Can You Buy Land in North Carolina with No Cash?

When buying land your options are usually:

  • Cash – Farm Credit financing (for building a house on the land)
  • Owner financing (You usually need 20 – 25% down)
  • Save money
  • Build equity

Interviewer: What can you do if you don’t have any cash to buy land?

Eric: Land is not a product that banks like to finance. A lot of agents come to me and I’ll have a $200,000 piece of land, and they’re like, “We’re making an offer for 190 and it’s cash. Tell your sellers, this is cash.” I’m like, “Look, it has to be cash.” It is nearly impossible to get financing for land right now. One of the things that we have with cash is that, I understand you’re saying my seller’s going to get cash. Well, guess what? If you get a loan, guess what my seller gets? Cash. It’s numbers in a bank. Either way, it’s the same thing. It’s not like you’re walking in with a suitcase. Cash is cash, right?

Farm Credit Union will do it, but they want 30% down. They usually want 15-year amortization. That’s a huge chunk of change to put down.

The other option is owner financing, but usually they’re going to want 20% down. That’s a big deal.

The other thing is to save and actually pay the cash, and no one wants to do that. But I’m telling you, in order to buy land, if no banks are financing and you don’t have 20 or 30% to put down, then your only other option is to save. This is not the ideal way of doing it or whatever, but we can buy a five acre piece of land for 25,000, wait five years, sell it for 50,000 to start building up equity that way.

But if you don’t have cash, there are no tricks or anything. Cash is king. You have to have cash to buy land. At least in my transactions, it’s over 90%.