How difficult is it to get a 50-60% LTV loan on a non income producing ranch? (Second home).

Assuming borrower has good credit, and his income to debt ratio can handle more debt.

If you have a good equity and liquidity position and have sufficient cash flow, it should not be a problem to get a 50 to 60% loan. Where do you live and where are you buying property? I'm biased, but I'd look at Farm Credit.

Not difficult at all to finance given those criteria. But with COVID, everyone and their mom has been trying to do the same thing for the last months, so finding the property has been the really difficult part. We helped several posters on this forum buy and sell rural properties and ranches around Texas this year. Would love to help you too, and get you a nice rebate to cover closing costs and maybe more.

Easy.

KC_Ag14 said:

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As easy as making a call to your local Capital Farm Credit office.

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They do not lend anything on non-income producing property. Just talked to them.

So it's not easy.

Jimmy Conway said:

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KC_Ag14 said:

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As easy as making a call to your local Capital Farm Credit office.

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They do not lend anything on non-income producing property. Just talked to them.

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Interesting. That's surprising. When you say "ranch," how many acres are we talking? Is the home the majority value of the property, or the dirt?

Two data points off the top of my head from Capital Farm Credit from this summer. First deal they funded was 20 acres of raw land for a future homestead. Second deal they funded was over 200 acres being used for a second home.

This applies to all debt....

Just because one lender, or possibly even one employee of a lender, tells you something can't be done...that doesn't mean that it can't be done. It just means you haven't found the right person/lender yet.

Red Pear Realty said:

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Two data points off the top of my head from Capital Farm Credit from this summer. First deal they funded was 20 acres of raw land for a future homestead. Second deal they funded was over 200 acres being used for a second home.

This applies to all debt....

Just because one lender, or possibly even one employee of a lender, tells you something can't be done...that doesn't mean that it can't be done. It just means you haven't found the right person/lender yet.

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Correct! Details are important to this deal.
What is the "ranch" size, what is the home going to be worth vs the land value, where is your primary home? That's just for starters.
Most importantly the statement that the ranch is non income producing is irrelevant, the borrower just need to show income sufficient to repay all debt, including the new loan they are seeking.

Not true

As mentioned you might fill in some details. You mentioned it's a 2nd home. Is that your primary motivation? How many acres is the property?

Deal with a local bank in the county where you are purchasing the land.

1939 said:

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Not true

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1939's right, you know.

https://vimeo.com/395986748

Jimmy Conway said:

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KC_Ag14 said:

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As easy as making a call to your local Capital Farm Credit office.

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They do not lend anything on non-income producing property. Just talked to them.

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Say what? I've closed two transactions with them this year for 280 acres of land that is definitely NOT producing any income. It's doing quite the opposite to my wallet!! But I absolutely love it!

Hanrahan said:

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Jimmy Conway said:

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KC_Ag14 said:

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As easy as making a call to your local Capital Farm Credit office.

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They do not lend anything on non-income producing property. Just talked to them.

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Edit: And I did 20% down. Only to get the best rate, otherwise could have done half of that.


Say what? I've closed two transactions with them this year for 280 acres of land that is definitely NOT producing any income. It's doing quite the opposite to my wallet!! But I absolutely love it!

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Ddp