Bit of a dilemma, need some advice

[mateosbaby]

Hello all-

My dh and I want to get some land and be self-sufficient. Worthy goal, right? So we are at a crossroads in trying to figure out how to get there.

At the beginning of this year, we sold our house in WI and moved to MN to be with family. We have been staying with my grandparents, which is getting old very quickly... We have 4 children and a mound of pets (cats, fish, guinea pigs). We also homeschool. My dh has a job, but we feel it's temporary, especially now more than ever (that's a whole other story). We have an offer on a short sale in a small town south of the Twin Cities, which we offered on April 1. Supposedly we will be getting an update or a yes/no answer early next week. If it's a no, we think it might be best to rent for a year while we build up money to buy the land and skip the house. Problem with that is it's so much more expensive to rent than to pay a house payment... We also have debt that we are trying very hard to get rid of as fast as possible. If we are renting, that means a lot less money going to the "land" fund. If we do buy land but have to finance it, there is another payment. Also for building a house on the property, again, we'd have to finance it somehow.

I hope I'm making sense, but we are just confused and trying to figure out the best way to get there, the fastest and most logical way possible. Please let me know if I missed some huge consideration. I have been sitting here talking in circles with hubby for awhile... LOL

[pancho]

Originally Posted by mateosbaby

Hello all-

My dh and I want to get some land and be self-sufficient. Worthy goal, right? So we are at a crossroads in trying to figure out how to get there.

At the beginning of this year, we sold our house in WI and moved to MN to be with family. We have been staying with my grandparents, which is getting old very quickly... We have 4 children and a mound of pets (cats, fish, guinea pigs). We also homeschool. My dh has a job, but we feel it's temporary, especially now more than ever (that's a whole other story). We have an offer on a short sale in a small town south of the Twin Cities, which we offered on April 1. Supposedly we will be getting an update or a yes/no answer early next week. If it's a no, we think it might be best to rent for a year while we build up money to buy the land and skip the house. Problem with that is it's so much more expensive to rent than to pay a house payment... We also have debt that we are trying very hard to get rid of as fast as possible. If we are renting, that means a lot less money going to the "land" fund. If we do buy land but have to finance it, there is another payment. Also for building a house on the property, again, we'd have to finance it somehow.

I hope I'm making sense, but we are just confused and trying to figure out the best way to get there, the fastest and most logical way possible. Please let me know if I missed some huge consideration. I have been sitting here talking in circles with hubby for awhile... LOL

Rent and save up. You need to get rid of all debt before even thinking about buying.
It isn't more expensive to rent than to pay on a house. Renters do not pay taxes, insurance, and upkeep on a rent house. Really they do by paying rent but don't forget to add all of these and other things to the price of owning a house.
People get in too much of a hurry to buy. Sometimes they have not added up everything it costs to buy and keep up a house. Just the housepayment isn't everything.

[ChristieAcres]

I would simply do a Lease Purchase Option. Get a good Agent, who will work with you to find what you want. In this economy, you could find a great place. Have the Agent do the searching, narrow it down for you. As an Agent in WA State, I see Sellers working with Buyers in all situations. Another option is to get Seller Financing. I negotiated a payment HALF the payment of any mortgage for this property when we bought it. I just did Seller Financing for one year, then we secured a mortgage. You can do different lengths of terms, with low payments, while you pay off debts. Wasting not a dime of your hard earned money. I would not rent if I had an ability to buy in this market. In many areas, it IS MORE EXPENSIVE to rent than buy. That is based on current interest rates and sales prices.

The OP has owned a home, so is aware of the expenses.

[rambler]

Many people here are pretty fiscally conservative, so you will get that sort of save save save answer.....

The problem I see: 1 income, which is considered temporary, they don't own a house at this time so no equity, but have debt - which I assume means no real usable savings fund of any size to draw from.

So - where do the downpayment & paymentsd for the land, or land & house, or land, and then building a house, come from?

It seems very premature to me. Shouldn't there be a more stable job, most debt paid off, a downpayment saved up - before one can plunk down the staring cash & continue to build?

But, I'm one of those conservative types, so don't just go by me.

Housing a bit south of the Twin Cities is some of the most expensive in the state, if hubby had a good job sure - but, if you are mobile & could find work in a bit more isolated area on MN, you can pick up a house & shed & 5 acres for $120,000 or less on a gravel road & that might be a better start - don't know what deal you are working on, maybe you found something better than I am saying.

--->Paul

[ChristieAcres]

The OP hasn't informed how they qualified to make an Offer on a Short Sale. Banks are involved and one of the requirements is a Pre-Approval. That requires a Bank confirm the Buyers qualify for a loan, which also means, there must be a downpayment...

So, we know a home was sold, and a Short Sale Offer made. There must have been a little from the sale to put down for the purchase of the Short Sale.

Being debt free is important, but not all achieve it before they buy a home. It is better, of course. But if you could buy a home, save $300/month, put that money towards that debt, would you rather rent and pay $300 more?

BTW- I am conservative. We bought a 6.68 acre property for the price of bare land and what came with it? A stick-built nice shop DH runs his machine/welding business out of, a separate stick-built office for my real estate business, a double carport w/an insulated storage room, and a 1,500 sq ft remodeled double-wide mobile home with a 7 yr old comp roof. Saving 50% of the money we would have had to pay monthly, but negotiating such a low monthly payment, allowed us to qualify for a good loan after one year. A gal I know here locally, put $3,100 down and bought 2.5 acres w/a mobile home on it. The great thing about mobile homes? If well cared for, updated, & comp roof? There is no rush to build. When you do, you can get a remodel permit much easier where I live. It is a win-win, and your property taxes are lower, even if you remodel the inside/outside and transform it.

[rambler]

Pretty much anywhere in southern MN you need an expensive mound system for septic; shallow wells are not allowed for drinking water; mobile homes are not allowed except for mobil home parks and rarely for kids to live on the home farm; anything resonably close to the Twin Cities is going to be a McMansion type of development where you need to build a fancy house. While the building frenzy of that area has slowed, the zoning & regulations are well in place.

I understand your angle lori & I don't disagree with you. But for the area they are looking at - it's not going to be easy to go 'cheap backwoods' and live under the radar in that part of this state. In Minnesota you do not rehab a mobile home! They are far to cold.

I agree we'd really need to know much more to make informed opinion, but I never feel good about asking for more details on these sort of threads. The OP said as much as she said, and we have to go from there....

Really the only red flag I really see is the temporary job thing - it has tto be very hard in this ecconomy to plan such a major purchase with only one income & that one to be labeled 'temporary'. If the job skills they have are in demand in this ecconomy & getting/ keeping a good job is not something to worry about plus they really do have a nest egg from the sale of their home, then that erases a lot of reservations.

The rest of my opinions and conclusions I jump to are really not important to the OP. But, this forum would be pretty dull without such things.

Owning might be cheaper, but if the job falls through & nothing else comes up, 4 kids, a mound of pets, and a house payment on top of some old debt can quickly cause a lot of havic that remains on a person's record for some time........ While breaking a rent lease will be more of a blip if the unfortunate worst happens.

Cheaper is better, but not always.

I hope you are right, and I am wrong. I really do. Hopefully it is helpful to see different sides, different thoughts on all this.

--->Paul

[ChristieAcres]

I wish the OP and her family the very best in whatever decision they make. Their area sounds very challenging. I also hope the job situation is resolved so that stress is taken out of the equation.

We ourselves are self-employed, so completely understand uncertainty in future earnings. That is our way of life. Fortunately, I am not without employment options. For that, I am very thankful.

Paul, your description of Southern MN left me grateful we were here. Yes, in our community, with high property values, high property taxes, in our eclectic neighborhood mix of wonderful people (we have neighbors who are below middle class, middle class, upper middle class, and also millionaires). Just up our driveway, you can take a picture of the Olympic Mountains rising above the Hood Canal. There is no view from our property, except on the edge, you can see the Hood Canal through the trees. We are five minutes from the Hood Canal waterfront. Yes, we are off of a gravel road, which is a private one, and our driveway is gravel, too. I'd call "town" a micro-spot, you could blink and miss. Yet there are a lot of wealthy retired people here (they didn't allow commercial development...). We paid the same for this property as we would have for 2.5 acres with a shack on it, no shop, no carport, and cleared of all 2nd growth trees (we have a lot). What made it possible was this mobile home, not a selling point here! Oh, not "under the radar" either. Everything is to code, our place qualifies for VA/FHA and Conventional Financing (permanent foundation), well insulated, sheetrocked, double paned vinyl windows, a peaked comp roof (7 years old), and a large back deck. The only thing we built here, was attached to our separate office building, with separate roof, that adjoins one end of our mobile home. It has a new enclosed porch. Our septic system is Gravity, grandfathered in, working perfectly. Our well was permitted, inspected, and approved. No outhouse hidden out back anywhere, LOL. It is legal to move mobile homes onto a property here, but there has to be an approved Septic, Well, and it has to be Permitted. Just thinking how nice it would be to be in a truly "under the radar" type place...hard to find these days!

Absolutely, always interesting to read what others think.

[jwal10]

My son and I bought a 2.2 acre place at Hebo, Oregon. Bank repo, old single wide mobile (junk), 1000 gal septic and spring. All permits were issued in 1978. 14'x20' insulated garage/shop, gravel drive all in. Fenced. Tore apart old mobile, cut the frame and built a 14'x20' cabin on it (under 300 sq ft no building permit and not taxed) Enough frame left to build 2 more. My son lives there now. $2500 down, 5 yrs at 4 percent interest. Paid $21,000, $350 a month. They are out there....James

[jmtinmi]

The OP original thread mentioned fianancing land. Here in MI is is nearly impossible to get bank financing on just land.

Just a data point to throw in the mix.

[Hoop]

There will be massive challenges trying to feed six people on one income. And it sounds like that one income is modest....and far from long term.

I could only suggest both of you enter the work force. Every bit of income helps tremendously.

Two incomes will move you closer to your dream much quicker than one.

[Rick]

Originally Posted by Hoop

There will be massive challenges trying to feed six people on one income. And it sounds like that one income is modest....and far from long term.

I could only suggest both of you enter the work force. Every bit of income helps tremendously.

Two incomes will move you closer to your dream much quicker than one.

To me it is very important to spend time with those kiddies and oversee their education. If you can do it, tough it out with the grandpatents while you pay down the debt.

What is making the new living arrangement get old so soon?
How long will it take to pay off the debt?

Good luck making such vital decisions.

[edcopp]

at least most of us who are older.

Let me define. You want to run before you have learned to walk. I know from experience.

Here is my suggestion. Rent a house with a yard. Get a house that is large enough for your family. Practice your gardening skills there. Let us know when you have gotten to the point where you no longer need a lawnmower. Make this activity a part of your homeschooling activities.

Be sure that your children learn about nutrition, and the cost and effort needed to grow food, and feed for their animals as well. Be sure that they learn how to keep books concerning this and other activities. They might benefit from learning to balance a checkbook as well.

Have them learn how to determine which animals are producing some sort of profit, and which are not.

Now for the grandparents. Get out of there as quickly and gracefully as possible. They have been good enough for too long now, and even if they do not admit it they are most likely tiring of the situation.

As for mom and dad. Learn that CASH IS KING. There is no other way to say this. Money that needs to be accumulated needs to be in a usable form. This is called cash. Start cutting costs, and accumulating cash.

Do not consider your rent as lost cash. This is an expense that is necessary and will always be necessary in some form or other. Right now your grandparents are providing for this expense. They may not always be available, so your family needs to learn to provide this (before you try to run).

There is no sense in attempting to buy land on time payments right now. Did you notice that this is the first time that land has been mentioned. In many parts of the country the price of land is going down. I would wait and see what happens next. Remember that cash is king.

So when you learn some new habits and save some cash you will be better prepared to look for land.

Let us know when you are able to sit at the kitchen table some Saturday evening and count out $10,000 in cash. You will then be in a position to look at things a lot differently.

Welcome to the forum

[FunnyRiverFarm]

I agree that it might be best to try to work things out with the grandparents for a while...at least until your Husband has stable more employment.

It may not be practical for you to enter the work force due to the cost of child care but there may be things you can do from home in your spare time (baked goods, homemade soaps, etc.) to raise a bit of money...at least to pay for the pet supplies if you cannot bear to part with them.

[where I want to]

The trouble with buying somethign with an iffy job, unless you have enough captial to pay it off, is that you may lose whatever you put into it if there is no job and you can't make payments.
If, on the other hand which I think is your case, you have the money from the sale of the old house to buy a new one, then I would spend time looking for that land with potential -somewhere you can put your sweat equity into.
Re: renting or staying with grandparents- if your grandparents are kind enough to support you all, then that's a no-brainer. It's simply your choice as to stay or go. I'll be that it's as old for them as for you. So you could try to negotiate some compromise with them with whatever causes problems and maybe (here's a thought) pay them rent.

[RiverPines]

You need a down payment and maybe closing cost. Thats the most important or you wont be financing anything.

We bought our foreclosed property and our mortgage is only 200 per month but we had to have a 10% cash down-payment first for a 36K loan. Our dream was land with a shack in the country. We always said gives us a swamp with a shack and we will be happy!
LOL, we got 3 acres on the river with a marsh and a shack! :banana02:

We lived in a low class mobile home park before we bought this place because it was cheaper than renting anything else. Thats how we managed to save what we needed and to pay off debts. It took 10 yrs to save and prepare to do it all right. Went with traditional loan through our own bank. No load broker and weird interest only or 80/20 loans. Hired our own inspectors and such to test the well and septic and other major things so we wouldnt get screwed and new exactly what we were buying. We hired our own buyers agent to we had someone working for us to get us the best deal.
It took time and money but we have our dream and I love being a river rat. I grew up on a river so I felt if I was coming home.

Do what ever you need to do to get the dream you hope for.

[texican]

Obtaining and moving to 'the land' is a veritable money pit. Everything costs money... something goes wrong, you have to shell out cash to get it fixed (compared to renting).

If you're having troubles now, and are in debt, it'd be extra hard to make a go of buying some land. If there's only one bread earner, and that's iffy, I'd put off the land, till you get a nest egg. If your finances are unstable, and you sink whatever you have into some land, and then the finances disappear, you could lose everything.

I'd cut all expenses and all addictions (alcohol, tobacco, drugs of any sort, all forms of entertainment that cost money), work extra hours, an extra job, whatever it took, to get out of debt, and probably think about no more children till you get comfortable. I know that's an unpopular thought, but if you're having troubles, extra mouths to feed won't better your situation. Once you have land paid for, out of debt, and are getting ahead, 'extra' children could be an option.

If you're not making enough money, find work that pays more. Go to trade school. Night courses. Apprentice on weekends with tradesmen, whatever it takes to try and get ahead.

[mateosbaby]

Originally Posted by pancho

Rent and save up. You need to get rid of all debt before even thinking about buying.
It isn't more expensive to rent than to pay on a house. Renters do not pay taxes, insurance, and upkeep on a rent house. Really they do by paying rent but don't forget to add all of these and other things to the price of owning a house.
People get in too much of a hurry to buy. Sometimes they have not added up everything it costs to buy and keep up a house. Just the housepayment isn't everything.

Sorry to say, but the house we offered on is $122,000, or around $900 a month. The cheapest we can find to rent on a 1-year lease is $1200, but it's not easy to find a 3-bedroom apt that will also allow all our pets. We owned a house before, in WI, hence the pets. We sold that one and moved here to MN and have been trying to get out of my grandparents' house ever since.

[mateosbaby]

Originally Posted by rambler

Many people here are pretty fiscally conservative, so you will get that sort of save save save answer.....

The problem I see: 1 income, which is considered temporary, they don't own a house at this time so no equity, but have debt - which I assume means no real usable savings fund of any size to draw from.

So - where do the downpayment & paymentsd for the land, or land & house, or land, and then building a house, come from?

It seems very premature to me. Shouldn't there be a more stable job, most debt paid off, a downpayment saved up - before one can plunk down the staring cash & continue to build?

But, I'm one of those conservative types, so don't just go by me.

Housing a bit south of the Twin Cities is some of the most expensive in the state, if hubby had a good job sure - but, if you are mobile & could find work in a bit more isolated area on MN, you can pick up a house & shed & 5 acres for $120,000 or less on a gravel road & that might be a better start - don't know what deal you are working on, maybe you found something better than I am saying.

--->Paul

We have been saving up to buy a house, so we have all our ducks in a row. Our original plan was to buy a house close to his job, and then in a few years, after the debt is paid off and we've saved again, to buy the land, then to get out of Dodge, so to speak, and go full-time on our land, building something small and adding on as we go. The land does NOT have to be anywhere near the Twin Cities, but we do want somewhere in MN or western WI. 1 income is not temporary, this is permanent and always has been, and our lender knows this. We have awesome credit, so the lowest interest rates possible. By most American's standards, we have barely any debt: my 2 student loans (one is getting very close to getting paid off), and 1 car loan, and my dh's student loan which his parents are paying for him.

[Patt]

I think you should really consider a different area. Where I am in Arkansas you could rent a decent house with land for $700-$800 a month. So unless you are just tied to MN for some reason I would look into an area where you will have more freedom to do what you want and you can do it cheaper.

In order to homestead full time you will need to be debt free of course. But for now while you are trying to get to that point I agree with whoever mentioned the lease to own option, in this economy there are more sellers than buyers so I would definitely float that idea to your realtor.

I hope y'all find something!

[mustangsally17]

If the employment situation is rockey you might want to stick it out at the grandparents until you are more stable. The initial expense of even moving into a rental is costly these days and all that money would be lost if the job goes down the drain.