Re: Trying to justify Buying more ground.
[Re: Providence Farm]
#7030482
10/28/20 04:02 PM
10/28/20 04:02 PM
|
Joined: Oct 2020
Posts: 1,102 KY
ILcooner
trapper
|
trapper
Joined: Oct 2020
Posts: 1,102
KY
|
I would not buy it. Spreading oneself too thin with debt is a recipe for disaster. Sounds like you could probably squeak by making the payments month to month, but that first little curveball life throws you will knock down all your best laid plans like dominoes. Pretty soon it’s snowballed to the point you’re having to look at bankruptcy.
Good rule of thumb is to spend no more than 25% of your take home pay on your home/land. Sound advice. Here is some background I'm 40 years old and owe 20k on one morgage my in laws are living in and paying the payment. Other than that I'm debt free. This summer I spent out of 20k out of savings on farm improvements. That was before I missed 1.5 months of work due to covid quarantine, my daughters accident and my old car became destined for the junk yard. I also am putting in 1900' of water lines on the farm by December. So my savings is very low currently. I just bought another cheap transportation truck a 97 ranger with 52k for 3200 cash. Yuck 2wd but cheap and will hopefully last. I dont like debt. Payments on a 20 year 100k= 33 acres of it roughly will be just under 600$ a month. I I Can cash out 20 k from my 401 pay off that morgage and turn that into 400 a month and use that property for collateral for the down payment. Making my payments the equivalent of ,$200 a month or less than a days pay per month. That makes it easy to buy even more of the ground. As stated it always going up in value and they are not making any more. Add in that it borders my place and probably won't be for sale again in my lifetime at least that I can afford makes me really to buy as much as I can. If it were advertised it would sell quickly and easily probably for at least 1 k more per acre if for nothin more than from some big money deer hunters. The penalties and taxes on cashing out your 401k will kill you. Bad idea. Three consequences of a 401(k) early withdrawal or cashing out a 401(k) Taxes will be withheld. The IRS generally requires automatic withholding of 20% of a 401(k) early withdrawal for taxes. So if you withdraw $10,000 from your 401(k) at age 40, you may get only about $8,000. Keep in mind that you might get some of this back in the form of a tax refund at tax time if your withholding exceeds your actual tax liability. The IRS will penalize you. If you withdraw money from your 401(k) before you’re 59½, the IRS usually assesses a 10% penalty when you file your tax return. That could mean giving the government $1,000 of that $10,000 withdrawal. Between the taxes and penalty, your immediate take-home total could be as low as $7,000 from your original $10,000. It may mean less money for your future. That may be especially true if the market is down when you make the early withdrawal. “If you're pulling funds out, it can severely impact your ability to participate in a rebound, and then your entire retirement plan is offset,” says Adam Harding, a certified financial planner in Scottsdale, Arizona.
Last edited by ILcooner; 10/28/20 04:03 PM.
|
|
|
Re: Trying to justify Buying more ground.
[Re: Bob]
#7030581
10/28/20 06:07 PM
10/28/20 06:07 PM
|
Joined: Mar 2018
Posts: 1,098 NC
Tailhunter
trapper
|
trapper
Joined: Mar 2018
Posts: 1,098
NC
|
Nobody ever says, “I sure am glad I didn’t buy that land 20-30-40 years ago”. Sure they do, when they have to file bankruptcy and lose the land as well as the equity because they were over leveraged to begin with. All the math in the financial world concerning debt leaves out one factor, the biggest factor, which is risk. If your income stops from illness, or something expensive happens to you that you have to pay for, sometimes both at once, then you are screwed. The math works when it’s just math but life happens. I definitely would not cash out retirement funds to buy it. Don’t steal from your future to find your now. You’re right, never take a chance because some body once somewhere did it wrong. I’ve seen land out preform retirement funds many times.
Last edited by Tailhunter; 10/28/20 06:07 PM.
|
|
|
Re: Trying to justify Buying more ground.
[Re: Providence Farm]
#7030650
10/28/20 06:59 PM
10/28/20 06:59 PM
|
Joined: Dec 2014
Posts: 289 Arizona
Starbits
trapper
|
trapper
Joined: Dec 2014
Posts: 289
Arizona
|
Interest rates are low, but only for houses. Interest rates on raw land is probably double if you can even get a bank interested in loaning. I know you said there were houses, but keep that in mind when you and your neighbor decide to split the land. I would definitely buy it.
Last edited by Starbits; 10/28/20 07:00 PM.
|
|
|
Re: Trying to justify Buying more ground.
[Re: Providence Farm]
#7030687
10/28/20 07:26 PM
10/28/20 07:26 PM
|
Joined: Mar 2013
Posts: 2,172 chelsea,wi
keets
trapper
|
trapper
Joined: Mar 2013
Posts: 2,172
chelsea,wi
|
buy it and get those houses rented out to pay for it all
2021 goals....make time to trap PROUD MEMBER WTA NTA FTA GOA SPORTSMANS ALLIANCE
|
|
|
Re: Trying to justify Buying more ground.
[Re: keets]
#7030705
10/28/20 07:38 PM
10/28/20 07:38 PM
|
Joined: Jan 2018
Posts: 4,581 MN
Donnersurvivor
trapper
|
trapper
Joined: Jan 2018
Posts: 4,581
MN
|
buy it and get those houses rented out to pay for it all Agreed. If I could find a house to rent for say 600 a month + expenses in the middle of nowhere and the landlord never bothered me or complained about my trucks and trailers I would jump all over that. The last place I rented I did all sorts of work to just to fix it up, never asked them for anything I just did it, lots of people like me looking for a place that is cheap where they can be left alone for the most part, quality of the house is largely irrelevant to someone like that.
|
|
|
Re: Trying to justify Buying more ground.
[Re: Providence Farm]
#7031048
10/29/20 01:02 AM
10/29/20 01:02 AM
|
Joined: Feb 2020
Posts: 8,961 Indiana
Providence Farm
OP
trapper
|
OP
trapper
Joined: Feb 2020
Posts: 8,961
Indiana
|
Probably won't happen realistically. The neighbor showed no desire for the houses and tax burden only the land this weekend. Today they want the houses. This didnt sit well with my wife so unless there is a substantial off set on price per Acer ve assets of the houses I'm out.
As far as interest rates on raw land it's under 4% with 25% down through farm credit services. With money down and good credit it's easy. I will probably go to get per approved tomorrow just incase but I'm not holding my breath at this point. I'd probably be ahead to spend the cash on what I have and concentrate on profit instead of more land that will be an expense. After all if it goes from double what I paid (current) to 4x I may sell out and head west.
Coming together with other parties was a long shot to begin with. Business with friends never mixes well and I prefer to keep the friends. Wife was discharged said if I want it get it but you know how it is when a woman gets an idea in her head and it gets changed. Happy wife and life type jazz.We will see what happens.
Last edited by Providence Farm; 10/29/20 01:19 AM.
|
|
|
Re: Trying to justify Buying more ground.
[Re: Providence Farm]
#7031174
10/29/20 07:25 AM
10/29/20 07:25 AM
|
Joined: Dec 2017
Posts: 6,223 Kansas
Pawnee
trapper
|
trapper
Joined: Dec 2017
Posts: 6,223
Kansas
|
With interest rates so low it’s a great time to buy if land is priced right. We’ve bought 1000!in the last six months because prices have dropped a bit. Our rule is if it’s close or adjoins buy it. The few times we have broken this rule we have regretted it. Run the numbers and most importantly pray about it. I always ask for the Lord to take away any emotions I have and to give me clarity on decisions like this. Good luck and let us know your decision
Everything the left touches it destroys
|
|
|
|
|