Eric Scharaga
Founder, Damen Capital
Private lender and direct land note buyer serving land investors nationwide. Featured on REtipster, Legends of Land, and Land Investing Online. LinkedIn →
Offer terms to widen your buyer pool, then your seller sells the note to Damen Capital at the same closing. Your seller keeps the down payment plus 80 to 90% of the note balance, usually 84 to 92% of the sale price in cash. You get paid at closing like any other sale.
It lets your seller offer owner financing and still get most of the price in cash on closing day, because we buy the note at the same closing.
Most vacant land buyers cannot get a bank loan, so a cash only listing shuts most of them out. With terms, your buyer puts money down and signs a promissory note. Your seller then sells that note to us at closing. The buyer gets payments they can afford, your seller gets cash, and the listing closes.
We do not buy land and we do not list it. We buy the note your seller creates. We prepare the loan documents, coordinate with the title company or closing attorney, and take on the default risk once the note is ours.
The full down payment plus 80 to 90% of the note balance, which usually works out to 84 to 92% of the sale price.
The bigger the down payment, the higher the note price and the more cash at closing. Two examples:
| $80,000 Listing | $100,000 Listing | |
|---|---|---|
| Buyer down payment | $20,000 (25%) | $20,000 (20%) |
| Note balance | $60,000 | $80,000 |
| We buy the note for | $50,400 (84%) | $64,000 (80%) |
| Seller cash at closing | $70,400 (88%) | $84,000 (84%) |
Examples only. Every note is bid on its own terms, the buyer's credit, and our own valuation of the land. See real closed deals on our case studies page.
At closing, on the settlement statement, the same way as a cash sale.
Because the note is sold at the same closing, your seller has the down payment and the note proceeds at the table. Your commission comes out of those proceeds under your listing agreement. We are the note buyer, not a party to your listing agreement, so the commission terms stay between you and your seller.
On the $80,000 example above, a 10% commission would be $8,000, paid from the seller's $70,400 at closing. (The 10% is only for illustration; use your own rate.) Without the note sale, your seller would only have the $20,000 down payment at closing to cover it.
Rural or residential land over 2 acres, worth at least $50,000, sold on a promissory note with a deed of trust or mortgage.
What does not qualify: steep or irregular parcels, failed perc tests or land that cannot be built on, infill lots unless zoned for mobile homes, desert, industrial, and commercial property. Full list: note buying criteria.
At least 20% down, around 10.9% interest, and an 8 year term gets your seller the best note price.
Advertise "Owner Will Finance" with a down payment that screens out tire kickers. Ask every buyer two questions: do you have 20% down, and how is your credit? Weaker credit can still work with a bigger down payment. Our land buyer credit matrix shows how much down each credit range needs. Different terms are fine; we can bid any note.
One rule: do not raise the price to net more. We run our own valuation and pay on the land's real market value. For pricing help, see how to price land for seller financing.
You market and negotiate. We bid the note, prepare the documents, and buy it at closing.
Market the land as owner financing available. See how to market and screen land buyers.
Agree on price, down payment, rate, and term with the buyer. We do not review properties before there is a buyer.
Send us the deal through the quote form. Your seller approves our offer and terms sheet.
We prepare the loan and transfer documents and work with the title company or closing attorney. More on closing a seller financed land deal.
The buyer signs the note, we buy it, and the seller is wired the down payment plus the note proceeds. Your commission is paid on the same settlement statement.
The parcel, the deal terms, and the buyer, in one message.
Neither. We do not buy land outright. We buy the promissory note your seller creates when they sell on terms, usually at the same closing.
At closing, on the settlement statement, under your listing agreement. Because the note sells at the same closing, your seller has the down payment plus the note proceeds to pay it.
Once you have a buyer and negotiated terms. We do not review properties up front. Send the deal through the quote form and we bid the note.
No. We run our own valuation and pay based on the land's real market value, so an inflated price will not raise the note price.
That is our problem, not your seller's. Once we buy the note, collections and default risk are ours. Your seller keeps the cash.
Over 250 notes purchased. Negotiate the deal, then bring it to us for a bid in 24 hours.
Private lender and direct land note buyer serving land investors nationwide. Featured on REtipster, Legends of Land, and Land Investing Online. LinkedIn →