Graphic of a yellowish-red dollar sign propping up a green houseSimple answer is, sometimes. Even within a region, overall demand and thus perception of desirability can vary considerably. Lenders are looking at the risk and each deal is being evaluated based on its merits.  The conventional lenders, banks, savings and loans and similar institutions may slow their funding of the more speculative projects. However private lenders do make loans on land, under certain constraints. They will usually loan on land that is intended for early development and will limit the term from a minimum of one year to a maximum of three years.

Many lenders are concerned about the flow of capital into real estate development, noting that more money is chasing fewer good deals. With the turndown in home sales, overbuilding sectors of the commercial market this has reaffirmed the cyclical nature of real estate. With the real estate recovery underway, opportunities may be returning, but it is not uniform even within regions. Here are some of the considerations for this type of loan:

  • Loan to Value Ratio. First mortgage land loans may be made for up to 50 percent of the value of the property as determined by an independent appraisal.
  • If the borrower can put up additional collateral, the loan-to-value ratio might be increased by an additional corresponding amount. Where an existing first mortgage already exists, some lenders will consider taking a junior position, but the total of both loans will not usually exceed 50% of total value.
  • Interest Rate. The interest rate on this type of loan will be high. Sometimes state usury laws applicable to individual borrowers can be violated. The borrower must be incorporated in this case. See attorney for assistance.
  • Amortization. Typically, vacant land will produce no cash flow, so amortization is not required.
  • Release Price. The owner of the land is commonly given the right to obtain the release of a portion of the premises from the mortgage lien (so it can be developed and sold) on payment of a larger-than-pro-rata portion of the loan, e.g. 125 percent or more of the ratio of the value of the released premises to that of the whole parcel. This is a form of amortization and increases the security on the remaining portion of the land.
  • Personal Guaranty. This can be required, depending on the transaction.
  • Developer’s Strength. The experience, reputation, background and financial stability of the M​​developer is very important. A developer with a history of success in this type of project will go far in justifying the requested loan.
  • Demand. Existing demand for the planned development must be proved. This may require a market analysis by outside experts.
  • Type of Improvement. A “location-oriented business” such as a bowling alley, motel or restaurant may not qualify the land for a loan, whereas an apartment or office building may do so because of the stability of the rental income once the building is completed.

John James Roedig

With 30 years of financial and management experience, John is Co-owner of McSherry Property Management and Co-Founder of Roedig Vesco Commercial Real Estate. John sets the overall corporate direction for both companies and is responsible for the administrative affairs. He is also the president and owner of Valley Holding Group, Inc. a multi-family asset owner. John Is a member of NARPM, IREM and National Association of Realtors.

Prior To John’s career in Property Management and Commercial Brokerage John held senior management positions in the cogeneration & independent power industries.

John grew up in Huntingdon Valley, PA, and LBI, NJ. He now splits his time in PA and in South Florida.

John has a BS degree in Accounting & Finance from LaSalle University and also holds an MBA From LaSalle University

Joe Vescovich

As a longtime resident of the Philadelphia metro area, Joe understands the numerous intangible benefits of life and opportunities within Philadelphia and surrounding areas. After graduating from Penn State, Joe and his family moved back to the area and he has extensive experience within the commercial and residential appraisal fields. Through this extensive background within the local area and regional market, Joe has a strong understanding of the dynamics within the various communities of this area.

Connected to the community through volunteer and board membership, Joe has additional insight into local zoning, as a member of the Cheltenham Twp. Zoning Board and other nonprofit organizations. Joe’s contacts and lifelong residency leverage his energy and enthusiasm.

Education includes degrees’ in Construction Engineer (Spring Garden College), and Operations Management (Penn State). Professional designations include those in the appraisal sector. Joe has been involved in professional podium speaking/training, and teaching activities. Joe has authored and taught multiple 30 hour and full day Certification and Broker programs at The Pennsylvania State University, Polley Associates, Appraisal Institute, and Northeast Board of Realtors. Other professional commitments have included several national and local professional committees with the Appraisal Institute, International Right-of-Way Assoc. and Appraisal groups.

When not assisting clients, Joe enjoys spending times time in the art world. He is interested in the visual arts. Trained as a woodworker, this creativity component extends into the business arena and beyond.

Fill Out the Form Below for More Information

  • This field is for validation purposes and should be left unchanged.

Call us at (215) 867-6595 during business hours.

We guarantee that a team member will be on the other end to answer any questions you may have.

Application Guidelines

Nancy Lewis
Director of Leasing

Nancy Lewis has over 20 years of experience in customer service and account management. She previously worked in the new build construction field. She recently joined the team at McSherry Property Management as the Director of Leasing. Some of her current duties include meeting with future tenants, showing rental properties and creating leases, as well as handling client concerns. She is also given the opportunity to create new policies and procedures to help the business grow. The entire team at McSherry Property Management is very respectful, open to new ideas, and work in a positive environment while expanding their business and remaining innovative as they proceed. Nancy enjoys the close relationships built between coworkers and management. She is extremely grateful for the opportunity to be part of the team and to work with all of McSherry Property Management’s clients.

MaryEllen Meehan

MaryEllen has been a member of the JG McSherry team for over 40 years. Her experience crosses over many aspects of the real estate business including title insurance, property casualty insurance, condominium, conversions, sales and property management. Her current duties are more in an assisting capacity in any of our departments at this time. She is very proud to be associated with a firm that has consistently exhibited integrity, responsibility and professionalism over the decades

Fill Out the Form Below for More Information

  • This field is for validation purposes and should be left unchanged.