Jump to content
Sign in to follow this  
simicrintz

If a fella wanted to buy some land.....

Recommended Posts

Wife and I found a lot in Utah that we see ourselves building our dream home on one day.  Surrounded by a lot of BLM land; 65 miles of dirt road to the Grand Canyon, 20 minutes from Zion, couple hours from Lake Powell.  Trying to write an offer and coming up against some struggles finding a lender.  Credit scores are good, have the down payment but seems not everyone wants to lend on land.  Any of you guys from the "been there done that" crowd have any info you can share?  We've been looking for a while and have missed out on this particular lot a couple of times already so finding a lender as well as getting the cash available quickly as possible is the goal!

Thanks guys; really appreciate any input you may be able to provide!!

Share this post


Link to post
Share on other sites

I looked into this also out near jacumba and easiest for our situation was to do home equity loan but ultimately decided not too. Our bank was very hesitant to lend on land and didn't want to take out of solid investment accounts to pay cash.

Share this post


Link to post
Share on other sites

Contemplating a HELOC versus a complete refi.  Would love to pay the lot off in the next couple of years and then sell our house here and pay for the build there.  Just hesitant to attack the equity, even if it would still be equity of some sort......

Input is appreciated!  Ain't never done this so do not want to screw up!

Share this post


Link to post
Share on other sites

It's going to be very tough to find a lender for vacant land. Maybe some very small banks will do it. If you have plans to build on the land then it gets easier. You can get a loan for the construction and the land. 

Share this post


Link to post
Share on other sites

I've drawn a house that we intend to build in AutoCAD, but it is not construction ready (still need an architect for the final drawings); I wonder if that would fly?  I can pull a plat map and input the drawing onto it pretty easily; I may just do that anyway.  We're gonna drive back out on Friday and go visit the area again on Saturday and if I can get that drawn and printed maybe I will take it along.

Thanks, Jim!

Share this post


Link to post
Share on other sites
39 minutes ago, simicrintz said:

I've drawn a house that we intend to build in AutoCAD, but it is not construction ready (still need an architect for the final drawings); I wonder if that would fly?  I can pull a plat map and input the drawing onto it pretty easily; I may just do that anyway.  We're gonna drive back out on Friday and go visit the area again on Saturday and if I can get that drawn and printed maybe I will take it along.

Thanks, Jim!

Tough to do. Banks don’t want collateral that can’t be liquidated quickly if things go bad. So loans on land are scarce  

if you have equity in your home, a heloc or cash out refi will be your best option, usually much smarter than tapping an IRA, 401k or investment fund.

If you are sure of your goal then you should get the money part ready to go now while rates are down.  So that when you find the right piece, you can negotiate a deal and close it without the huge specter of ‘but can I get financing?’ hanging over the deal.  

PM me if you want to look at some real numbers so you can make a decision that’s best for you guys. 

 

Share this post


Link to post
Share on other sites

We had the cash available from a family member (the balance of what we did not have saved) and were working on a cash deal, but at the last minute the cash dried up so we are now in this position.  We have been messing around with this lot since early July and have been watching it ever since.  We are pretty convinced that this is the one and where we want to be (but we are also trying to keep the emotion out and understanding that if it is just not meant to be we need to be prepared for that).  Perhaps this is a "get your poop in a group" situation where we do need to get some things in order before attempting something like this.

Thank you, Kelly.  I gotta get out the door and go try and earn some more money but will most likely PM you later today!

PS  Are you suggesting that I talk to you before accepting Tom's generous offer?

Share this post


Link to post
Share on other sites

Be very wary of an offer from Tom.  He's real nice up front.  But I heard the last guy owed him money went missing and his bikes mysteriously appeared for sale in Tom's garage.

They call me #motomortgageman so I have that going for me.

  • Haha 1

Share this post


Link to post
Share on other sites
35 minutes ago, Zubb said:

Be very wary of an offer from Tom.  He's real nice up front.  But I heard the last guy owed him money went missing and his bikes mysteriously appeared for sale in Tom's garage.

They call me #motomortgageman so I have that going for me.

Wanna buy a bike?  

  • Haha 1

Share this post


Link to post
Share on other sites

The property is only about an acre and a quarter, but would be a great meeting up place to get to all kinds of great spots!  I have no intention of selling the bikes, but a SXS would probably find its way into the garage for Mrs. simicrintz and I to go explore as well.  This is one of the primary reasons for looking in this area.   It also has a private airstrip for any of you pilots who may want to fly in :)

Good advice, Kelly-noted.

Tom-I am afraid of you!!!

Share this post


Link to post
Share on other sites

I dont know how much you are looking for but if you have a 401k you can borrow up to $50k against it and pay yourself back.  

disclosure -  I am not a fiduciary or financial adviser. 

 

Share this post


Link to post
Share on other sites
2 hours ago, ADV Bum said:

I dont know how much you are looking for but if you have a 401k you can borrow up to $50k against it and pay yourself back.  

disclosure -  I am not a fiduciary or financial adviser. 

 

That may be a good option for you too.  The max loan amount from your 401k can differ but generally it's 50% of your vested interest or $50k - - whichever is lower.  Or if your vested balance is $10k, you can borrow all $10k.  If you're self employed (and have an IRA) the rules for borrowing are different.  You 'might' be able to borrow $10k to buy a house w/out penalty or taxes.  I don't know about land though.  There's also the option of converting your IRA to a "self directed" IRA . . . . . which you can just write a check from to purchase the investment of your choice.  For example, a rental house.  But I'm coloring outside the lines now.  My playground is in the residential mortgage arena.  I'm not a CPA.

Share this post


Link to post
Share on other sites

You guys are awesome, and I appreciate this!  And for the record I understand that any and all advice is purely hypothetical and not in any way construed as legal advice!

I don't want to jinx anything but the bank called earlier and said that we are tentatively approved for the HELOC pending tax returns and W2's.  Cautiously optimistic that this all goes through and we can make this happen!

Thank you guys again for all the input!  I have no false thoughts of being anywhere near the brightest guy in any room and am never afraid to ask a dumb question!

Share this post


Link to post
Share on other sites

Not yet.  They had this on the market for almost a year and it did not sell (in all honesty we lowballed our offers based on that and then backed out when none were accepted.  I know what they paid for it about a year ago and why they are selling but did not feel that they needed to get their money back if they over paid, and we based our offers on that info.  We are now 30K below what they started with and 10K below what they paid, FWTW).  

Hopefully we are in a good place now (should know later today), but if something changes I may have to ask him to carry it.  Fingers crossed that today brings us good news (we are driving out tomorrow to go look around out there again over the weekend, would be nice if we would be going to visit "our" property!). 

Thanks, Chris; I like to have options and appreciate the input!

Share this post


Link to post
Share on other sites

People don’t like to lose money so sometimes it takes time for them to realize reality. I’m negotiating on 8 acres near my house that a guy from Chicago bought in 07 for $525K. I offered him $125K he came back at $249K. I think we’ll probably settle at $175K. It takes time and I could still lose it to someone else but I know what I’m willing to pay and won’t pay any more.

CiD

Share this post


Link to post
Share on other sites

I am hoping that is the case here as well (and it appears that he has come to terms with it).  The area has a lot of potential and we can see ourselves living there.  I like the fact that there is so much BLM land surrounding the property; all accessible from bike or SXS, and that it cannot be built on.  There are only 96 lots so it is not a huge development, which is appealing to us as well.

Fingers crossed for both of us!  

Share this post


Link to post
Share on other sites

Random thought . . . If you like it, and the price is fair, and you can afford it. . . buy it.  I've watched more than a few people worry about negotiating for a few more pesos and lose 'their' property.  I'm not suggesting you would do this. . . it's just something I often try remind people of.  

We buy property generally for the long haul so if the above factors are all good, then I encourage folks to just do it.  5 or 10 years from now it won't matter if you paid $100k (for example) or $125k.  You use it, enjoy it (and the accompanying appreciation) and will probably make money on it one way or another far off in the future.  Usually people start nickel and diming the deal because they are just nervous about pulling the trigger as apposed to whether it's a fair deal.  (disregard this message if you are a flipper)

Again, this statement is for general consumption and does not infer or imply that it may be your situation.

Share this post


Link to post
Share on other sites

Understood and agreed, Kelly! The truth is that we tried to lowball him the first time because it had been on the market for almost a year. We heard that their market was down 12% (open for discussion as I have heard they are also a hot market) and that he was in a pinch.  When we backed out after our last (still lowball offer) we continued to watch it and then saw that the listing had been removed.  I sent him a letter and he had his Realtor call me, letting me know that is was going to fall out of escrow and would be going back up for sale again soon.  If we get it this time we will be paying $6,000 more than the last offer we made, and I am okay with that.

I do appreciate the thoughts.  And you are 100% right that I will not be worrying about it 5 years from now!

  • Like 1

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

×