Trying to justify Buying more ground.

The 141+ acres that joins my farm is up for sale. It has an old house with water, electricity and septic and further back a cabin with water electricity and a composting toilet and a newer central air. Its land locked and is accessed by a 12' easement that runs beside a neighbors house so you never know anything is back there. It's a dead end drive off a dead end road. Both houses need work but look livable. There is a little tilliable but mostly woods some could be loged again.

I wanted it before I looked at it because land is going up around here and I will be priced our of expansion in the near future as it continues to become suburbs. But after I looked at it I fell in love. The land reminded me of a tv deer hunting show with cleared multi season food plots and great rolling terrain.

The neighbor on the back side is a good friend and will go in and split it with me if all the details work out. I can't afford half, heck really only 30- 45 comfortably. And that's I'd the Democrats lose becuse they will shut my job down if they win.

I keep looking for income ideas also I can afford to buy more besides the obvious renting of the houses. I prefer to avoid that. The people that would be atrackted to rent the old houses probably are not the type I would like to deal with as far as reliable renters that would take care of the property.

I guess I could offer a few limited guided youth hunts complete with youth firearms, instruction target practice field dressing and lessons on internal organs and deer behavior. But even if I find a market for that with rich people the profits would be limited.

I don't know I'm at that crossroads. Buy as much as I can afford comfortable stretch myself a little thin. Buy nothing at all and spend my cash on my current ground for improvements and deal with a lifetime of regrets once the land sells. Just the Same as 30 did on the other side I should have tried to buy but was maxed out at the time
that now has a house dogs and the things that go with city people with money that move to the country.

Some times it helps to type it out.

Buy it

20 years ago 880 acres came up for sale next to I and my brother's 700 acres. They were asking $1000.00 an acre. We with two nephews had the money lined up plus logging it would easily have paid it off. Could have bought it for $750.00 an acre. We backed out and regret it to this day. The 80 up front on one side we border had mature oak and hard maple. Almost a million in timber at that time off that 80 acres. Dumb, Dumb, Dumb! They are not making more land (except china) and price will not go down. It is near you now. Find or make a way to buy it.

Buy, you usually have one chance to buy adjoining property. What about small farm opportunities with vegetables or fruit that can be sold locally ? Especially if you can produce jams, preserves etc. without too much gov. regulation.

He ain’t making any more, so scoop it up if you can.

If you want it and can afford it-buy it,as long as you can cover taxes etc.
If it has marketable timber and you log it off the value of the land for re sale will likely never go back up where it was in your lifetime unless maybe you turn it into crop production or something.

Air B&B will help make the payments.

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.

Get as much as you can, whenever you can, when it makes sense. This does for you.
Especially sooooo close.
Like someone else said, they aint making any more land.
And like you said, suburbia is encroaching and it makes a guy sick.
Prices will only go higher.
Youll make it work.

I'm waiting for my neighbor to put his land up. It used to be part of my land until some financial issues in the '80s and my father had to put up those acres on the block. The neighbor said he'll let me have the first crack at it, I just hope I can afford it when it happens.

155 acres in 1998 for 58K, fast forward to sale in 2020 for 310K. Throw two timber cuts in during that time period and it still made money. You need to think if your keeping it for your estate or if your going to just consider it an investment for profit.

Rural property is the next big thing. Homes and land in the rural setting don't stay on the market long, city folks who can afford to move are buying and moving as quick as they can. I have seen in my area rural land has gone up just over $200.00 per acre in the last six months. And if you farm and property comes up touching you buy it if you can sir.

Buy it. If you get in a financial bind you can always sell it.

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.

x2

The biggest regret I have is not buying an adjacent property when I had the chance. Also, if it is landlocked now and you can provide access by buying it you will immediately increase it's value.

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.

This everyone I know regrets not buying land when they could have.

If you buy it you can atleast decide what happens to it and choose your neighbor. If not its the luck of the draw.

Buy it.

Sell some deer hunts an wine an dine them in the cabin an that'd sure help with payments.

I would buy the land.

I don't think you will regret buying it. Interests rates are low. If the property is truly worth $1000 more per acre than it is currently valued at, it is a no brainer. One thing to keep in mind, it is a lot easier to buy land than it is to pay for land. Another thing to keep in mind is that land prices can decrease.

If you can swing it-buy it....you will regret it later if you pass. I have passed on a few that I will never forgive myself for. But I have also bought the ones I really wanted the most and will never regret that!!! None of my purchases were for investment-they are all going to the kids. Hunting land.

Well consider your age and liability this is the first thing I would do. Interest rates are very low now which is good. Can the land pay for itself by farming it or by other means. You say if Biden wins the election you will loose your job. That could be a big consideration but it might be waiting till after the election and see what really does occur with you job. I always consider worst case scenarios when putting out a lot of cash for something be it land or equipment and consider how things would work out.

Buy it.

do you have the cash to buy it?

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.

It wouldn't be an instantaneous closing of my plant it takes time for legislation to make it through. It's just highly likely that they would pass a lot of laws that would end up closing our power plant and smelter . Thats speculation on my part of course . But looking ahead the writing is on the wall with the Democrats.

That said I'm nearly debt free so an added 600- 1200 a month off set by 400 income from the other property seems easy to make. Also I will see if they offer insurance that pays off the loan or at least makes the payments if I lose my job or become disabled .

Bob I don't see it as stealing from my retirement rather having a secure solid asset of the house and property that's pays about 9% return. I will have that 20 l back in 5 years and double it in 10 and still have a property I can sell for around 70k. I dont see how I can get hurt. Vs leaving it in the market that will most likely crash and take several years to recover. I see it as a stable investment like gold but with a better return. What am I missing


Then taking that income to off set the expense of buying an additional asset for bare land cost that has water electricity and 2 livable building for improvement. Those would cost over 20k to run and install going from what I was quoted from the power company and the water lines I am currently running. If course that's depends on how we devide it between each other. The structure really raise taxes and requires upkeep that will be expensive.

Also logging it could severely off set the expense.

It's a once in a lifetime chance to get it at this price. Without the neighbor I wouldn't consider it.

I'm going ts see if it comes together and if the neighbor and I are on the same page on where and how to split it. We will see. Maybe nothing will come together in that case I will just keep build up what we have and be grateful to God blessings that are so numerous i cant count them and I often am guilty of taking for granted.

It will take some time with the owner has agreed to give us before listing it at a much higher price.

If anyone really sees where I'm over looking something please let kknow.i understand wher Bob is coming from and could well be missing something.

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.

Well,,,its the only thing they cant make more of !

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.

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.

Like the others.... If you can swing it buy it. My Grandpa always said know one ever regrets buying land. I should have 90 and 40 acres on two sides that I was too reluctant to buy. Could of, would of, should of.

Why not rent out the house? Either hire a property manager or do it yourself, it's pretty darn simple if you learn the basic tenant screening procedures.

Option two is to buy it, rehab the house and subdivide it into a couple acre parcel. At that point you could sell the house and keep the land with a lower LTV.

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.

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

The thing you don't hear about when taking loans to buy land is how hard the financial stress can be on a marriage. Women already typically have so much aniexty and for twenty years of payments they have one more thing to worry about.

There is a freedom and peace that comes with being debt and obligation free, maybe just enjoy that feeling and try not to hold any regrets if you can't/don't buy it

Want to move to Indiana?;) I even know a guy that's pretty handy with ropes, rigging, chain saws, and big equipment.

I went out on a limb back in 1983 @ 22 yrs old to buy 100 acres 10 miles from the downtown area. Paid $32500.00 Houses were going for $40k at the time. Was told I was crazy for spending what I did. Fast forward to currently selling 2 acre lots that border me for $30k. Who was not crazy back then ? Yes I got laid off shortly after buying the land and had to put off building a house for 2 yrs but I worked 2 jobs until I got back on my feet.

Heh, maybe... How olds your daughter again . I will move west not east, I want to live somewhere with that western culture.

Like Denver? Lol lots of places turning blue. Before we got the farm I was leaning Idaho or southern Missouri. Logistics to shop in Idaho made it impossible. Made several trips Shopping in MO. Loved it and the people. Some day I may sell out and end up there once land prices get high enough and I get crowded out. Probably will never happen but it always on the back of my mind.

I told my wife she better not plan a western vacation because I may not come back.

I don't care if its a blue state as long as the local culture is conservative. I want to live somewhere you wave to every car that passes you. Montana, Idaho, Wyoming are the only real options.

If you do not get this land I would not let it bother you to much. My parents bought 80 acres when we were kids and I love the land and it is worth way more than when they bought it but the stress it put on their marriage and our family made it not worth it, even as a kid I remember how tight things were and the stress it caused.

PF,
It seems there are many moving parts and who can know the future, true?
It's evident from your input you would like this property REAL REAL bad.
The market is ripe for low-interest loans, yep.
Right next to you, check.

Risk is the neighbor I guess. Not sure from your OP how exactly another layer fits in. I don't care to enter land deals with others. Never have. Never will.
I'm sure you'll swing the cash some how. Don't we always.

Perhaps your only real question is what you might already know; "What does my future personal life appear to have to be in the future (how many years?) with me scratching and fetching to own this ground I want REALLY bad?"

How's the family figure into this?
How's your health for the next 2 decades look to hold up?
Stuff like that.
I have no idea how old you are, but are your earning years (as in all day every day) in front or behind you?

So does more ground and less cash/time sound good compared to less ground and more cash/time at your age?
You building a legacy or a life?

Good luck sir.
Blessings,
Mark