Land purchase question

For the financial experts on here.

I am looking at 45 acres that is too good of a deal to pass up. I can afford to buy the land with a land loan, but cannot afford all of the land and the price of building our house.

What I can afford is to buy half of the 45 acres and build our home. But the current owner will not sell half, he will only sell the whole 45.

I have the money available to put down 25% of the purchase price of the 45 acres.

I have talked to our local farm credit and they said if the land is sold then the sold value up to the appraisal number will be paid directly back to the loan. You do not keep the money that you get for selling half of it. I would like to use the sell price of the half to build the home.

Is there another way to finance the land loan without the revenue from selling half of the land going directly back into the loan?

Thanks!

I wonder how developers get away with selling lots off a chunk of land. Maybe if they pay cash its allowable.

If it is a really good price the part you sell should be marked up making you more than pay off on all the land giving you money for the down-payment for construction.

If you can afford to keep the whole thing and move a used trailer house in that may be a worthwhile option. Used double wide are pretty cheap

If it were me I would not do both at the same time. Either build the house or buy the land. If your current living situation is stable and you don’t mind staying where you’re at awhile longer, AND you buy the land at less than market value, I would probably lean toward buy the land, sell half for enough to pay off the remaining balance, and then later build the house.

The only way to finance, sell half and keep the cash from the sale is with an unsecured loan OR using something you already own as collateral to secure a loan. Otherwise if you sell part of the land it will go directly to the bank to pay off your loan. The bank always gets paid first, if there’s any left over it gets sent to you.

Buy if a good deal and what you want, worry about the house later.

(wish I had someone tell me this 40 years ago, I let the land I still think of slip away.)

If your like me you will regret selling any of the land of you get it and decide to sell some.

I regret not buying the 30 next to mine when I had the chance now I have a 1/2 million dollar house sitting there I'm looking at. I think I may build a few 55 and older rental homes to block the view. Single story, no steps, zero entry shower you can wheel a wheel chair right into. Walk in tub , grab rails. At least then they will be my houses I'm looking at then and hopefully generate income.

This is what I don't want to happen. I do not want to miss out on this property because I know I won't find anything else for a deal like that. It is a beautiful piece of property with hardwoods and a large field that drops down on the river bottom. There is an overall elevation change of 150 feet from the front to the back of the property which is a lot for central NC. You can see for miles it seems like up there on the hill. It would make a heck of a place to build a house

Get the guy to cut it in half. Get a mortgage on one half and pay him. Maybe he would sell the other on contract and spread the payments out a few years and get his taxes down. Since he wouldn't want to let you pay it off because of taxes if you was to sell it then You would have to sell your contract to the new guy which if they wanted to build they would have to get him to release a building spot.
Could have him sell it to you in two parcels and get two mortgages and if you sold one you could keep the profit from it after paying off balance.

Buy! Live in a camper if needed, you probably won't get a second chance.

He will not split, it will be sold as once piece. I will have to do the split if I want to sell half later

This

You can build a house anytime, you can only buy land when it is for sale. If it is a good deal I would buy the land and worry about a house later, the housing market is very liable to crash shortly and that should push materials down to a more reasonable level. The cost to build right now is ridiculously high, and some things are hard to get thus increasing the time to complete the build and pushing the cost up even further. I would not split the land as that could quickly turn a dream property into a nightmare depending on who buys it and what they do with it.

Buy the whole piece, live where you currently are, 1,2,5,10 years later build a house.

Buy the land - you will never regret it. Continue living where you are until you can afford to build. or other option are build a shouse / shop with small living quarters or buy a used camper and live in it until you can build or while building.
We have 51 acres and its great having the space to trap and hunt. plus the privacy. Definitely buy the 45 and keep the whole thing. We bought the land first, then built. Pm me for more info if you want.

agree 100%

I am with Hippie, buy it now!!!! Maybe timber off some of the trees for a payment or what ever but buy it and figure out the next step later. But it it will probably never get any cheaper.....jk

Gods not making any more land! Buy it

What's the hunting lease rates in the area like? Small property it might not be enough for a house but leasing, pe for selling hunts preferably, might give you some breathing room.

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I would buy it if it fits what you are looking for and you can afford it.

As far as the lending part. You are saying it’s a great deal, you have 25% down then I would purchase wait until next spring or whenever you are thinking you are going to start building and go back to lender and tell them you want to split the property. You get a new appraisal on the part you are not building on and if you are lucky enough it will appraise for enough to cover the amount you owe. If you are fortunate for that to happen then you have your house lot free and clear for the construction loan. Keep your lot to build on at 20 acres or less so that you can get financing on secondary market after the construction is complete. You mentioned a creek flowing thru , be aware of flood zones, no more waste of money then building in a flood zone. Wouldn’t hurt to let the farm credit know what your plans are ahead of time to see if that is something they would allow. If they don’t then find a local bank and start working with them. Farm Credit probably is not interested in construction loans. Now in this scenario you would still have a land loan and a house loan so budget accordingly but you would not have any close neighbors and who doesn’t want to own as much land as possible.

Lots of if’s and but’s.
Good luck

Buy the ground if you like it. You can move in a van down by the river to live in

I enjoy hunting too much myself to lease it, lol

16 acres of it is fields that are currently being leased to farm. Doesn't add up to enough per year to count for anything. May as well let them farm it for free

How long can you wait on building your new home? If you buy the 45 acres at what you call a good price, how long will it take for you to sell the other half to another buyer? If that time is short then your delay won't be that long.
Also you could use a construction type loan for the start of your home with that becoming a mortgage in a determined amount of time. You may be able to bridge a loan or mortgage and basically hold two properties and or mortgages at the same time. I have worked with several farmers who held Farm Credit service loans and mortgaes. You state that all the proceeds from the sale of the other half (income) needs to be used to reduce the original land loan. Why is that such a bad thing. You wll have signifcant equity in that 22.5 acres with your 25% down and all the proceeds from the sale of 22.5 acres that you should be able to then mortgage your home as well.

Bryce

That's why I lhe idea of selling hunts over leasing. You don't lose control over the property and you can hunt whenever you dont have hunts booked.

I would say the longest we would wait to build is 2 years. I would sell the other half within a week of putting the for sale by owner sign out at the road. The market for land around here is insane. I would like to sell to someone I know or one of my friends. Possibly my little brother if he can afford it at that time.

I would definitely be using a construction loan for the home. I believe I could sell the land for what the remaining 75% balance on the total would be so I would not owe the bank anything. By putting the 25% down I am depleting my savings so I would have to wait for awhile and then get my construction loan to build

Buy the land and sweat the small stuff later. Scale back the wedding some. Talk to different lenders. Be a little more flexible with your plans to eventually get to your long term goal.

No way should you even consider buying it if you have any sort of idea of selling half of it. The old timer knows what hes doing, you either buy all of it or none. You will 100% regret splitting, selling or any other wierd stuff. Also consider not building a house on it, honestly sometimes land is better without a ugly manmade house put on it.

get the land...wait for a house

Buy the whole thing and keep it. You will regret splitting it no matter who you hand pick to buy the other half.

As for a house, consider building it in 2 steps. Build your attached 2 car garage and finish it as a temporary living/ dining area. Above that have your bedroom(s). Then a few years down the road add on the rest of your house when you can swing the extra money. This strategy has worked well for several of my immediate family.

They are not making any more land. Buy it and work the house out later!

Calculate your stumpage, buy it, log it and build the house later... I would rather clearcut 20 acres than sell it.

X3... I read somewhere that on average, a large piece of land (I think they were talking about ag land) only comes upon the market once every 80 years. If that's true, this is your only chance to keep that entire piece of property. Seems like you have a good career, Id buy the entire thing and worry about building on it a few years down the road. You will kick yourself down the road for selling half of it.....good luck on whatever you decide.

having a legal survey and it's cost will take quite a chunk up front

Buy the land. Build later

Yes but worth it. I looked at a lot of ground in KY before we bought our farm. Several track were listed as 160 acres or 120 ect but often would not be much more than 80 or 100 if surveyed. Often the reality company was not exactly sure where the lines were either. Kind of bad when me wanting the property is contingent on having a came on the year round spring coming out of a cave running down the hill and it right around the line.

It was worse In hill county. The old method of measuring followed the contorted ground making for longer distance and equaling more acres. But that is not how it is figured today its strait lines. KY probably gets taxes on millions more acres than there is acres in the state.

Something pointed out in a PM that I should have said from the start is we do not have a house right now. We can’t sell the house we live in now to pay for the new property or new home like a lot of guys do. This is our first shot, and I think the mountain may be too big to climb for our first land purchase and home building.

As bad as I want this land, I refuse to start our marriage out with a poor financial decision that will follow us for years to come

Can you afford to buy the land and stay where you are now? If you can as somebody who is 31 I can tell you that I wish I would have bought a chunk of land, paid it off and got the house later. You only live once and as long as you know how to make money you can always make more. Cant always buy land you want. Just my .02 cents.

If there's a way you can swing it, you'll NEVER regret it! Not sure how old you are, but marriage in the first years is supposed to be tough. Don't do something you absolutely CAN'T, but don't pass it up cuz it's not "easy". My best regards!

I would definitely consider buying the land and putting a used mobile home on it until you can afford a real house, if that's an option where you live.

Don’t think you are the only one in this situation. This exact same dilemma is happening to a lot of young people. The price of land has gone so high young couples just starting out cannot afford to purchase land and build a house.

If it’s the deal you say it is, buy it.

Ever heard anyone say, “boy I’m sure glad I didn’t buy the ground”?

If the land is worth the money, you can’t go wrong. I finally learned my lesson at about 34 years old. I let some sweet land deals go. Always talked myself out of it. Finally pulled the trigger twice. These two properties are my pride and joy.

The prebuilt cabins can be bought for close to or maybe even less then getting a mobile home moved. Get one with a loft and partition off a bathroom then get a septic system and well.

I didn’t think of this earlier, but if you buy the land and pay it off, the bank might allow you to use that as collateral to get the construction loan.

What are they growing? crop land is 150-200 around here. Hay is 50 per acre. Trust me that will pay the taxes and insurance....

Another thing you can count on is if you split the land there is a good chance it will be sold again and to whom? You can live in a pretty small house and build on to it later.

This is exactly what I was thinking, but would not have posted before you figured it out yourself.

You would be putting all of your eggs in one basket. And, if the only way you can afford your dream is to sell off half of it.....HUH? It ain't the right property.

I am in kind of the same situation. Yeah, I'm a lot older, and have the money, but, when looking for land to build on, you need to factor in a lot, such as:

• land, of course
• structure & foundation probably a couple hundred bucks per square foot. even prefab
• well & septic maybe 50 grand
• Where are the utilities? How much to hook them up?
• Do you have a road? and are you able to get your new modular home in?
• permits and other crap most folks never think of will set you back several grand

I don't want to give any advice, since I know so little. I think you are on the right track, now scale down a bit. Keep looking. The right property will show up.

... buy the land ... keep the frontage for yourself for now... cut the back up into acre lots and sell to meth cooks ... charge a tax on their profits for the cover then sell the frontage and buy yourself a couple hundred acres and build a big log house

I've been kicking myself for 33 years for passing up a piece of land. If I could go back and do it again, I would talk to a financial advisor and figure out a way to get it done.

It's a lazy man that can't get his new wife two jobs to pay for a good property

If you think I’m selling the river bottom to the meth cooks you done lost your mind!! That’s my duck impoundment Savell!!

All good points. For a little background my dad is a brick mason turned general contractor turned school teacher. I grew up in masonry and construction and went to school and got an engineering degree. Pops still keeps his GC license updated and builds a house or two here and there. He would be my GC for my house.

I can build a block framed house for around $120 per square foot with current material prices. We built dads latest for $92 per square foot in 2020 before the craziness.

Well and septic will not cost quite 50k. Going rate for a well is 10-15k and the same for the septic. Should be able to get out for 20-30k and it is mandatory that be part of the construction loan unless existing well and septic are at the land.

No public utilities within 20 miles so it will be private well with a septic tank

There is an existing asphalt driveway on the property.

I’ve been doing all the research I can to find a way to make this purchase happen financially. I don’t know that there is a way to do it without being stretched thin

Financial stress is a huge part of many divorce. What's land going for and what's the selling price. I haven't heard enough to tell if it's a really good deal or rather if it that it's a really nice property and just out of your reach and you want it sobits a really good deal? There is a difference

A good deal is land that's selling for 6 k per acre but this is selling for 3700. Vs. I can get it and I want it making it a good deal.

If the first if you get in a bind it can be sold. We looked in 3 states for over 5 years before we got out farm. I can sell it for 3x or more.what I paid 5 years back. That's a really good deal. Some of that is how things have gone crazy in price but the day I bought it I could have sold it foe double the price.

Buy the land!!! Once it's gone it's gone. They don't make land anymore but you can always buy a house. I bought 15 acres out of 55 that was for sale because I wanted a house also. I am so sorry I did not buy the whole thing. Don't make the same mistake I did. You will not regret buying the 45 acres.

Buy it and worry about a house later. Make them set the loan up so principal is paid then interest. It will save you thousands over the loan payback

Our going rate for land is very high in this area. Currently land is selling every day for 20k per acre plus. Before the craziness it sold for 10-12k per acre. The asking price on this land is 7500 per acre

My advice as well.

Buy Dirt! We started buying land in 1985, people laughed at my brother and I said all the negative things you can think of. We are laughing every day, we were young financially strapped, made payments on down payment plus payment. Sold what we could that we owned. Sweat equity, logged ourselves on top of full time occupation. Land contract at 10% interest. 790 acres of our own heaven now. The regret, we had opportunities to buy 1800 acres and passed not enough vision, then 880 acres attached and would go up $200 an acre to get it. Regrets didn't buy it, Buy dirt! One issue is how much does your wife support your passion, mine is my best hunting, trapping partner, and friend!

Sounds like a good deal as you said. How is your living arrangement and can you stay there and swing the payments on the land?
Is your wife willing to live in say a camper for 5 years on the land if that's what it would take. Basically is she on the same page as you in your life goals and dreams? Or is she more inclined to want a nicer h I use and vehicle now. How fare out are kids in the plan, job changes or advancement.

I'm in the buy land camp and you will be amazed at what you can do and how much you can save just growing a garden, making soap, ect... land always goes up it seems.

But your first responsibility is to your bride. Is she all in and are you both willing to stick out the tough lean times for as long as it takes? It's not a question that should be taken lightly but given serious thought discussions and if so inclined commitment.

Talk with your wife get on the same page and make some plans. 6 months one year 3 years 5 years. Now those plans will change and you will probably fall short but it gives you bothe direction. Even when you fall short you heading in the correct direction not wasting time going in the wrong direction.

Get living arrangements lined out that are acceptable to you both. And be sure she is really in and committed not just saying yes to make you happy. Once you have that done and you can afford the land jump on it fast if that's what you both want.

You both have to really want it. People say marriage is 50/50 they are dead wrong. Marriage is each giving 100% so it's 100/100. It's a lot of work so keeping on the same page and good frequent communication.

How many of you all would break into your 401K to buy land. Before your 59 1/2 with the penalty? CoonDagger, like others have said, buy it and eat bologna sandwiches. When you are in you 60s your grand kids will enjoy running around on it.

Have your future bride hok her engagement ring and tell her to get another job at night. Tell her not to forget the importance of the “Me Too” movement and start contributing something to the equation besides what colored flowers to have on the tables at your reception.

….. also, consider getting one of your dads bricks and snaking yourself upside the head real good with it. Then threaten to turn him in for assault and battery if he doesn’t give you the dough you need to carry through with this mission.

I'm lucky to be marrying a woman that contributes a lot to the equation. The wedding is figured out and we will not be putting nearly as much money in it as I had originally thought