You might be thinking of getting a hard money land loan. When it comes to real estate investing in Georgia, raw or vacant land can offer significant potential, but also substantial risk. Whether you’re an investor eyeing a development opportunity or a first-time land buyer, funding is often the first challenge. That’s where hard money land loans for raw land come into play.
Unlike traditional mortgages, hard money loans are provided by private lenders who prioritize the value and potential of the land over a borrower’s credit history. These loans offer fast approvals and short terms, making them ideal for time-sensitive transactions.
What Is a Hard Money Land Loan?
A hard money land loan is short-term financing backed by the land itself. These loans are especially useful when purchasing land that conventional lenders consider too risky, such as undeveloped or non-entitled property.
Private lenders focus on the land’s current value and its potential after development or resale. With loan terms typically ranging from 6 to 24 months, borrowers can act quickly on promising deals.
Learn more about what hard money lending is.
Property Types Eligible for Hard Money Financing
Vacant Lots
These are undeveloped parcels without utilities or infrastructure. They carry higher risk, but lenders may approve loans if there’s a clear exit strategy, such as selling the land post-zoning approval.
Infill Lots
Located in developed urban areas, infill lots are surrounded by existing infrastructure. These properties are seen as lower-risk and are attractive for redevelopment.
Covered Land
Covered land may include minimal improvements or outdated structures. These additions reduce risk for lenders and can lead to more favorable loan terms.
Land Status: Raw, Entitled, or Shovel-Ready
Raw Land
This land lacks zoning, utilities, and permits. It’s considered high-risk and typically comes with higher interest rates and shorter loan terms. A viable exit strategy is essential, such as rezoning or selling to a developer.
Entitled Land
Land with government-approved development rights. Because entitlement reduces uncertainty, loans on such properties often carry lower rates and longer terms.
Shovel-Ready Land
Fully permitted and ready for immediate construction, shovel-ready land offers the lowest risk and the most favorable lending terms.
Typical Loan Terms and Costs
| Loan Feature | Typical Range | Notes |
| Interest Rate | 8% – 15% | Higher due to land risk profile |
| Loan Term | 6 – 24 months | Designed for short-term use and quick turnaround |
| Origination Fee | 2% – 4% of loan amount | Covers processing and risk management |
| Down Payment | 20% – 40% | Higher equity is often required due to non-collateralized risk |
Key Exit Strategies
Property Sale
Flipping the land after entitlements or improvements is a popular strategy. Plan for a sale price that covers interest and loan fees to ensure profitability.
Refinancing
Transitioning to a traditional mortgage or long-term financing once the land gains entitled or shovel-ready status can reduce costs and extend payment terms.
Challenges to Consider
Investing in raw land involves specific risks:
- Zoning restrictions
- Environmental issues (e.g., wetlands, protected habitats)
- Infrastructure delays or costs
- Market volatility
To mitigate these risks, conduct thorough due diligence and work with experienced private lenders familiar with Georgia land loans.
Get Expert Advice
Private lending for land in Georgia is a practical solution for investors who understand the market and have a clear exit strategy. Hard money loans provide speed and flexibility, especially when purchasing raw or vacant land that banks typically avoid.
To move forward quickly, apply online now and get pre-qualified with Hard Money Georgia, your local expert in private land financing.