The first decade of the 21st century experienced a heavy influx of land development and construction projects in the US. And the number has only increased over the years. Both small and large enterprises have taken extra steps to ensure they stand out in this aspect.
However, acquiring land for development wasn’t as easy as it is today, thanks to private money lenders such as GCP Fund. The rise in engineering, petroleum, construction, and industrial development as resulted in increased investment in land development projects.
These land development projects not only contribute to higher profits, but they also impact the overall IRR, company competitiveness, compliance, and business partnerships. Moreover, it’s important to have adequate funding to ensure your business land acquisition goes smoothly.
In this article, we’ve highlighted all the potential problems that might arise when applying for a land acquisition loan in Nashville.
Not Understanding the Principles
Acquiring a piece of land for development isn’t as easy as it may seem. It includes a wide range of rules, regulations, and ownership principles that you need to take into account. Firstly, it’s important to identify the purpose of land acquisition. If you’re acquiring land to develop a business property such as a warehouse, a factory, or a logistics center, make sure the construction is in line with the zonal codes.
Moreover, it’s important to identify the three individuals that impact the acquisition agreement and consequently, the financing application.
- The person who has the legal ownership of the land
- The person who might have a partial ownership of the land
- Any entity that might have claimed the land in the past due to an ownership or development conflict
Identifying these parties will help you steer clear of any legal issues that might surface later on after acquiring land. You’ll also be able to minimize unwanted legal costs when working on a development project.
Not Getting All the Required Permits
If you’re buying land for business development, it’s important to avail all kind of legal permits and approvals on it. This ensures the legality of your project and keeps your business safe from unforeseen claims and registration hassles. Moreover, thorough preparation also speeds up the land acquisition loan process and sometimes, even grants you fast, relevant council approvals.
Not Thinking About Future Business Projections
Before taking a big step such as acquiring land for development, always conduct a detailed business projection. Understand your business’s current financial standing and potential future growth.
A good idea is to consult your private money lender and ask them about the different repayment, negotiation, and settlement options.
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