Farm financing hoop jumping

FarmboyBill · #1 07/24/12, 08:32 PM

Ive got a bank which will loan 100% on the farm I choose up to around $65 000 max. BUT they wont loan a dime on a double wide trailer.
I checked at my bank, and they WILL loan on double wides. They have a note for trailers 1 to 3yrs old, a note for trailers 3 to 5yrs old, and a note for older trailers that are permanently fastened to the farm and the owners pay taxes on it along with the rest of the farm. BUT They want 20% down. I checked another bank and again they didnt loan a dime on mobile homes. Then I checked with a big bank. They would loan on mobile homes up to 80% of the APPRAISED value. So, If I could find a place that had a barn and outbuildings, without a house on it, and I saw several that way last Sat, and I could find it appraised low, and then find a small double wide also appraised low, I might come near the mark of nothing or little down.

So, thats where im at.

Sawmill Jim · #2 07/24/12, 11:08 PM

Sounds like you are still up the unsanitary tributary with out proper means of propulsion to me .

VinnyP · #3 07/24/12, 11:35 PM

Most banks won't loan money for mobile homes...

A lot of them, however, will write loans for "trailers" as long as there is a foundation (slab), the home is "permanently" attached to it, and you own the land it's sitting on.

It may be worth while to dig a bit deeper w/ the lender you already have... especially if it's a smaller bank and you've had face time w/ one of the officers.

At least that's the case around here.

FarmboyBill · #4 07/25/12, 12:10 AM

Which way should I dig Vinny.Ive talked to him. he says only a house with modest restoration needed will do for a loan.

VinnyP · #5 07/25/12, 02:40 AM

Apparently sleep is going to elude me tonight

As it was explained to me by the VP of my, local, small-town bank; their investment criteria basically revolved around two things:

1) The "asset" was permanently affixed to the land (ie, nobody is going to drive-off w/ it when the mortgage comes due). Anything w/ an axle permanently affixed to the frame will, most likely, not qualify.

2) Construction standards meet local code (this will probably be the most difficult part if you're looking at older dwellings).

If you find a double-wide that meets these criteria; you stand a decent chance of convincing a lender that it is a "modular" home instead of a "mobile" one.

It's been a few years since I've had to deal w/ financing any manufactured or modular homes; so I can't really attest to the current validity of all this. The nice thing about using a smaller bank, though, is that if you can convince one or two people as to the sagacity of the investment; you may get the loan regardless of how much they have to stretch their policy.

fordy · #6 07/25/12, 07:31 AM

Quote:

Originally Posted by FarmBoyBill

Ive got a bank which will loan 100% on the farm I choose up to around $65 000 max. BUT they wont loan a dime on a double wide trailer.
I checked at my bank, and they WILL loan on double wides. They have a note for trailers 1 to 3yrs old, a note for trailers 3 to 5yrs old, and a note for older trailers that are permanently fastened to the farm and the owners pay taxes on it along with the rest of the farm. BUT They want 20% down. I checked another bank and again they didnt loan a dime on mobile homes. Then I checked with a big bank. They would loan on mobile homes up to 80% of the APPRAISED value. So, If I could find a place that had a barn and outbuildings, without a house on it, and I saw several that way last Sat, and I could find it appraised low, and then find a small double wide also appraised low, I might come near the mark of nothing or little down.

So, thats where im at.

.......................You're IGnoring the obvious solution...........Confine your choices too land with owner financing !!! Forget the bank(s) and find a property that the owner will carry the paper on ! , fordy

equinecpa · #7 07/25/12, 07:52 AM

I read your post and am wondering why you would buy a property without anything down? I know you probably have all sorts of reasons like the payment is less than my rent, rent has no equity etc but the reality is owning a property brings with it, its own set of expenses. Do you have money set aside if a well pump goes out, how about an uninsured roof blowing off, a/c or furnace repairs? Oddly enough the very next thread on this board deals with those unexpected expenses: "What do you do", so yes though unexpected they will come and at the worst times. I love listening to Dave Ramsey he offers great sound financial advise -he recommends at a minimum a $1000 emergency fund.

0 down financing is part of what got this country in the mess it is in now. Debt is not the solution. Getting out of debt is.

I'm a CPA and financial advisor so I'm speaking from experience here not from a soap box. I've seen many people buy a property whose payment they could "afford" but then as soon as they had the property they ran their credit cards up due to all the unforeseen expenses of owning a property. Then comes years of financial struggle and/or bankruptcy.

I'd prefer to see a lease to own type of arrangement where you build equity as you go along. I've seen more of these type of arrangements work out over the long run than the zero down ones.

goatlady · #8 07/25/12, 08:02 AM

Also most mobile home dealers will arrange financing for their mobile home buyers, as well as delivery and set-up. You would need to have a well, septic, and power to the property in order for the county to issue a permit for any mobile home, so keep those expenses in mind. and you WILL need a permit to move a mobile onto property.

rambler · #9 07/25/12, 08:10 AM

Everything is easier if you have some skin in the game - the zero down part is the big red flag here, while you can find loans with zero down, you are not finding the good loans when you have nothing invested of yourself. They are taking a lot of risk with zero down; so they will charge you more, and be more picky about the conditions of the loan.

Equinecpa says it better, I agree with her.

wildcat6 · #10 07/25/12, 08:24 AM

Why would you want to purchase this with zero down?

Smalltowngirl · #11 07/25/12, 08:54 AM

Bill, I know you still owe a lot on your current farm but wouldn't it be better to just keep paying on it and adding the necessary improvements instead of walking away from that land contract and starting over? You have paid a lot of money in on that farm not to mention the work you have done. At least you know what the land & neighborhood is like where you're at; bringing the house up to modern standards shouldn't be as expensive as starting over with all of the necessary expenses for inspections, permits, mortgage/s etc.

Yvonne's hubby · #12 07/25/12, 09:59 AM

Quote:

Originally Posted by FarmBoyBill

I might come near the mark of nothing or little down.

So, thats where im at.

And for $139 and a trip to walmart this is where you could be without having a mortgage for that trailer at all.

Ozark Trail 10-Person 3-Room XL Camping Tent - Walmart.com

FarmboyBill · #13 07/25/12, 10:45 AM

YH I dont think I want to spend the next 30yrs of the loan liveing in a tent.

SmallTgirl. I could make the payments on this place. I couldnt make up the back payments. The last remaining heir is in her 80s, and when shes gone, I imagine the kids will sell the property. I want to be goine before she is.
Besides, My kids want me to move near to them. AND I want to too.
AND, hopefully, Id movew top a place that had a barn, and good out buildings, and a well.
Why $O down. Cause I got nothing to put down on it. It will likely cost me a grand to get alla stuff moved in gas. IF the buildings need any work, the bank note isnt likely going to cover that. I have this house, made up of a 14 X 40 and a 14 X 24 hip roof storage buldgs, and a 12 X 36 storage buld to sell. They should make me between $5/7000. Im not going to sell them TILL ive got my name on another place. Ive got a buncha other stuff thats worth around $3000 or more. I cant get squared away on E bay to sell it.

FarmboyBill · #14 07/25/12, 10:46 AM

Me and my boy been out driveing around the area Im interested in, and NOT ONCE did I see a sign, (For Sale By Owner). There aint no such animal, ALTHOUGH, there is around 3 miles from me.

fordy · #15 07/25/12, 12:03 PM

Quote:

Originally Posted by FarmBoyBill

Me and my boy been out driveing around the area Im interested in, and NOT ONCE did I see a sign, (For Sale By Owner). There aint no such animal, ALTHOUGH, there is around 3 miles from me.

LandsofAmerica.com - Land for Sale, Farms for Sale, Ranches for Sale, Acreage

................choose a state....oklahoma
................choose property...land with home
................choose number of acres......say 50
................choose upper cost.....say $100,000
................choose , limit search too owner finance
................choose display mode , low cost to high cost....
................When I did the above , It came up with 8 pages of listings !!!!!!!!!!!! .................The county for each property is also listed ! , fordy

dlskidmore · #16 07/25/12, 12:19 PM

Quote:

Originally Posted by equinecpa

he recommends at a minimum a $1000 emergency fund.

My bank wants us to have a 6k emergency fund (including proof of existence of said fund) in addition to our 20% down payment and closing costs. That's despite us having enough income to handle all our payments if only one of us looses our job...

If you can make any headway in your current position, don't buy yet. While saving a downpayment you make interest (as little as that is worth nowadays it is something) while after you turn over your downpayment you're paying interest. The current home interest rates and land prices are tempting though.

dlskidmore · #17 07/25/12, 12:24 PM

Quote:

Originally Posted by FarmBoyBill

Me and my boy been out driveing around the area Im interested in, and NOT ONCE did I see a sign, (For Sale By Owner). There aint no such animal, ALTHOUGH, there is around 3 miles from me.

For sale by owner is not the same thing as finance by owner. You can always do business through an agent and make the offer contingent on owner financing. If they don't need the cash right away to pay off their loan or get a down-payment on a new loan, owner financing is a good deal for them as they get more money in the long run for taking that risk. There may even be positive tax implications... Look for an older landowner who is retiring, downsizing, etc...

FarmboyBill · #18 07/25/12, 01:28 PM

Fordy, I tried it. U can too. Enter Oolagah, Chelsea, Talala, Watova, Vera, Oglesby, Ramona, Collinsville, Oowala, Elba. Enter $50 on each bracket. Enter 10/20 acres. Enter either acreage, and house with acreage. I got ONLY ONE. In Pushmathatma Co, wherever that is.

FarmboyBill · #19 07/25/12, 01:31 PM

Disk, IF a place is for sale by owner, ThEn, they generally put a sign up saying so, DONT THEY??? Like I said. Me and my boy have made 2 trips running out what he said was $35 in gas in his small car wandering around, AND WE NEVER ONCE SAW A SIGN SAYING, FOR SALE, BY OWNER. OR Anything like that.

dlskidmore · #20 07/25/12, 01:55 PM

Quote:

Originally Posted by FarmBoyBill

Disk, IF a place is for sale by owner, ThEn, they generally put a sign up saying so, DONT THEY??? Like I said. Me and my boy have made 2 trips running out what he said was $35 in gas in his small car wandering around, AND WE NEVER ONCE SAW A SIGN SAYING, FOR SALE, BY OWNER. OR Anything like that.

For sale by owner just means they don't have a real estate agent. You don't care if they have an agent or not, you just want owner financing.