“We need to be able to prep people accordingly for those balloons or for those variable rate increases on their interest rates,” DePaolo added. Upfront costs for land can be similar to, or lower than, those for a standard home purchase, but construction costs can increase substantially. Additionally, some clients might qualify for the land purchase but not the construction, necessitating careful discussions about long-term goals.
“What are their long-term goals? And although they can buy the land, can they also build on it later?” asked DePaolo. “Taking into consideration wells, and electricity, septic systems, and if those were already present on the land itself, because if they’re not those can be very costly.”
Due diligence is key
Speaking to MPA, DePaolo recounted instances where clients had to go off-grid or adopt alternative water systems due to unforeseen difficulties, underscoring the need for thorough due diligence. And, when asked whether her work mainly involves single parcels of land for individual homeowners or larger parcels for developers, DePaolo reveals they actually do both.
“My team and I focus on one parcel of land or multiple parcels of land multifamily,” she said. “We’ve had people looking at land and they wanted to build the home, and then potentially a commercial restaurant down the road. So we’ve had a lot of different options for people and I’ve addressed all of it.”
With a broad perspective across diverse real estate markets, DePaolo notes regional variations in borrower needs.
Source: mpamag.com