Loans for land purchase?

Blaze

Blaze

The Jeeper Reaper
Joined
Aug 9, 2005
Location
Wake Forest, NC
We're looking at buying a piece of land for under $100k. We'd like to eventually build a house on it. Technically we could put it on our HELOC but wondering if we can get it cheaper through a land loan that is set up like a mortgage or something. Is there anyone that does something like this? We had an issue doing this a few years back, but that was raw land and this is in a neighborhood. The other land ended up being contaminated so we backed out before we ever figured out the loan stuff.
 
Ive used AgSouth 2x.
But yes its 20% down, ARM only and interest rates are right at a HELOC.
 
When I was looking to buy land a few years ago, I went thru Carolina Farm Credit. But if I remember correctly, they will only give loans on land in the county, if it is in the city limits, they won't give the loan. I ended up not using them because I never came to a price agreement with the owner.
 
Like others have stated 20-30% down is typical or owner finance short term until you can flip to a different loan. Not many other options really. We keep an eye on a lot of properties around my in-laws that adjoin their property in order to either make the farm more contiguous in the future or circumvent any easement issues for points of entry, roads etc. Cash or at least enough cash for a sizeable down payment is the only way to go without getting taken to the cleaners on interest rates.
 
And, the % down is based on appraisal/market value. If you are paying a premium for the property, you have to make up that difference 100%. The property I purchased I paid about $30k more than what I felt it was worth, because it’s what I wanted and I couldn’t find anymore land like it where I wanted. Bank isn’t going to finance that portion of the purchase.
 
20% down is fine, I can pay that. From what we were seeing last night, it might make more sense to just use a home equity loan and then work to pay it off as we get our house ready to sell. It is 2.5 acres in a neighborhood, but it is up in the county well outside of town limits.

Our idea is to buy it and start aggressively paying it off as we work on our house to get it ready to sell. Then we are going to build a big shop on the land and move all of our shit into it. Sell our house and *gasp* move in with my parents while we build our house. My parents have a big house with room for us and they only live 5 minutes from us. The land is literally halfway between our current house and my parents house. I love my parents to death, but might be hard there for a while.....
 
rockcity said:
You won’t be able to build a shop on the land before a residence if it’s zoned residential.
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Good call, didn't think about that. It is Wake County R-40W zoning.

Maybe I'll put a studio apartment in it and call it a residence. :lol:

Then we can live there instead of my parents. :lol:
 
CasterTroy said:
I added a residence to my shop so I could build in that order (and provide a place where my aging inlaws can live instead of a retirement facility)
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I actually jokingly made the remark to my wife that we could do that and then rent it out to a Southeast Baptist student. She said "who would want to live out there with you banging and making all those noises you make out there?" :lol:
 
Also, it has to have a residence.... of some sort.... but the county doesn't know if there's anyone actually living there....

Buy a cheapest trailer a dump it on the lot.
 
RatLabGuy said:
Also, it has to have a residence.... of some sort.... but the county doesn't know if there's anyone actually living there....

Buy a cheapest trailer a dump it on the lot.
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Pop-up camper? I have one of those. :lol:
 
Buy one of those military truck camper thingys from @Tacoma747 and then you can kill a flock of birds with one stone.
 
RatLabGuy said:
Also, it has to have a residence.... of some sort.... but the county doesn't know if there's anyone actually living there....

Buy a cheapest trailer a dump it on the lot.
Click to expand...

You can't actually do that in many areas depending on zoning. Our neighbors built a tiny house on a trailer frame to live in while they built their house (adjacent to us), lived in it for a few months, and then got kicked off the land by zoning enforcement because the land is not zoned for a mobile home. The ended up getting an apartment and changed the scope and schedule of the house build because they hadn't budgeted for the extra $1k+ plus (per month) for the apartment while they built the house.
Before that, they did the same thing somewhere around Raleigh while building their previous house, and had no issues.
 
Some AHJs allow for temporary housing (RV, etc) on the property while building. But there are some notable restrictions and hurdles to jump.
 
So I talked to AG Carolina and they said they would loan me money on the land on some good terms.

But, my wife said she doesn't really like the neighborhood. Of course, she'd rather live in an HOA neighborhood with a pool instead of a neighborhood with houses that aren't architecturally similar and set back off the road.

Guess we are staying. For now.
 
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