Purchasing land

skyhighZJ

skyhighZJ

Gov retirement < needs to live
Joined
May 31, 2012
Location
Aberdeen, NC.
There is a 5.8 acre square with a small horse barn, 20x30 shop, and a run down double wide on. It is directly behind my property that has been abandoned since we have owned our place. We have finally been able to make contact with the owner and he is willing to sell at tax value with negotiations to remove the double wide (either demolish on site or have moved off for the cost of moving). Basically looking to be about $35k total purchase price. We want it to add to our farm property and it would strictly be used for the purpose of fencing it in and having animals on it. No house would ever be put on it as long as I own it.
I have reached out to a standard mortgage lender and got turned down because the house is trashed. I reached out to a land lender and they said sure but with 35% down. I don’t have that kind of cash laying around. My credit score is good and my income is more than sufficient to pay for the loan. How/who would loan on it? I’m waiting to hear back from my mortgage people that hold the note on my house to see if we could figure something out but looking for options.
Any help would be good and any details I may have left out please ask.
 
What kind of rate were they willing to give you w/ 35% down?
 
Do you have equity in home?
HELOC would solve that if so.
Of a good lender could do a new loan on both pieces with a contingency to combine tem into 1 tax id.
The key is going to be zoning.
if both parcels are zoned same its pretty easy
 
LBarr2002 said:
If you have equity in your current home, it may be best to refinance it and get some cash out?
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Ron said:
Do you have equity in home?
HELOC would solve that if so.
Of a good lender could do a new loan on both pieces with a contingency to combine tem into 1 tax id.
The key is going to be zoning.
if both parcels are zoned same its pretty easy
Click to expand...
We have only owned our home for 2 years so equity is minimal. Property’s are both zoned the same. And @Ron I’m hoping that my current lender will be able to do just that. Hoping.
 
Even at 2 years...if values have escalated..
 
Try southern bank. They have been helpful to me.

I’d go for refi current, buy that additional property and combine. Then you have nearly instant equity on the combined parcel(s).

One loan, you have both properties with one deed.

I think the alternative would be a personal loan at a high rate to get the deed to other property.

Once you have deed, then combine the two, and then refinance. The refi pays off the personal loan on 2nd deed, and gets you back to one loan.

Same solution, but different ways to get there.
 
Ron said:
Even at 2 years...if values have escalated..
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At 2 years, most banks are going to tell him that his house is just worth what he paid for it when he bought it. So won't be much equity. 35% down on raw land you don't plan to build on isn't a bad deal, I assume you've already talked to carolina farm credit and looked at usda loans?

Edit: or push for owner finance like Rob said, but he's still going to want money down. No matter what you're gonna have to have some cash in the deal. That's too good of an opportunity to pass up though.
 
rockcity said:
Owner finance? Can usually get much less of a down payment expectation. Set it up for 5 years and be done.

or, personal loan and pay him cash?
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That's what I was thinking, that's how my hunting property was managed. Owner finance on the original 66acres, as I bugged surrounding properties enough, ended up doing another half dozen surrounding 6-10acre plots as owner financed deals to be over 100acres in total.
 
So long back story summed up, not married (common law) and wife passing and land in trust with daughter as executor who wants nothing to do with it. Old man is allowed to sell property and is now doing so. He needs money and is looking for a quick buck. Not to be a douche but I’m trying to take advantage of this situation. Carolina Farm Credit is the one who told me they won’t touch it because of sketchy house and also not enough acreage to deal with?? I’m trying to look into a personal loan but they need a reason and if you even whisper land they run for the hills.
I just find it hard to grasp buying almost 6 acres for $35k ($5,800/acres) when comparable land is going for $7,500-$8,000 is so hard to get financing with out dropping a good chunk of cash.
 
You might be able to find a hard money lender for a bridge loan or something fairly short term. Will you be able to make enough money with the extra 6 acres to pay a 5 year note? I might be able to help.


Also if it were me, I'd get it under contract at an attorneys office then get the doublewide up to the minimum standards for a bank to loan on. The sad thing is a lot of banks don't even want to mess with homes under 100k anymore.
 
@skyhighZJ When I bought my land, I asked the guy at the Bank that I dealt with why it was so hard to borrow money on land. He said that the loan stays in house and doesn't get sold like a home mortgage, so they hold the note for the whole term. Mine hasn't been sold so maybe he is right.
 
Just thinking out loud....

I assume there is a functional well and septic where the old mobile home is. What if you swapped out the mobile home for a new model (repo?), finance the 5.8 with m/h (iirc, when we looked at modulars a long while back, the modular dealers had a deal where you could roll in land purchase), then rent out the modular/mobile? You get 5.0 of the 5.8 acres, and future income.
 
braxton357 said:
You might be able to find a hard money lender for a bridge loan or something fairly short term. Will you be able to make enough money with the extra 6 acres to pay a 5 year note? I might be able to


Also if it were me, I'd get it under contract at an attorneys office then get the doublewide up to the minimum standards for a bank to loan on. The sad thing is a lot of banks don't even want to mess with homes under 100k anymore.
Click to expand...
braxton357 said:
You might be able to find a hard money lender for a bridge loan or something fairly short term. Will you be able to make enough money with the extra 6 acres to pay a 5 year note? I might be able to help.


Also if it were me, I'd get it under contract at an attorneys office then get the doublewide up to the minimum standards for a bank to loan on. The sad thing is a lot of banks don't even want to mess with homes under 100k anymore.
Click to expand...


I could easily pay this off inside of 5 yrs as long as the interest wasn’t unreasonable.
The bad part is the people were gross and from what I can tell the MH (from the tag on the hitch it’s a ‘98 model) is GROSS and hasn’t been lived in for going in 2 yrs. my estimation is it’s trashed!
 
kaiser715 said:
Just thinking out loud....

I assume there is a functional well and septic where the old mobile home is. What if you swapped out the mobile home for a new model (repo?), finance the 5.8 with m/h (iirc, when we looked at modulars a long while back, the modular dealers had a deal where you could roll in land purchase), then rent out the modular/mobile? You get 5.0 of the 5.8 acres, and future income.
Click to expand...

Extra income is cool but having renters is something I will never deal with again especially the “type” to rent a MH in this area. Honestly my schedule just would allow me to do the Army thing, keep up with the farm property, and deal with whatever may go wrong with the rental house. It’s a solid thought though!! Thanks!
 
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One other thought.
You have a farm, right?
What about an Ag loan? For stock, or equipment or....
 
Ron said:
One other thought.
You have a farm, right?
What about an Ag loan? For stock, or equipment or....
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We have a “farm” but we don’t qualify according to the state for farm status due to acreage and $$ sold each year. This purchase would at least put us over the required acreage.
 
skyhighZJ said:
We have a “farm” but we don’t qualify according to the state for farm status due to acreage and $$ sold each year. This purchase would at least put us over the required acreage.
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Not worried about the state, thinking about an ag lender...
Agsouth (think they trade as Carolina farm credit in nc) had lots of creative loans. Even crop or stock loans with no payment due for 12 months etc
 
Ron said:
Not worried about the state, thinking about an ag lender...
Agsouth (think they trade as Carolina farm credit in nc) had lots of creative loans. Even crop or stock loans with no payment due for 12 months etc
Click to expand...
I second AG South. My brother used them for years with his farm. They did him solid on his initial land purchase.
 
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