Questions about buying land

[chas0218]

So my wife and I are looking into buying land. I know a few of you have bought land in the last year and was wondering what the deal was if you paid cash or financed it? My wife and I don't have $75k just laying around so I am a little more interested in those that have financed and the ropes you had to jump through bank and purchase offer wise. This is going to be on the southern border of NY unfortunately and people think that fracking is still going to happen so some expect to get $3000+ an acre. Any help is greatly appreciated.

[Steuben Jerry]

Cant help with the financing info, but around me (8T) land is between $1000-$2000 per acre. The $1000 parcels are usually steep topography.

For $2000, it's usually got something going for it, like a good year-round road, decent cellular coverage, conveyance of mineral rights, etc.

I also see a lot of difference in pricing when taking into account the size of the parcel. Big parcels frequently sell for less per acre than that 5 acre "cabin site".

And remember, sometimes there is a lot of difference between asking price and the eventual selling price. 

[moog5050]

Chas

Most banks won't finance recreational property.  Too much risk.  But some sellers may be willing to take back paper.

[virgil]

Like Moog said, not easy to get a bank to finance a property without something already built on it.

[BizCT]

My dad bought land this past spring. Cash deal. Like others mentioned, doubtful a bank will finance you.


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[vcollaco]

If you will eventually build on it, I would suggest buying a piece with a house already on it.  This way you don't get a big surprise when your new and improved tax bill arrives.  Then you can mortgage it, as long as it isn't a modular or trailer home.

[Core]

Maybe not a typical bank, but in the 2017 hunting guide by NY there was a site like nycabins or something like that and you could finance through them. Rates would be 7% maybe (?) with a downpayment.

There is not a financial adviser in the world who would bless this, but if I was dead-set on buying land right now I'd take out a 401k loan to do it (and no, they are not double-taxed--that is a myth) because I also don't have any meaningful cash sitting around.

 

[Caveman]

You may be able to get financing through a small, local credit union.  Expect them to require a substantial down payment and a high interest rate if they're interested at all. 

You can also look at brokers that specialize in recreational property like Christmas and Associates (http://www.landandcamps.com/).  They offer to finance some of the properties they sell on their website.  I don't know for sure, but you may be able to get someone like that to finance your purchase or point you in the direction of a lender.  Again, big down payment and high interest rates compared to improved property.

Your last option is to find a seller who is open to holding a mortgage on the property.  I really wouldn't count on it though. 

My suggestion is to get a bunch of buddies and go in on it together.  Just make sure you see an attorney to drawn up papers that specify how issues will be handled handled, i.e. someone wants out, someone dies, etc.     

[First-light]

I got an equity loan on my house and used the cash to pay for the land.

[Jeremy K]

About 12 years ago I talked to a bank about getting a loan for a piece of land ,it had a double wide and a monster sized barn . The bank didn't recognize the double wide as an actual home and said it would be viewed as vacant land ,they said I would need to come up with 20 percent down in order to get a loan. 

[Zag]

There are bank options. Check out farm credit east, they have options for farmers and those who want rural land. I believe you have to have a 700+ credit score and I think around 30 percent down.

[growalot]

first off ...in the area you mentioned,where fracking was possible..crazy expensive any ways...and yes try to get something,say with a mobile home on it...lower taxes easy to remove if needed and your already set up on utilities The other thing is try not using a realtor...here's the thing. It' never hurts to ask...see a sign knock on the door and talk..if they are about to run out on the contract...then give them your # ...but you both need to know  the realtor can't know.....just don't discuss the property other than a price they are looking for. look for 4 sale buy owners...and hey talk to people in the local dinner or mini mart...older farmers in the area looking to sell some land...Do the deals your self...use one lawyer for everyone..it's really not that difficult. or find bank repos and tax auctions...even if it is a realtor find out if it is vacant who holds the papers on it..banks want to deal...No matter what the agent tells you. Our sons home 69.900 huge farm house two garages 5 acres and a pond...bank owned...We told agent to go to bank and offer 34,000 cash...she said no way but did it...they came back 36,000 done deal

[chas0218]

Thanks guys, the problem is that the pieces of land with houses is that most are junk and the bank won't finance them for the money they are asking because most banks don't take the land into account. That makes the buyer front more money (10%-20%) of the total worth. I'm not against that but the land I have been looking at is around $70k for a decent amount. I was thinking of owner financing with a down payment but I have seen and heard some horror stories. I have looked into the farm credit east I think I will get into contact with them again. The wife and I grew up in Wayne county where land was somewhat cheap and flat. It is tough finding flat land or stuff that isn't shear cliffs in the area we want. 

The local credit unions would finance with 35% down so we might end up going that route if we find something we like. The other thing is we want to eventually build on this property.

[Will_C]

Really the only practical to buy vacant land is to have the cash or some sort of equity you can borrow against. If you can secure financing at a good rate, you probably don't need it!

Will

[E J]

Farm Credit is your best bet. They are pretty easy to work with as long as you have the required down payment.

[10point]

16 hours ago, chas0218 said:

So my wife and I are looking into buying land. I know a few of you have bought land in the last year and was wondering what the deal was if you paid cash or financed it? My wife and I don't have $75k just laying around so I am a little more interested in those that have financed and the ropes you had to jump through bank and purchase offer wise. This is going to be on the southern border of NY unfortunately and people think that fracking is still going to happen so some expect to get $3000+ an acre. Any help is greatly appreciated.

Is the just for hunting ?  If so have you considerd leaseing land ?

[chas0218]

Is the just for hunting ?  If so have you considerd leaseing land ?

No it will later be for a house.

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[The Engineer]

My wife and I tried to do the same thing. we went everywhere in the Catskills to find that piece of God's country. Our range for land was 125 with 30% down. Our credit is 850. we found a bank (Trustco) and they had no PMI and closing cost $2500. 

With that being said my wife said find a house so we can use it now and all year long. Instead of putting down 30% we put 10% instead. why not no penalty. I love my wife she is a economic machine.

For the same price of what we thought land would be we also got a 2 bed room house and a 20 x 40 garage. We also had extra down payment money left over for matching quads.

Where are you looking? Keep in mind even if you dont put 20% on a house the pmi may only be $60 per month. That way you and the wife can use it all year long. A tent can get cold in the fall and winter.  See if Trustco bank is in that area or does loans in that area. They are very 2nd home and upstate freindly. 

[chas0218]

Just wanted to give everyone an update I know it has been a while. My wife and I found a house with 40 acres of nice woods. Unfortunately not a lot of oaks but some nice hard maple, some pussy willow, and nice thick pines. There is a ton of deer sign and lots of rabbits running around. Another plus are the grouse that the property currently houses. If everything goes as planned we are closing Monday and I can start some renovations. It wasn't my wife's dream house by a long shot but for the price we paid we can do some substantial renovations to make it everything we both wanted. Thanks again for the help everyone we are ready to move in and make some new memories.

[BigGuyNY]

Congratulations  

Edited March 31, 2017 by BigGuyNY

[growalot]

Congrats and enjoy! 

Let me offer some sound advise from experience. Renovations...keep it simple and one small area at a time..make sure if It's electrical...more out let's are better with a solid layout plan

Keep your stress levels down...nothing will raise them like renovations...

Make sure the misses knows there is a lite at the end of that tunnel.

[chas0218]

13 minutes ago, growalot said:

Congrats and enjoy! 

Let me offer some sound advise from experience. Renovations...keep it simple and one small area at a time..make sure if It's electrical...more out let's are better with a solid layout plan

Keep your stress levels down...nothing will raise them like renovations...

Make sure the misses knows there is a lite at the end of that tunnel.

Yeahhhhh, small I don't think is in my wife's vocabulary. The plan is to add a 2 story addition off the back 16'x35' then tear off the old roof and finish the 2nd story over the rest of the house. So in essence taking a 1400 sq. ft. home with 2 bed 1 bath and making it a 2500 sq.ft. home with 4 bed 3 bath, 2 main living areas and a play room for the little ones that will eventually become a man cave/den. It will be a 1 year project and being a school teacher and doing most of the work myself I think my time at the lake will be short lived. Then I have to get my food plots in and cut some trails through the property.

[Steve D]

38 minutes ago, chas0218 said:

It wasn't my wife's dream house by a long shot but for the price we paid we can do some substantial renovations to make it everything we both wanted

CongratulationsTo add to grows' advise.....Plan real good and do it right the first time. Nothing worse than having to go back and change things after the fact. If it is done right the first time you can look back with satisfaction and move on to the next project. Houses are BIG money pits and can be very frustrating and expensive but it can be rewarding in the end.

[chas0218]

15 minutes ago, Steve D said:

CongratulationsTo add to grows' advise.....Plan real good and do it right the first time. Nothing worse than having to go back and change things after the fact. If it is done right the first time you can look back with satisfaction and move on to the next project. Houses are BIG money pits and can be very frustrating and expensive but it can be rewarding in the end.

We put in the offer in Decmeber, as soon as they accepted we started the planning process we have all the expenses figure out for the big stuff like materials, roof trusses, and tools. All said and done we are looking at a bill of around $35,000. It's a large amount of money but it is money we will definitely get back out of the house. The houses we looked at with the square footage in the same area were pushing $300,000 with the amount of land we wanted (more than 20 acres). We paid less than half that so we will be doing good.

Edited March 31, 2017 by chas0218

[Steuben Jerry]

Congrats Chas! Hope it gives you many years of enjoyment!

Edited March 31, 2017 by Steuben Jerry