.

Q: Do you finance raw land that needs entitlements? A: Yes, if you have experience with entitlements and realistic timeline. We evaluate entitlement risk carefully, especially on larger deals.

Q: What credit score do I need for a $800K loan? A: We're asset-based lenders. Credit matters but isn't the primary factor. We've financed borrowers with 550-800+ credit scores. Deal quality and your experience matter more.

Q: Can I use the same collateral property for multiple loans? A: If there's sufficient equity, potentially yes. We evaluate total exposure and combined LTV across all loans.

Q: How do you evaluate my ability to handle a $1M project? A: We look at your track record, financial capacity, the deal's fundamentals, and your specific experience with projects of similar scale. We want to see you've successfully managed progressively larger deals.

The Bottom Line on Large Land Deal Financing

Graduating from $50K flips to $500K-$1M opportunities is where serious wealth is built in land investing. But only if you can finance these deals.

Traditional banks won't help. Most private lenders can't help (capital limits). Hard money lenders want terms that don't work.

You need a lender who:

• Understands land and complexity

• Has capital for large deals ($500K-$1M+)

• Moves fast (deals don't wait)

• Offers reasonable terms

• Can structure creative solutions

• Has actually funded deals at this scale

Key Takeaways:

• Large land deals ($500K-$1M+) require specialized financing

• Banks almost never finance vacant land over $200K

• Cross-collateralization is key to reducing down payment needs on large deals

• Experience and deal quality matter more than credit score

• Professional presentation gets faster approvals

• Build up to $1M deals—don't jump from $100K to $800K

• The right lender makes all the difference

Ready to scale up to $500K-$1M deals?

Stop leaving money on the table. Get approved in 48 hours.

Call/Text: 302-526-0200Email: eric@damencapital.com