Purchasing land.

Started by Curtis, December 28, 2008, 11:28:21 PM

Previous topic - Next topic

0 Members and 1 Guest are viewing this topic.

Curtis

I've been looking at these two pieces of land here locally to build a small underground home. There are two 4.5 acre parcels in the country for sale, both listed at $18,500 each.

One parcel has a unlivable trailler on it, and the other parcel has two. Thats why the land is as cheap as it is. Water, electric are for sure on both parcels, and the listing leaves septic questionable. But I would imagine it is there,

http://www.scottlynchrealty.com/bin/web/real_estate/AR151403/ACTIVATE_FRAMES/LOTS_AND_LAND/Madison/1226438257.html
http://www.scottlynchrealty.com/bin/web/real_estate/AR151403/ACTIVATE_FRAMES/LOTS_AND_LAND/Madison/1226438257.html

I plan on checking out the land soon, I could fix one of the trailers up and live there as I work on the underground home.

I'm twenty, so i'm new to all of this. What would be a good percentage to put down on land? Nine acres for $37,000 seems like a good deal compared to other land I have seen. It already has utilities and driveways, and no neighbors within visual distance. Its not the southern facing hillside that i'm looking for, but I can make do.

Any words of advice? I want to schedule an appointment to check out the land in person, any things I should look for when checking out the land? I plan on salvaging parts from the trailers that I could use, like windows and whatnot, and good piping or anything that works really. When my home is complete, I will have the trailers removed.

What are the odds of a twenty year old getting a bank loan for this?
-Curtis

diyfrank

You could see if the owner will carry the contract.
If so, just guesting here, He would probably want  15 or 20% down.

Probably not. It's listed through a Realtor.

The bank I would say won't want any of it.  with junk trailers and maybe no septic.
On a land Mobile package deal maybe, but these are tough times and you're in your 20s.

Sorry dude.. My guess is there looking for cash.

The owners may work with you. Try a phone call.

Good luck with it.

 
Home is where you make it


glenn kangiser

Best you can do is talk to them.  The financial system is pretty wasted right now..
"Always work from the general to the specific." J. Raabe

Glenn's Underground Cabin  http://countryplans.com/smf/index.php?topic=151.0

Please put your area in your sig line so we can assist with location specific answers.

rwanders

Banks and credit unions virtually never finance raw land---old trailers will probably not help. Almost all land is sold for cash or the seller accepts a down payment and carries the rest as a note or contract with the land as collateral. Make an offer, negotiate and hope for the best.
Rwanders lived in Southcentral Alaska since 1967
Now lives in St Augustine, Florida

wildbil

I was 22 when I bought my first home 1 1/2 years ago. I looked at similar places, and yes it is possible. If one of those trailers happens to be livable it would be easier, 37,000 isnt that big of a mortgage to the banks. You will most likely need 15% down though. The kind of first time buyer loan I got, I had to do several repairs and upgrades to the home before I moved in from money out of my pocket, then they tried to deny me the loan, then it took 4 months to get through all the paper work. 1 1/2 years later I'm trying to get rid of my house and build something without a mortgage. I've learned from so many mistakes already I could be a professor d* d* d* d*.
"A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine."
-Thomas Jefferson


Mike 870

As far as the septic goes, I would say you need to expect it to be unusable.  Chances are it's backed up and failed.  Unknown is realtor speak for "it's broken, we just don't want to list it that way".


Squirl

Yeah, you are looking at a bit of trouble for a loan.  The best thing you can do is try.  I had been working since I was 14 and had built up pretty good credit by the time I was 20.  A friend of mine did the same but dealt mostly in cash but had many other assets to borrow against or sell when he was 20.  (cars, motorcycles, jeep.)  It depends on your income, assets and credit.  I would not expect anything less than 20% down, but more likely 50% if you can get anything.  What is working in your favor is that the land is not raw and has improvements.  Maybe if you can find a fully depreciated trailer for 2-3 grand and park it there, you might get the deal going.  Banks don't prefer to lend on trailers in the first place.  It is like a car loan to them.  The trailer depreciates quickly and can be moved off the land.  Their equity can disappear overnight.  Since most banks aren't projecting large development contracts, they aren't expecting the land market to pick up pace.

Remember 18,500 is the asking price.  This has only been on the market since October 21, 2008.  That is pretty short and they may not be willing to budge much, but you should always check.  You don't know the situation.  Check who currently owns it.  Try and do as much background research into them as you can.  To be on the safe side add $4000 for the septic and $3000 for a livable trailer.  Don't forget the closing costs, legal fees, and taxes. 

CREATIVE1

Financing also depends on the age of the trailer.  More than about twenty years old, you have a problem no matter what the condition.

Land can be financed, but usually you're looking at 40% down.  The owner can take back a second mortgage, however, for less cash down.

When you negotiate, if the terms make or break the sale, as in your case, you may not be able to be quite as aggressive in negotiating the price. 

Native_NM

If you purchase one piece, put a brand new trailer (say $50K), add in the new septic, etc., you could finance the whole think for less than $600 a month for 20 years.  Not a bad start.  After that, slowly start to build your home.  Trailers don't last for ever.  Ask about an option on the other piece of land also.
New Mexico.  Better than regular Mexico.


NM_Shooter

you probably won't be able to, nor would you want to use any of the stuff from the trailers for your house.  The windows are almost guaranteed to be single pane, aluminum frame windows.  Building a house and installing these would make headaches for you for years to come. 

Regarding the septic, the tank installation is the hard part.  When systems fail, the leach field fails, not the tank.  Many municipalities will allow you to dig and install a new system.  Typical costs if you have a new field put in are $2k to $3k here in NM, depending on the size of the field. 

You could rent a backhoe, buy an effluent filter, drain pipe and gravel and do the whole thing yourself for less than $700.  I would almost view a failed septic tank as a benefit, as it might allow for more negotiation on your end.

But.....

Don't be in too much of a hurry.  You'll be on this land for quite awhile, right?  Get what you think will make you happy.  With the depressed economy, more property will be coming available and prices will be coming down.  Wait just a bit, and you may find that south facing hillside.  If you are anxious to get started and this land will work, then what the heck... start with a lowball offer. 


"Officium Vacuus Auctorita"

cfabien

Check into farm credit lenders in your area. Around here we have a company called Greenstone Farm Credit Services (greenstonefcs.com) who at least as of early 2008 would lend on land with no regard for improvements with 5% down at reasonable interest rates. If you are in a rural area there may be a similar lender nearby.

devildog

its hard to get loans on land without great credit and/ or collateral. this may not be every state, but no bank that I know of in florida will loan money on mobile homes over 8 yrs old. and the mobile home has to have a title. Like the others said make a call, with the market as it is financing someone is better than no sale. Darrell
Some people spend an entire lifetime wondering if they made a difference in the world. But, the Marines don't have that problem.
Ronald Reagan, President of the United States; 1985

considerations

Persistence, persistence, persistence.

You may have a county website that will display property tax info and sales history and zoning and other info that can help you make a decision. 

Sometimes the sales history will display a pattern that can show you whether or not the seller might be motivated to make a deal.

If the property taxes are listed as unpaid, that can be another indicator.

The site may have GIS maps that can tell you about whether or not the site would be considered "buildable" in the first place.  Some times around here they have "designated wetlands" or "eagle habitat", etc that could put a real t--d in your punch bowl.  There are some zoning designations that don't allow residences to be built there.  Sometimes a "grandfather" exemption (i.e., that old trailer on the parcel) can "reset" to current zoning by the act of the sale, or by removing the trailer.  Stuff to watch out for.

Never hurts to take a look and see what you can find.  Realtors have no interest in giving you a full picture of what's going on with a property.

Curtis

Thanks for the responses.

I guess i'll just wait and keep my eyes open for while. Im going to try to establish some credit, and save up as much as I can for a while for a down payment.
-Curtis


Bishopknight

Put an ad on craigslist like I did. Say what you want to build, how much you can put down, that you'll carry the rest in a contract with the land as collatoral. Although in my case, i bought the land outright. Realistically, You have the most to lose if you fail to pay the loan back. Had I known I would end up buying a backhoe, I could have put that into the Ad as "Willing to let land seller make use of my John Deere Backhoe Loader occasionally". That would be a huge bargaining chip.

My neighbor who sold me the land I bought just did this with someone else. Now they're getting a nice monthly check with interest and if that person fails to repay, they get their land back, how sweet is that?

People are hurting big time, not many people are looking to buy land, you can definitely find something, use craigslist.

Heres what my ad pretty much sounded like

QuoteLooking to buy 10 acres of land for $20,000 in Oxford County, Me. Must have road frontage and be south facing. Looking to build a homestead, plant a garden and have some goats. Willing to help neighbors as I am an young man in my early thirties

Squirl

My general sentiment is save your money and buy for cash.  In my experience there is usually a HUGE price difference in advertised owner financed land and land for cash.  Most land I was looking at with owner financing was 5-6k per acre in the same areas that I just bought for 1.6k per acre.  Remember the realtor price is the asking price.  Also most land in your price range a realtor won't even list.  The commission of 200-300 with the cost of advertising it, showing it, and their time is not worth it.  The craigslist idea is a good one.  Don't forget local papers.  Remember not all people that would be selling you the land might have jumped on to the technology band wagon.  I would do a lot of research into the pitfalls of land and how to get information on it first.  You are going to get a lot of people coming out of the woodwork trying to sell you some magic beans.

Curtis

Thanks guys.

I've posted some things on Craigslist, and got into contact with a couple that I bought a weight bench from Craigslist. While picking up the bench, they where just talking about how the had about 100 acres of land there and how they had retired. Nice folks, asked if perhaps they would be interested in selling any small portion of land. It was nice and hilly too. Worst they can say is no.

I'll try the local papers too, and I believe my best bet would be to buy from an individual.

Thanks for the help and words of advice.
-Curtis

glenn kangiser

Keep on persevering, Curtis.  Something will eventually work out.  Also, not getting into a rush generally helps you to find the better deals.
"Always work from the general to the specific." J. Raabe

Glenn's Underground Cabin  http://countryplans.com/smf/index.php?topic=151.0

Please put your area in your sig line so we can assist with location specific answers.