Purchasing land

[Homesteaders]

Long story short: We are a couple that has been reading a lot about the Log Home Builders Association and will soon be relocating south. We're interested in learning more about building our own log home, especially because we don't make enough to buy a home. We want to do everything we can to live on what we make and be as self-sufficient as possible.

Land prices where we're going are not outrageous (yet), and we could afford the monthly payments on a spot that would fit our needs; but we struggle where the down payment is concerned. We read that land mortgages have higher interest rates and require hefty down payments of 20-50 percent. And we don't make enough to buy land outright.

Does anyone have any ideas how we can deal with the down payment situation?

[dave]

1. owner
2. financing
3. :)

[kyle]

Yep, thats it, OWNER FINANCING.

As for land its the best way to go. But obviously you have to find the right person that is willing. They are out there, just have to look.

[ChainsawGrandpa]

You didn't mention your location, but there is an auction in
Washington State. The land ranges from decent to worthless.
Takes a little homework. I found some truly worthless land
for about $50,000 a year ago. Through a realtor I was able
to find one of the best pieces of land I have ever seen. Same
general area, but 1/2 the price of the swamp at the bottom
of a cliff.

It takes vigilance. Practice your negotiating skills, be
willing to live in an area you may not have considered.
Some states have free land, would you move if it were
free? I have found decent land (buildable with water,
power, etc.) for less than $1,000. Nearby was a nicer
piece I passed on (I own too much property already!)
that was $3,000. Right next door were two more lots
for $11,00 for the pair. Each of these should have been
$20,000- $30,000. Sometimes people are desperate
"don't wanters". Sometimes they just don't care.

I have done my homework and recently found 30 nice
pieces of land. I don't need any more property but if
the price is right I can always sell at a healthy profit.
Of those 30, 5 were down-right desireable. Yeah, I
would move there in a heart-beat. Of course, all look
to be well below FMV (fair market value).
The rule of thumb I apply to EVERYTHING (NO exceptions)
is 17%. If I need it, and have a ready use for it, then
I really don't want to spend more than 17% of retail.
By "no exceptions", I mean I always apply the rule when
looking, I don't always meet my goal, and I have been
known to pay retail, but 17% is the target that came from
research. Just bought a kayak. $1,700 retail, new. I
bought it used for $200. Diesel for the car, sandpaper,
paint, decals, and the ad to sell it brought the total to $235.
I'll use it and have a lot of fun. When it sells I'll make a
nice profit. Just got some foam insulation to do about 1/3
of my floor. Free except for the diesel to go and get it.

Guess what I am saying is first be ready, then watch, watch,
watch! One of my favorite saying is: "If you're watching,
Once-in-a-lifetime deals come along every other day...and
every several weeks if you're not watching".

-Rick

[Homesteaders]

Thank you very much for your replies. Keep 'em coming!

If you could describe owner financing in a little more detail, we'd be obliged.

We wish we could be less selective and move anywhere, but we're not in that position. We are moving out of state because there's no opportunities where we live to change jobs in our line of work or to simply move up at the jobs we have. We have to go where the jobs are.

[Ellsworth]

Thank you very much for your replies. Keep 'em coming!

If you could describe owner financing in a little more detail, we'd be obliged.

We wish we could be less selective and move anywhere, but we're not in that position. We are moving out of state because there's no opportunities where we live to change jobs in our line of work or to simply move up at the jobs we have. We have to go where the jobs are.

You might want to buy the book 'Finding & Buying Your Place in the Country' by Les and Carol Scher. That book contains tons of info on what to look for when purchasing property, explains owner finance, has checklists and tons of great hints and tips on how to find and buy property. It also shows you what to watch out for in regards to such things as easements, water and mineral rights, covenants, etc.

We have it listed on our website under stuff we recommend (http://www.loghomebuilders.org/log-homes-stuff-we-recommend.htm) if you want more info about the book.

[HITmanMikie]

I attended last week's most excellent class taught by Ellsworth & Steve White. I live in the Washington, D.C. metro area, so land isn't exactly cheap or even reasonable around here. I asked my realtor to put together an offer for a property that I couldn't come close to affording - I am offering to pay $50K (a little more than 10% of the asking price) plus build a 3000+ sq ft. log home for the owner (on separate property, of course) within the next two years. They will be able to sell that house for more than they were asking for the land.

Michael Harris

[wood bug]

I haved found that even owner finance will have a down payment at least 10% and usually with a higher interest rate. than a conventional loan, improved land has usually lower down payment requirement around 20% and was running in the 8% interest range last month, if you can go va thats a decent deal 3% down and a bunch of paper work, If you find a bank and get qualified, or find out what they'll give you, then you know what to look for they or another agency may have repo land they want to dump, auctions can be god but usually require a cash buy but at a good deal.

good luck