Financing land

[Shannonbeth]

Okay, so we are obviously looking at land but no intentions of doing anything with it till we can get into the class. I just had a question. If we found what we were looking for at a price we liked what kind of loan would we want to purchase the land while we save up money to get to the class and for materials to build our home. Since we have no intentions of building any time in the near future what loan would we go with?

LOT LAND LOANS
Lot Land Loans are designed as purchase money loans for those borrowers who aren’t ready to begin construction at this time, and as such are not ready to obtain a construction loan, but will be ready in the near future. The lot must be normal for the area and at least one utility must be available from the street. (Septic tanks or propane tanks are acceptable if these features are normal for the neighborhood.)

LAND PURCHASE LOANS
A Land Purchase Loan can provide the funding you need to purchase the ideal land to build your dream home! It can help you pay for land before you start building on it. Depending on your needs, you can choose to fully amortize your payments, or pay interest only for the majority of the term, to keep your payments lower.

[ChainsawGrandpa]

If there is any way possible, I would like to discourage you from getting a loan on land.

* It's a buyers paradise on land. We are no where near the bottom yet.

*I never found good deals on land until after I took the class. I can't explain that. Maybe the class gave me a new way of thinking... I don't know. My first piece of land after the class was (about) $747. Yes, that's the total cost, yes, it was very, very nice, and yes, it was fee simple. I know of several pieces of land right now that are fantastic deals. Just wait, the prices will get much better. I know of a piece of land right now that is about $12,000, and it is very nice.

*"Never catch a falling knife." There's a lot of wisdom in those words. The market is falling and yes, you will get cut. Wait 'till the prices are on the floor before you decide to pick up a (knife) piece of real estate.

*When I took the class there were ways to get land cheap, or even free. That was then. The opportunities are much better now.

Forget about spending $200,000 for 80 acres of old growth trees, and four season streams of glacier pure water. That dream property could be yours for assuming the payments, managing the property, or a short sale.

The prices are going down. Don't buy this year at foreclosure. Wait until next year and buy at a tax sale.

Save, save, save, and don't buy anything until after the class, and it is best to pay cash, or do a trade, and it shouldn't take too much cash.

Todays good deal on that dream property may be tomorrow's nightmare. Don't pressure yourself into a piece of land.

Once in a lifetime deals happen every other day if you're looking for them. Just be patient and wait.


G'pa

[edkemper]

I'd like to disagree with one thing. CASH. When you have money in your pocket the deals seem to come out of the woodwork.

[ChainsawGrandpa]

That's true.
When you have cash people can smell it and they come a lookin' to make you a great deal on their land.

G'pa

[hammerhead 67]

If you cant afford the land, the build, or the class, you aren't ready to buy.

Save up and take the class. It will open your eyes to a world of possibilities as Gpa suggests.

You will learn WHAT to buy, and HOW to buy from the people on the members side.

Its really more of a mind set than a technique really. Once you get your brain wrapped around working with cash, buying super cheap, and building a beautiful quality home for a fraction of retail, you will start to "discover" sweet deals on land. Then you will be ready for the next step.... MAKING a great deal.

Most great deals are not found, they are made through solving other peoples problems while satisfying your needs at the same time.

[rreidnauer]

I know it's hard for some folks to come up with cash, but I gotta say, when you REALLY want to build up cash, it's amazing how quick one can seem to come up with it. (by cutting other expenses) I had to come up with 7k for my land in a little over a month. I opened a line of credit at my bank because I didn't think I could pull it off, but I did with an extra $500 to spare. Mind you, I put myself on a financial crash diet, but I was able to pull it off.

Sent from my BlackBerry 8530 using Tapatalk

[loghousenut]

Talk about a pile of GREAT advice! They are all sssoooooooo right.

Sent from my T-Mobile myTouch 3G Slide using Tapatalk

[Shannonbeth]

I have some money saved and I will continue saving for the class. Thanks for all your advice, I will just wait on land.

[LogLover]

Hi Shannon - long time no see or talk. Glad you still out there. :)
Lots of sound advice above but I think much may also depend on locale and markets. If you are still looking in general area(s) closer in to the TC's what I've been seeing is the prices have stabilized and starting that dang creep back up and have been for last year. Outside the "radius" we talked about before --- they continue to fall a bit. A good friend bought 60 acres near Watertown with older farm buildings and house for $92K this past week. The seller had paid $375K in 2005. OUCH.
Seems there remains a load of $$$$$ in the hands of those that want to build close in and the demand is rising again.....location locastion location.

Show me the lot I want and I'd be hard pressed to pass on it if it's w/i 30 miles of the west side of metro anyway. It's probably not getting any cheaper as it was loooooow 3 years back.
That said - if you can stretch that radius and willing to wait I bet the days ahead will see lower prices. That magical mythical willing to drive daily to work thing is big mental block for many in metro.
Land contracts starting to become more the norm again - I sure wouldn't hestitate to buy if all fits your dream .... AND budget.
BTW - How is that family of yours? Hope the storms been staying to south of you. Good to see you back!

[Shannonbeth]

You make a valid point too LogLover. I have been watching land prices for over a year now and in the TC area as well as other areas around there they do seem to have stabilized and some have creeped back up. I only want 5 to 10 acres, I am not looking to farm so no need for more than that.

My family is good, pregnant with baby number 7 so you can see why I am considering financing the land and having it paid off before we build. LOL.

I hope all is well on your end as well.

[panderson03]

Hi ShannonBeth. welcome back:) how have you been?

[Shannonbeth]

Ty Panderson03. I've been good, just busy. How have you been? How' s your home coming along?

[Peach1956]

Perhaps I'm wrong, but I'm under the impression that any land that is bought from a tax sale, the new owner is responsible for paying any/all liens attached to the property. ... it may not be such a good bargain. Particularly if the lien was nailed by the IRS. :mad:

[panderson03]

Ty Panderson03. I've been good, just busy. How have you been? How' s your home coming along? Hi there ShannonBeth. the build's coming along nicely. we got the garage under roof last building season and intend to stack the logs on the cabin this year:). I'm glad your log home dreams still alive! we've missed you on the forums!

[Shannonbeth]

It is well alive and now I have my hubby on my side so it's much easier. Now it's just to get to the class and get going! Do you have recent pics posted on a blog or website?

[fishlkmich]

I believe that if you have a loan on land that you cannot log any of it. Folks were buying property, cutting it for timber and defaulting on the loan. I'm sure that there are ways around this, but thought it was worth mentioning.

[Tom Featherstone]

It is well alive and now I have my hubby on my side so it's much easier. Now it's just to get to the class and get going! Do you have recent pics posted on a blog or website?

We'll "Ditto" Panderson's comments Welcome Back! Somehow, someway... get you & your hubby to the next available class. You've been here long enough that we don't have to sell you about the class but I believe that you would move leaps & bounds forward after attending and all this other stuff you're thinking about would all fall in line for you. It's usually not a good idea to put the "cart before the horse" although life at times seems like we're just sitting there waiting for that horse to push from behind... nudge.. nudge....

You can't go back in time, but if I could and I had found the LHBA 20yrs ago I think I would have followed like others here and on going like the "Blane family" and the wonderful opportunity to build your place with your family.

Our Dream started over 34yrs ago and even though our place is yet to be built a good portion of the entire dream has unfolded and has gone way beyond what we first thought possible. We now live where we are going to build for the last year and a half. Our well is in and we now have water hooked up to our trailer. Linda wanted her sauna done before we build and hopefully we'll be sitting in it in less than a month from now and when we do build it will pay great dividends to daily healing.

Part of the Dream is in the journey and learning to enjoy and love the Blessings along the way. If we only knew what Blessings He has in store for us all!

I hope to see you on the Members side sometime soon!

Tom

[hammerhead 67]

Perhaps I'm wrong, but I'm under the impression that any land that is bought from a tax sale, the new owner is responsible for paying any/all liens attached to the property. ... it may not be such a good bargain. Particularly if the lien was nailed by the IRS. :mad:

And the answer is.... It depends.
A quick title search will turn up most defects. Fork out for a full title search executed the day of the tax sale if there is any question about liens.

We have been buying foreclosed houses and fixing them up for resale. Most have liens far above their value so we let the foreclosure wipe them out, then pick them up for a bargain a couple months later with a clear title.

[ChainsawGrandpa]

I was talking to a young (very, very young) couple yesterday. The wife had fallen in love
with a piece of land near some water, and had a house, and maybe some out buildings.
"They only want $550 a month, and we won't be renting!" I had to sympathize with her
but when I read her an excerpt from an article by Doug Casey her excitement wasn't
diminished it just changed directions. Just wait a little longer. You won't need to buy at
a reduced retail price with owner contract, or out of REO from a bank. You can buy at a
tax sale for pennies on the dollar. Yes, it really, really will get that bad.

Don't be in a hurry, and do the first things first, and the first thing is the class. It will change
your mindset drastically, and save you a lot of back tracking.

Does this mean it's the wrong economic climate to build a log home?
Does this mean you will never see the log home you always wanted?
Does the current financial climate mean your dreams will never happen?

NO! Not at all, in fact, building a log home is now one of the few viable
routes for a cheap roof over your head (managing a farm - homestead for
an off-site owner, third party agreements, REO on-site management,
building a (Skip's Redmond style) log home). Don't run in and do the wrong
things. That is just too expensive, and a person with cash calls the shots.

Right now times are tough, and they will get much tougher. A co-worker was
in tears over his job. He's not being fired, just "right-sized". People are in a
panic, and wondering what will happen next. I see this as a huge opportunity.
It was too hard to do anything in a good economy (although I did do well) but
now the opportunities are just springing out of the wood-work. These terrible
economic times are a golden opportunity, but it's an opportunity for those with:

*Cash
*Knowledge
*Wisdom
*Patience

If you possess those four things you are holding a royal flush, just keep-up a poker face.
Patience, my friend, much, much patience.


If I could add anything to what Doug Casey says it could only be, "Amen! preach it brother!"

G'pa


Here's the quote from Doug Casey:


"It’s too early to buy real estate right now, although a fixed-rate mortgage could go a long way
toward offsetting bad timing. It would let you make your money on the depreciation of the
mortgage, as opposed to the appreciation of the asset. Still, I wouldn’t touch housing with a 10-
foot pole – there’s been immense overbuilding, immense inventory. And people forget: a house
isn’t an investment, it’s a consumer good. It’s like a toothbrush, suit of clothes, or a car; it just
lasts a little bit longer. An investment – say, a factory – can create new wealth. Houses are
strictly expense items. Forget about buying the things for the unpaid mortgage; before this is
over, you’ll buy them for back taxes. But then you’ll have to figure out how to pay the utilities
and maintenance. The housing bear market has a long way to run."

[happyquilter]

Shannon, I definitely agree with the members who are counseling you to take the class before all else. My husband and I had looked at land for a year before taking the class. We came out of the class with a totally different mind set as to what we wanted, and it really paid off.

We are totally debt free and plan to stay that way. In my opinion, debt is evil, no matter how you try to justify it. Living totally debt free is the most liberating and empowering feeling on earth, and the high does not go away! I would suggest visiting some frugal living websites and get creative about saving every penny you can. It can be a really fun creative challenge for the family to watch that savings account grow to meet each financial goal along the way.

Best wishes to you and your family!

Shari

[loghousenut]

The borrower becomes slave to the lender.

[Gomer]

Tons of insight here and it's no doubt good.
That stated - I bought a parcel recently and passed on another close by it. Wanted both but didn't want to much debt.
Around here the land values are started to rise, actually faster than I want as I pay taxes at higher rate then too.
So on Friday I get a call - the parcel I passed on sold for $37K above the price I passed on. And was I interested in selling mine - 2 people interested, one willing to cash out a PLUS $26.5K to me - not a bad payback for having only $5K tied up as my downpayment for less than a simple season in the air! Ok - I paid closing costs so I need $24,780. Yeah - we sold it. Signed a PA on Saturday.
Now the question - did we make the right move? We hope so but will be forced to maybe expand the area to live in. It was 98% of all we dreamed of in a lot....so maybe we screwed up and screwed ourselves too. Time will tell but I indeed have seller's remorse right now as it seems the recovery is real, solid and happening around us. Your mileage may and will vary but I will say you may be forced to look farther, wait longer and may not ever find what you truly want at that.

So the search begins anew and as Tom or someone above said - you cannot replace time and we are getting older. I spent all day at cemetaries yesterday paying my respect to family who have let us and when I think how fast health can change or an accident can change it all I know I am not willing to waste much more. I am here and reasonably healthy today and if I wait and wait I may not be.
No disrespect meant but there indeed are 2 sides to this time frame and balance of debt vs time to enjoy. I remember that member who died doing what he loved and reading about Rachael's loss. I don't want to extend things any longer than need be.

[loghousenut]

Gomer, Gomer, Gomer,,,

If you could only glimpse the members side just once, you'd see that big hole right in the middle of it that is such a peculiar shape that it looks like it'll fit only YOU!

Of course you did the right thing. You moved forward. Look around you and watch how miserable those folks are who are always living in the past as though it were a mistake. They snivel and whine about profit that coulda been, love that shoulda been, and all the wrong turns that they were talked into making. It's done. Pretend it worked out great and put it behind you where it won't cause any lost sleep. Personally I think you did do the smart thing.

I was 22 years old when I passed up my first $600 piece of land. I was 39 when I finally bought my first piece. Who cares? I kinda wished I woulda spent more money on land and less money on all that other stuff but, then again, I enjoyed every minute.

Now's the time to try to NOT toss the profit in the wrong spot and get on with the next 60 years (you know I'm gonna say take the class, haha). More than a few LHBA members have looked for land that was totally different from their pre-LHBA notions. There'll always be land.

You did another right thing. You honored lost family by learning from their passing. You spent a day getting in touch with your own mortality, viewing the impending end of your life on Earth and all of its finality. The day after you die you won't care much about any of this, but wouldn't it be nice to be alive and looking back at the next ten years and say to yourself "Well GOOoooOOOlllly... That worked out kinda cool didn't it??!!!".





PS... Gomer humor. I couldn't resist.

[Gomer]

I get ya .... but then again you don't really know me and my circumstances I guess. I'm battling a deal with prostate cancer (S-3) so my time frame and wants are in the next 10-15 years vs having the larger window you reference. And I suspect some others who've been around this site may have somewhat similar circumstances or their significant other may have or a family member.

Spent another 3 hours earlier today in TC's at Ft Snelling National Cemetary which has been tradition for 30 plus years. Lost 5 of our circle of friends from the Memorial Day group since last year - the group was 14. Got smaller way to fast. From maybe 25-27 10 years ago to 9 today. Scares us a bit. The cycle of life is short isn't it!

Left there, looked at my soul mate and she said we gotta get things done. Yep - that said it right there.

Leaving Tuesday to start the hunt - again - and suspect regardless of cost we come back with a deal in hand. Again. I now have a few extra bucks of course - just hope I can make it work.
So = guess I will see if I can get a class in, assuming they offer again this summer/fall, and get it done. If we hire out more than we wanted to originally it really won't matter to either of us I suspect. Time does equal money. Time also equals enjoying life.

We made the decision today and now its time to move on and gallop ahead

BTW - I had to resurrect the Gomer .... that dude brought me laughter at a time a lot of the world didn't. Still workd for me everytime I log in. :p

[loghousenut]

Gomer,

You have no idea how well I really do know you. We all have our demons to fight. My first cancer scare happened the year I first took the class from Skip (1981). Since then I have lived a lot and had the privilege to survive what I knew was certain death twice.

Last week I had a mole removed that appeared and grew to 1/4" in 6 days. I haven't had the lab call yet. It'll be fine. Chances are good that there is some healthy young Buck reading this that will die, without a chance to say goodbye, before you and I do.

One thing for sure... You'll leave a legacy whether you like it or not. Some folks like to leave a nice shiny legacy with a pretty little mortgage attached and some folks like to leave a wrinkled, dirty, and mostly done, though completely paid for, legacy. We all choose whether we choose or not.

Me... I don't care if the house ever gets done. I like what it has done for the Family. My Son has grown up more during this project than that other Gomer Pyle ever did in the Marine Corps.

http://i157.photobucket.com/albums/t55/loghousenut/gomer.jpg

PS... Vegas would be a great place for a wedding.

[edkemper]

That is unfair. Gomer learnt a bunch in the Marines. It showed in almost everything he did on his property. One of his pick-ups was made out of an old station wagon he cut up. But that story is for another time.

[Tom Featherstone]

Gomer,

Good luck to you on your land search. I've got a feeling there's a special place just waiting for you to find it. I also agree that we should focus more on Now. Nobody is guaranteed a tomorrow no more than we can go back and change anything in the past. Waiting to live a life someday rarely works. I've seen to many work their entire life to reach those "golden years" to have it never occur.

I know well of the "mantra" of "mortgage free" here of which I mostly agree. Everyone here has to make that call for themselves based upon our current life calls or sometimes what life deals to us. I tell my own kids to balance their life's and to live it now because this moment is what is most important. I have many friends that have worked their entire lives, mortgage payed off, large bank accounts, failing health and now wishing that they would have lived life while it occurred, there are no "do overs". It doesn't matter if you have a mortgage when your dead there's mortgage insurance to cover that to not burden the family later.

The LHBA way of building a home gives a person the ability to build a place "mortgage free". A substantial home that will out last anything currently conventionally built if that matters. More important is what "things" are important. Living life now, this moment, is all we really have control over. imho

Thank you Gomer and to your friends that served us. Go find your place and enjoy every moment of it!

Best Wishes!

Tom

[FishingAddict]

If the right spot that one loves is there - buy it.
If the opportunity is there and right - take it
I totally subscribe to the if ya snooze ya lose religion. Seen to many lose out

You may win sometimes by playing a waiting game but you'll likely lose on just as many and sometimes ____ you don't get a second chance at things :(
Life is to short and to precious to not run with it to the fullest level you can
Cheers and go fishin' ya'll ;):D