WWYD?? LAND OR PAYOFF last of debt???

[myheaven]

We have an investment we are going to be selling off on Tuesday. It will bring us close to 30,000. We planned at first to pay off our 3 last debts. 2 very small credit cards and our tracor. These are all the debts we have besides our house and some medical from our sons fall back in 2009.
Then this little devil started talking to me about a month ago. I told DH what said devil said lastweek and he has sided with the devil. Devil said" you should take that money and buy land, you guys have wanted to move for over 4 years and can put alot down on the land and have a very low payment and sell the shoe box you live in now" Dh is in agreeance. We are prequilified for land loan. Land payment will only be 150 a month. Our house was just appraised for 132,000 before the bathroom remodle and addition of other bathroom, utility room, finished basment. Market price is over 150,000. We have 8.52 acres all organic and 5 acre fenced for all animals.
We will make close to 100,000 if we sell this house.
Our house is very marketable and we have reltors waiting in the wings if we choose to sell. In our area what we have will sell fast. The appraiser was even wanting our house.
We have to have something else in line before we sell our house. We have 7 kids and to keep this place in show room condition is not going to happen with out a place to hide out during showings.
We have possible found a strech of land 20 acres in the area we like and close to dh work. Plus the price we want to pay. Just have to look at it title search and all.
If wepay off the debts we willonly have the house left to pay guarenteed. So we will have 600.00 in our pocket a month. if we buy the land we will have added about 200.00 pm with new debt.But if we sell our house this summer we will come ahead about 40,000. After selling fees putting up a new small house and barn and paying off loans and be 100% debt free.

If you were in my shoes what would you do? Entertain the devil? Or tell him to shut up and try to convince dh that we should just pay off the last debts and keep on keeping on? We have to sell this house this house in the next 3 years I would rather do it sooner than later while we have the chance and everthing in still in good shape.
Could we take on the extra 150 per month? Yes easy. We could even sell the house for much less than market and still be ok. We purchased the house way under value and put alot of blood sweat and tears into this place. Took it from an eye sore and turned it into the "country dream".

If you were in my shoes what would you do?

ETA: if we didnt end up selling the house due to what ever reason after the purchase of the other land. We could rent it easy for over 1,000 a month and make several hundred a month on rent.

[salmonslayer91]

personally it sounds like your "country dream" has been alot of blood sweat and tears if (((i))) were in your position i like the idea of starting fresh with 20 acres to do with as you want (((i))) would than rent the current property yes real estate can be a risky investment but it seems that the rent would pay the mortgage on both properties but again living completely debt free is a tasty solution it depends on what is more important living free and clear or starting fresh (alot more blood sweat and tears )

[myheaven]

We want more land and start from scratch.We only had4 kids when we Purchased this house.We are about to add another. We both want more land badly. We want new house just as bad but, want to build it. We are at the end with this house. We cant do any more with it. For our family that is. It was alot of blood sweat and tears. We turned beach sand into very productive rich brown/black soil. Noting into eaden. We are still great friends with the realtor who helped us buy this house. She is just waiting for my dh to make up his mind and agree to sell it.
We are all for and eager for a new adventure. We want to owe no man nothing. Land free and clear is our ultimate dream.

[Narshalla]

This is a hard one.

Normally, I would tell you to pay off the debt, first thing, no question, but in your case . . .

I'd have to say that you don't have a dream, what you really have is a dream with a workable plan -- or as it's otherwise know as, a workable goal.

I think it would be a good idea to sit down with the realtor and find out just how much you will really make if you sell now. Make sure she factors in any taxes, inspections, her commission, and anything else you would have to pay.

As a big for instance, if you sell your current house for 150k, the commission (hers and the buyer's agent) would probably be about 9k. Then, have you lived in your house long enough so that you don't have to may capital gains taxes on the money you will realize from the sale? If not, then that will take another big bite out of your profit.

Does your city/county/state have any little quirks in their laws that will cost you, as a seller, money? They might, I don't know.

Those are some things to think about -- hope this helps!

[michiganfarmer]

I would buy the land

[geo in mi]

If your "lttle devil" is spelled with a capital D, then I would run away from the idea, until I knew differently.

geo

[Randy Rooster]

Now is the time to buy land just about everywhere because prices are defalted- if you wait they will probably go up. If you can sell your current place now at a good profit I'd go for it.

[ErinP]

Now is the time to buy land just about everywhere because prices are defalted

Not even remotely true in Nebraska, the Dakotas, Iowa, Kansas or Colorado! Prices are the highest they've been in decades!

However, that said, I'd go with the land buy, too.

[CJ]

My advice (FWIW) would be to pay off the debt, then apply your surplus $600 a month to paying off your mortgage. As long as you have that mortgage (and unpaid medical), you are not debt free.

[Wolf mom]

I think you have to do a pro/con list.

Truthfully answer: why more land? Is is for investment only? What can you do with more than what you're doing with 8 acres? Land doesn't involve a house - what about that cost? Is your income guaranteed? How many years before "more land" becomes a burden? With gas and most costs rising, will "more land" still allow you to do other things? Etc.

I'm not saying don't buy it, just think it through carefully. Then if you end up buying it, there'll be no regrets.

Also, remember that thanks to the new healthcare bill, you'll have a 3.8% sales tax on the sale of your current home.

[suitcase_sally]

Originally Posted by myheaven

If you were in my shoes what would you do? Entertain the devil?

Ah, The best laid schemes of mice and men. Go often askew, ... they call him the devil for a reason.

[crunchy_mama]

dp oops!

[crunchy_mama]

I am very debt averse and big Dave Ramsey and Clark Howard fans. I wouldn't consider buying a house unless it was 25% or less of take home pay on a 15 yr or less mortgage.

I would want to know what the plan was on living while you built a house is the debt for a house included in that price. How stable is income and could it be replaced?

[oregon woodsmok]

Another option is to pay off all the debt, put your current house on the market and buy more land when the house sells.

The buy land now option appears to work well from the information you've given.

I seriously recommend that you not rent your current place. Tenants cam be hard on a property and they generally will not take care of landscaping and you have 8 acres for them to destroy with neglect, stack trash on, and spray poisons to lose the organic label. You might get lucky and get good tenants who take good care of the place, but it is impossible to tell by looking at people what they will do with your property. If you get unlucky, your tenants can destroy the value of your property. You don't have any landlording experience, so you are exactly the type of owner that the trash tenants are looking for and hoping to trick.

Property management companies generally do not care what happens to your property, so don't think you can depend upon a manager to take good care of you.

[Danaus29]

Well, you do have a decent sized house, land enough for critters and a garden, fences installed, on the edge of being debt free.
My opinion, since you are currently allowed to have animals and while not enough land to be self sufficient it is enough for your critters and a good sized garden, would be to pay off the debt. You don't know what tomorrow has in store and the debt being gone is never a bad thing.
If you didn't have land and had to move so you could keep critters (my situation) I would say buy the land and move.

[highlands]

Do the numbers. What makes numerical sense? Land is selling for lower prices and mortgage rates are low right now.

[bluemoonluck]

Okay, let me know if I'm understanding the OP or not....

If you sell the house you're in, even with buying the new land and putting up structures there you'll STILL come out with enough $$ to pay off those debts and be 100% debt free??

If I'm reading that correctly, then that is what you should do. If your debts will get paid off either way, but with the sale of your house you also get a new and better property out of the deal, than I would say listen to the devil and buy the new land.

If I'm reading it wrong, then its a toss-up as far as I'm concerned.....

[myheaven]

Originally Posted by bluemoonluck

Okay, let me know if I'm understanding the OP or not....

If you sell the house you're in, even with buying the new land and putting up structures there you'll STILL come out with enough $$ to pay off those debts and be 100% debt free??

If I'm reading that correctly, then that is what you should do. If your debts will get paid off either way, but with the sale of your house you also get a new and better property out of the deal, than I would say listen to the devil and buy the new land.

If I'm reading it wrong, then its a toss-up as far as I'm concerned.....

+You read it correct plus we will have 40,o00 cash in hand after sale of current house. We need to reappraise the house with the rmodle and adding bathroom finishing basment house will easly sell for 189,000 Our relator is only wanting 1,000 from us. She is doing it as a favor. Tha land is for sale by owner. So no buyer fee thing on his end. We have a lawyer friend at church as a favor will look at all deeds and what not for a small fee. The land has alot of hard wood and my neighbor owns a lumber company we can sell off the wood that needs removed and make some cash.
We need more land. Our profitable operation can not grow larger unless we get more land. I raise replacement feeder steer. I milk goats feed bottle babies and sell them off.
our income is very stable. Our housing costs are only 5% of our income.

We teach Dave Ramsey and are devout followers. We know its pay off debt payoff debt. we have paid off get this 200,000 in the last 5 years EVEN with 2 kids in ICU in 2009 (their medical care is not included in the 200,000. One who needs on going medical care that will never be paid off. And is now disabled from his fall and needs lots of services. So we pay his bills every month and keep on keeping on. BUT the fact is we need a new house. Have needed one for 4 years we have been here for 9 years. we have redone everything here. Only part of the frame is original.
We live in a military area and know alot of military people who would and want to rent what we have to get out of the housing complex. We know they would take care of the house. We would still be in the same town to keep an eye on the house and people. WE know the horrors of renters. Dh was a navy bratt and they rented their one house and the people destroyed it but they were 27 hrs away and then stationed in another country.

Dh wants another place set up before we put this one up on the market. He dosent want us in limbo. Not to mention their is no places for rent around us.
Plus we have baby #8 due on aug 3rd.
Our house is small and to have what we need on a daily bases the house is cramped. Our dineing table takes up our whole living room. Our kitchen is too small to have a table in their the size we need.
We planned to do an addition in 2009 but our son fell the day before we broke ground on the additions and remodle project so it has put us almost 2 years behind.

WE could pay off debt and use the equity in the house to buy land but then it makes us have to ask for more money for our house and we dont like that. Not to mention that is 100% debt and lots of fees for the heloc. Dont like that even more.
We realy like the idea of everything paid off but the house, but how long will the door be open for selling it?
Either way we go Its a good out come.
To put the house up on the new land will be paid for with cash. NO DEBT!!!!!! I hate debt. Dh is with me in the whole no debt thing now. THANK YOU DAVE RAMSEY!!!!!!!!!!!!!!!!!!!!!!!!!

[myheaven]

Originally Posted by suitcase_sally

Ah, The best laid schemes of mice and men. Go often askew, ... they call him the devil for a reason.

I fully agree. To buy the land leaves us open for Murphy to get us. We are in desprate need for a new house and more land.
We wil figure it out by Friday when the money gets to us. If we pay off the debt the left over will give us our full emergency fund also.

[bruce2288]

If you get a new mortgage on the house you build, I believe the 20 acres it sets on will be attached, unless you specifically carve out the home site in the mortgage and collateral agreement.