Starting a Homestead?

[gamecock320]

Hello, I'm new to the site, stumbled across it today, love it so far!

On to my question/questions:

I'm guessing I'm fairly young on the forums being in my early 20s but I've been dreaming of a homestead since I was 18. I've been working and working, going to school and going to school, and I am finally getting into position to start serious planning on purchasing land. I would like to own land in the Low Country region of South Carolina or coastal Georgia. I've been looking around on the net at different parcels for sale and have found some great places and good prices. I am just now starting to save for the land but I have no idea how much I should save before trying to get the land and financing. I'm looking at 30+ acres. Land isn't cheap around here (is it any where?) and I'm looking at 90k to 110k for the land or at least that seems to be what the places I really love are running.

I'm a goal oriented person. Without a target, I loose focus so I need a number. I'm looking for advice on how much money I should have saved up for, let's say, $100k piece of land, before I start contacting people.

I hope I'm making sense, again, I feel like me and a new born aren't too far away from each other on knowledge of how to go about making such a major purchase.

Thanks for any and all help!!

J.

[Callieslamb]

talk to a mortgage lender to see how much you will need to get into a property. I would put as much down as I possibly could. Usual down payment is 10-20 % for a house. A realtor also will know how much you need down for land.

[WildernesFamily]

If I remember correctly you have to have a bigger down payment for land than for property with a house? We had to have 20% for land and house... I'm guessing raw land would be 20% and up, depending on the lender.

[BamaSpek]

Raw land you can figure 20% down with a good credit history. My .02 is seriously consider trying to save and buy a parcel outright to limit debt. Buying raw land and creating a homestead from it takes alot more time and/or money than I could have imagined. If you have more time than money then you will want less debt anyway. If you have more money than time..... then you will need all your money to pay people to do the work to clear land, drives,water,power,sheds, home pads, house......etc.

If you have a "5 year+" plan then maybe a large parcel, and a land mortgage is possible. If you are looking to live on it sooner maybe 5-10 acres might be where to start.

Just a thought,.

Good luck and you are smart to start living your dream in your 20's.

[Windy in Kansas]

Welcome to the forums with your first post. So glad that you found the site and decided to join in.

Sadly to say but South Carolina is one state that I've not been able visit yet but certainly look forward to it someday. From photos I am well aware that it is an awesome state with plenty to offer visitors. Charleston is naturally on the list for must see places.

As to cheap land there is still a lot of $1,000 per acre or less land scattered across America but you get what you pay for. The dry western Kansas pasture land is still cheap when bought in quarter sections (160 acres) but without decent rainfall you are limited as to its uses. There you can figure about 8 acres per cow/calf pair for grazing. $90,000 or thereabouts will still get one 160 acres of farmland. The area I'm speaking of averages about 19 inches of rainfall per year.

Now while you are saving for a purchase is a good time to read, read, read, as you gain knowledge. Just what you wanted to know on top of school work.

There are also several on these forums that play the Face Book game of Farm Town. I guess you could always farm that way until you can purchase your own actual soil. lol

Anyway--welcome to the forums. I hope that you will visit many of them and enjoy them.

Windy in Kansas

[ronbre]

i wish you the best..hopefully you will get good advice as i know nothing about your area

[agmantoo]

I go into debt for one thing....Land. All other purchases are cash. I either have the cash or do without. Find the land ASAP and try to work with the owner with him doing owner financing. Get a good interest rate and pay the debt off as quickly as possible. Apply any windfall to the debt. Get the land to where it is making a return as quickly as possible. Grow something to sell, lease hunting rights, create something that will give a return. As soon as you get the land paid for try to obtain additional adjoining land and do the same for it. Ultimately get enough land to create ample income to be self sustainable. Then you can consider improvement in creature comforts such as a better home or better equipment to do the tasks. If you are astute in your bargaining you should should find good property in the area you identified. Maybe you could find a tree plantation that will create a harvest within a few years. I have seen a number of properties that the sale of the timber will pay for the land and you would have the land essentially free. I lucked into such a property a few years back. There is plenty of land around the Marlboro county SC area that is most affordable and there is work in nearby NC. I am currently looking at a 45 acre parcel there that is less than $45000. I saw a 30 acre parcel in a less than desirable neighborhood that I could buy for $25000. Trees do not discriminate on location and this would IMO make a good investment. You are young and have time on your side. Do not overlook potential income 25 years down the road as a good investment. With land you don't have to worry about a crooked CEO ruining your investment or some other type of scam. You just have to pay the property tax. The hunt lease will do that. The land will appreciate over time and the trees will keep pace with inflation. Do some research and check out what I have stated. It is a better investment than most IRAs. You should see a double digit return annually. If you are not familiar with the Rule of 72 research it too.

[maidservant]

Yay! Another "youngen" like me! Land up here in NC runs for $10,000 an acre and up, so if you can find 30 acres for $90,000, you're doing pretty well. I also suggest not going into debt and instead paying for it (or at least as much as is possible) outright. Young people like us typically don't have the credit to get the really good interest rates, and if you made the mistake of buying a car and then getting laid off from both of your jobs like me, your credit may not even get you the land.

Anyway, welcome to the boards! Make yourself at home and I hope that our little community here can help ya!

Emily in NC - for now.

[ayleeann]

Investing in a home and land are a good thing. This is a good site for information. Read all the post and ask a lot of questions. Keep your goal in front !!

[gamecock320]

Thanks everyone!!! Sorry it took so long for me to get back with yall, my laptop was stolen and can only really get online at work.

Again, thank you all! I don't want to go into debt any more than I have to. Don't really have the credit to get a lot of financing even if I wanted it. Looks like more saving and dreaming ahead of me but I feel like I got some traction now. Thanks again everyone! I'll still be on the boards, love them!

Thanks!

[Tricky Grama]

Welcome & good luck to you.

Patty

[Michael Kawalek]

We bought our 50 acres for 50% down and a mortgage consisting of four equal yearly ballon payments. I'm happy to say that the mortgage is now payed off and we own our land free and clear. We used a home equity loan off of our "in town" house to make the ballon payments, which we are paying off now.

Price's for land vary widely based on location, improvements, view, access, ect. We bought our land here in the Sierra Nevada for only 3k/acre. We have a so-so view, but can't see a neighbor in any direction. But, it's completely fenced, has a well, and a half finished cabin. An added plus is you can't see any evidence of our location from the public road, so even long time residents don't know we're here.

I would carefully avoid realtors advertizing vacation/resort/getaway type properties. We found our land through an agricultural realtor that understood the reasons we wanted to buy land.

[byexample]

Firstly, you should understand that the lending market today is very different than it was a year or two ago.

Out here a year or two ago you could expect to get a loan on vacant land with a down payment of 10% to 20% of the full purchase price. And you'd have several lenders to choose from.

We have a piece of land next to us that we want to buy. Saved up a chunk for the down payment and started calling banks and lenders. People on the phone literally laughed at me when I told them I wanted to get information on getting a loan on land. Finally found 1 lender out of 20 or so that I called that was willing to take an application. All we needed was a 50% deposit! 50%!!! And the rate sucked. I've seen credit card rates lower than what they were quoting.

So it's going to be hard to call lenders and get good information on what your options are going to be. My advice is to save as much money as you can, pay off all your debts, and take steps to get your credit score as high as possible. The more money you can put down the lower your rate is going to be and the more likely it is that you'll be able to get a loan.

Join a local credit union and start doing as much business with them as possible. I think credit unions are going to be more likely to help out their younger customers, assuming you have a good credit score.

The other option is to look for land that the owner is willing to carry the note on. More and more folks selling land out this way are now willing to carry the note themselves because that's the only way they are going to be able to sell their land since the lenders aren't lending money for land.

Best of luck to you. I think you are very smart to be thinking along these lines and asking these questions early on in life. I wish I had been that wise.

Be well!

Kind regards,

Patrick Harris
http://ByExample.com

[TnAndy]

I've bought and sold quite a bit of property over the years....wife and I bought our first lot and built our first house ( ourselves ) when we were in our early 20's.......here's my 2 cents:

First....save ALL you can....if this is really a dream to come true, live a frugally as possible and squirrel away a decent down payment ( say 10% ) AND enough MORE to make payments should you "step in a hole" ( illness, job loss, etc ) along the way so you don't loose it.

Second:

Assuming you live in the area you want to buy in, do your own detective work instead of using a realtor......most of them aren't worth the bullet it would take to shoot them anyway. Spend every free Sat/Sun driving up and down country roads in the place you'd like to live....stop and talk to folks, and tell them what you're looking for. You would be amazed how much land is out there not currently listed for sale that can be bought simply by asking......and how you can buy it with OWNER FINANCING if you ask. Many older folks have land just sitting there, and if they have few CD's right now in the bank, they are getting a whopping 1-2% return on their money, and if you would pay them 5-6-7%, plus spread the payments out over 10-15 years so they don't get a BIG income tax hit in one year, it can be a win-win situation. We bought our land that way, and my BIL did the same when I told him this......

Go to the county tax office, and look up who owns land if you can't find out from a neighbor, then write them a letter offering to buy.....worst case, you spend a little time and a stamp.....best case.....you find your dream property.

THEN: STUDY all the pitfalls of buying property before you plunge headlong into a mess.....study easements, right-of-ways, learn how to use the county records for any liens, or back taxes owed....AVOID "contract for deed" deals ( IMHO ).....they often end up just being rent and you never get the property.....BUY IT....have a DEED IN YOUR NAME filed at the court house, along with a DEED OF TRUST ( if you are financing ) so it's an "up and up" deal......and so on.....become an informed consumer.

And be especially careful if you get into an estate property......it can be a HUGE mess if the owner(s) died, left no will, and the property is often now "owned" by heirs, and often one, or more, of them is also dead, so it passes to kids of heirs.....and so on.....can be a HUGE mess trying to deal with 2-50 people ( and every single one will have a different opinion as to what the place is worth )..... unless a will transferred the property to a single heir. avoid it IMHO.....usually not worth the effort......you run up on an estate property, time to get professional help.....or just keep looking.....

[farmerbrian]

I think there is a decent amount of twentysomethings on this site, im 28.

As others have said, if you have the patience consider saving up the total amount to buy your land outright. Thats a big if, i know. We bought property before thinking of homesteading at all, but even if we did have that goal in mind I doubt we could have waited.

I dont know if your still in school or not,are you pursuing a 4-year degree? Perhaps you can move to or near a city for a few years and save up for your land purchase. Rent a cheap apartment, get a decent paying job (not necessarily something you love doing), live a self reliant lifestyle to the greatest extent possible, and save up your 100K. Then take your city money out to the country and buy your dream property. If you live modestly and have no dependents you should be able to save 100K in 5 years or less even, just depends on what kind of income you can achieve and how strictly you stick to your savings goals.

Your time spent in the city can be used to read, learn, read some more, search for that property.....not wasted by any means. If you find you cant stand the city then just move and find another way to get your property, nothing is tying you down (like a mortgage).

Brian

[kruizeag]

I started farming on my own at 31. I spent my life on farms and working on them. To help in buying land, I went and gave Uncle Sam 8 years of service for a VA loan opportunity. Even though I farm on my own now, I don't own any of the farm land. I barter and rent it. I have 3 different landlords. Advantage: I can put my money into equipment and practices. Then when the time is right, I can use the equipment as collateral for loans on land if needed. It will show I am an established farmer and that goes a long ways with places like Farm Credit. I know many farmers in the east coast that farm this way. Some have been doing it for 20+ years.

[firegirl969]

Welcome to the forum! I got a phone number for you to check out a 55 acre tract and possibly some other large acre tracks. I will PM that to you. With the poor condition of the economy is this area, you may be able to work out owner financing with a down payment. Things are stagnant here. Blessings, firegirl