The Power of a Land Loan Lender for Real Estate Investors

By Gregg Wolfer
Chief Operating Officer, Kennedy Funding

A promising piece of land can represent an enormous opportunity. But without access to capital, even a strong real estate vision can remain exactly that—a vision.

For real estate investors and developers, securing financing for land can be particularly challenging. Traditional lenders may be hesitant to finance raw or undeveloped land, while lengthy approval processes can create another obstacle: time.

When an acquisition needs to close, an existing loan needs to be refinanced or a developer needs working capital to keep a project on track, waiting months for an answer may not be an option.

That is where an experienced land loan lender can make a difference.

Kennedy Funding is a global direct private lender specializing in commercial real estate and land loans. Since 1987, the firm has built its business around financing transactions that may fall outside traditional lending parameters, including land acquisition, development, refinancing, workouts, bankruptcies, foreclosures and other time-sensitive situations.

With more than $4 billion in closed loans, Kennedy Funding has helped borrowers capitalize on real estate opportunities throughout the United States and internationally.

Why Land Financing Requires a Different Approach

Land doesn’t necessarily fit neatly into the lending criteria used by traditional lenders. But land financing is not limited to raw or undeveloped property. The collateral can include land with improvements or existing structures.

Kennedy Funding looks at the value of the real estate securing the loan. An appraisal helps establish the value of the property, while title and environmental review are also part of evaluating the collateral.

This allows Kennedy Funding to look at the underlying real estate and determine the financing that the collateral can support.

A Land Loan Can Do More Than Help Buy Land

Land financing isn’t limited to acquiring a property. Depending on the transaction, loan proceeds can potentially provide investors and developers with capital for a range of real estate-related needs.

Kennedy Funding has provided land-backed financing for purposes including:

Acquisition: An investor may need financing to purchase land before another buyer gets the opportunity.

Refinancing: Existing land can potentially provide the collateral needed to replace debt or restructure a borrower’s financial position.

Cash-out financing: Owners who have built equity in their real estate may be able to access a portion of that value without selling the property.

Working capital: Kennedy Funding does not provide construction loans. However, a land loan can provide working capital that can be used for construction. Kennedy Funding has provided land-backed financing where proceeds were used for infrastructure, site preparation, roadwork, soft costs and other project-related expenses.

For an investor, that flexibility can be significant. A land loan can not only help acquire an asset but also unlock capital that helps advance the broader opportunity.

Kennedy Funding’s own lending history provides examples. The firm provided a land loan for a residential development in Glen Cove, New York, with proceeds designated for working capital. A $1 million loan for a 192-home residential development in Milton, Delaware, provided working capital for roadwork. Kennedy Funding also closed a land loan for a proposed mixed-use development in Tulsa, Oklahoma, where proceeds were designated for site preparation, soft costs and working capital.

Speed Can Be Part of the Opportunity

Real estate doesn’t always wait.

A seller may have another buyer. An existing lender may have a deadline. A borrower may need to refinance quickly. A development opportunity may depend on securing a property within a specific timeframe.

That makes financing speed more than a convenience. In some transactions, it can be the difference between capturing an opportunity and losing it.

Kennedy Funding says it can issue commitments and close qualifying loans in days, not months.

The company has demonstrated that speed on land transactions as well. Kennedy Funding closed a $1.05 million loan backed by raw land in Tulsa just 10 days after the borrower accepted the loan offer. More recently, the firm announced a $1.5 million Alabama land acquisition loan that closed in 18 days.

As a direct private lender, Kennedy Funding works directly with borrowers to evaluate transactions and structure financing, without the multiple institutional layers that can accompany conventional financing.

Experience Matters When the Collateral Is Land

Land lending requires more than an understanding of real estate. It requires experience with the wide range of circumstances that can affect the property, the borrower and the transaction.

That experience can become particularly valuable when a transaction isn’t straightforward. These situations aren’t necessarily unusual in real estate, but they often require a lender accustomed to looking beyond a conventional checklist and evaluating the opportunity on its individual merits.

Kennedy Funding has decades of experience financing commercial real estate, including land, across a broad range of transaction types and circumstances.

Land Lending Without Borders

The challenges associated with land financing can become even greater outside the United States.

International lending involves different laws, governments, valuation considerations, local real estate practices and market conditions. Kennedy Funding has developed extensive experience navigating those complexities.

The firm lends throughout the United States as well as Canada, the Caribbean, Europe, Central America and South America.

Kennedy Funding has completed international land transactions in markets including Colombia and the Dominican Republic and has extensive experience throughout the Caribbean.

For investors pursuing opportunities beyond the United States, working with a lender experienced in both land and international transactions can provide access to financing that may be difficult to find through traditional sources.

Flexible Financing for Real-World Opportunities

Kennedy Funding provides commercial real estate loans ranging from $1 million to more than $50 million, with international loans generally starting at $3 million.

Those parameters can provide flexibility for borrowers dealing with unusual properties, tight timelines or financing needs that don’t fit neatly within traditional lending guidelines.

Rather than relying solely on a conventional checklist, Kennedy Funding evaluates the underlying real estate and the circumstances of each transaction to determine whether a viable financing structure can be created.

Turning Real Estate Potential Into Progress

Land can become housing, commercial space, mixed-use development, hospitality, industrial property or an entirely different real estate opportunity. But realizing that potential often requires access to capital at the right time.

The right land loan lender understands the asset, recognizes the challenges and knows how important timing can be.

With decades of experience financing land and commercial real estate in the United States and around the world, Kennedy Funding has built its reputation by helping borrowers pursue opportunities that may not fit traditional lending parameters.

When the land makes sense and the opportunity is there, Kennedy Funding is ready to look at the deal.

About Gregg Wolfer
Gregg Wolfer is the Chief Operating Officer at Kennedy Funding, a global direct private lender specializing in land and commercial real estate financing. He’s been personally involved with deals in commercial property acquisition, development and construction, income-producing properties, turnaround situations and more that have been worth hundreds of millions of dollars.