How to Purchase Land Loans

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Land loans offer the opportunity for long-term financial gains.
Land loans offer the opportunity for long-term financial gains. (Image: Thomas Northcut/Photodisc/Getty Images)

Land loans accrue interest. Buying land loans and becoming the recipient of those interest payments offers you the opportunity to make slow, long-term financial gains. Purchasing land loans also involves a bit of risk. The buyer may default or refinance with another lender, leaving you with a loss. A strong contract drafted by an attorney will protect you as much as possible in this situation. But investing is risky, whether it involves volatile stocks or seemingly stable land loans.

Search through physical and online newspaper clippings for foreclosure notices. Your county government and local banks may also publish upcoming foreclosures online. Make note of the properties that interest you the most.

Go to the county clerk's office in the jurisdiction of each property you wish to purchase. Find out who the lien holders are for each property by searching through the physical county records. Learn who the buyers of each property are as well.

Contact the buyers and offer to refinance their land. Meet with them and have them sign a contract that your attorney has drafted. Be sure that the buyer knows that this contract is valid as soon as you have purchased the loan and it is not valid otherwise.

Contact the lien holder or holders for each piece of land. Offer to purchase the loans for the foreclosure price or lower. Take your time and negotiate to get the best possible price. Sign contracts and make the purchases. Notify the county clerk's office of the transaction in writing.

Contact the buyer via certified mail. Tell them of the purchase and notify them that their first payment is due as per the contract you signed with them. Collect your payments from each buyer monthly and sign over the deeds once the loans have been paid in full.

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