Cash Only... Lamesauce

unregistered358895 · #1 08/04/13, 10:54 PM

We accidentally found the perfect property. 31 acres within a half hour drive of our shop,heavy forest with a creek and three streams. Against our better judgement, we went to view the property - it is gorgeous and we can both see ourselves living there for the next 40 years.

The catch is, of course, it is bank owned and they are accepting cash only offers. We have looked into lot loans, construction loans, etc. but none of them have panned out. We had worked with a family member to finance the property via a personal loan, but due to their medical uncertainty they decided against it at the last minute.

/sigh. I almost wish I hadn't stumbled across the property listing. We have an excellent credit history, but the property doesn't qualify for traditional financing. It's so frustrating to be this close to "the dream" but not be able to follow through on it.

rambler · #2 08/05/13, 12:28 AM

Credit unions.

Small town bank, those are getting rare but still out there.

Rural ag financing, doesn't sound like this is 'farmland' but maybe the timber qualifies it for an ag loan, find the local FSA office (Farm Services)- typically in the county seat - and follow through their resources. These ag lenders are outside of what you are used to, they hate houses, like plots of raw land. Tho typically for farming, not just living on, donno if it qualifies....

Paul

unregistered358895 · #3 08/05/13, 12:33 AM

Thanks, I will have to check that out. We were working on a deal with a local timber company who were considering advancing us the cash for the property in exchange for logging rights. After doing a survey, they backed out because the trees weren't mature enough for their liking. It was really disappointing - we were literally days away from shaking hands and exchanging monies.

PNWest · #4 08/05/13, 07:49 AM

Find a way to deal with the bank that is selling the property. Sit in the loan officer's chair until he comes up with a way for you to buy the property.
Don't take one Timber company's word for it, find another, or another if need be.
Every area has a 'company' that finances property. In your area it's probably an older, rich man looking to make a higher percentage of interest than is available from banks.

Is it risky, YES. How bad do you want the property? How good are your methods and income to repay the loan? Be brutally honest with yourself...would you loan yourself money?

If all else fails, advertise you want to borrow money at a higher %. You will shake someone out of the woodwork. Good luck.

joebill · #5 08/05/13, 08:23 AM

There are folks who buy notes on property and real estate. they advertise all over. Escrow company could pit you in touch......Joe

Rose1317 · #6 08/05/13, 09:11 AM

Sometimes it doesn't work out for a reason. If you have to borrow to buy it, how will you afford to build on it or drill a well or fence it or build outbuildings? And pay the taxes, insurance and utilities? We faced all of this, and realized there had to be something else out there that would be less stressful. And there was, thankfully. Hopefully a better one will be along for you too.

MNMamaBear · #7 08/05/13, 09:31 AM

gosh, that sucks!! Sometimes things don't happen for a reason, at least, that's what I keep telling myself. :P You just never know, maybe there is a better deal and an even more perfect property right around the corner!

K-9 · #8 08/05/13, 09:41 AM

If there is a farm credit services office that services your area they will gladly loan you the money for such property based on what you have said about having good credit. They love raw land and will loan on farm or recreational properties. Check on the internet as one office may service several counties so even if there is not one in your county, there may well be one that services your area and generally their rates are generally a lot lower than bank loans on raw land. In additon the deals I have done with them go much smoother and quicker than dealing with a traditional bank. I just bought a piece of property took the stuff in middle of the week, had my approval first of the next week.

unregistered358895 · #9 08/05/13, 11:05 AM

As far as loan repayment, the property is being sold for what we own on our current house, which we are putting up for sale. We have the budget for repayment / taxes / etc. The property already has a well and septic. One of the buildings can be insulated and used as a one room cabin quite easily while the home on the property is reconstructed. We would rebuild over time, so we wouldn't be sinking all our $$ into the property all at once. I can honestly say that yes, I would loan myself the money. The only time I have ever missed a payment was when I was in my 3rd trimester of my pregnancy and I lost my mind (we were also relocating our business and expanding it at the same time). I used to work in finance and our debt to income ratio is right where it is expected to be.

We want this property realy bad- even considered selling our business to make it happen (for a minute... we love our business though and know if we sold it off we'd regret it).

Thanks - I'll look into the farm credit services stuff.

jwal10 · #10 08/05/13, 11:33 AM

Sounds like you need to leverage what you have to get the cash to buy. Otherwise it probably is not a good time right now. How much is the land and is it REALLY the best for you. My bank would look at my total financial portfolio and tell me, then offer the cash advance IF it was a such a good thing....James

ImbriD · #11 08/05/13, 12:07 PM

Sounds like you found a great place, but I'm going to second Rose1317's comments. Sometimes it doesn't work out for a reason.

We found our perfect acreage, location, creek, etc. but no matter what we did we couldn't close. We tried everything short of cashing out retirement accounts. We had everything go wrong from things as simple as banks changing their mind to computer errors that reported us having a horrible credit score, no job, etc.

Six months later we found better land, better location, better house, better investment and more for half the price. Best thing was we were able to pay cash.

Sometimes things really do happen for a reason. Just my 2 cents.

unregistered358895 · #12 08/05/13, 01:01 PM

I know that if it doesn't work out with this property that there will be others. But at the same time, this one could benefit us both personally and professionally, and if we don't explore all options we'll be left wondering "what if..."

unregistered353870 · #13 08/05/13, 01:22 PM

Quote:

Originally Posted by PNWest

Every area has a 'company' that finances property. In your area it's probably an older, rich man looking to make a higher percentage of interest than is available from banks.

Lots of good suggestions given in this thread, but this is my favorite. Usually they're called private lenders or direct lenders. There are even online services that pool private lenders so you don't have to get it all from one person.

Harry Chickpea · #14 08/05/13, 01:31 PM

Honeymoon phase of buying. Spend some money having a title search done, checking the surveys, checking for what is owed in taxes, checking property tax, checking power availability and cost, checking land use restrictions including wetlands restrictions, and get back to us.

unregistered358895 · #15 08/05/13, 02:07 PM

I've already had extensive conversations with the county and forestry service about the property. The land use restrictions fall right in line with what we want to do with the property. There is power installed to all the buildings and all but 5 acres are in tax deferment based on the forestry classification. The dwelling on the property isn't "habitable" per the bank because of code issues (bad foundation), but it is a "legal dwelling" per the county and can be replaced and maintain the non-conforming use permit for a residence on forestry land. There's a 4 year permit-lifespan for pulling permits for tearing down the residence to rebuild.

The forestry service did a survey and there are no wetland or wildlife restrictions aside from protecting the fish habitat in the creek (no dams, for example). The big issue in the area of the property is eagle nesting, and during their survey they found no eagle's nests on the property.

Harry Chickpea · #16 08/05/13, 02:21 PM

OK, you have some of the ducks in the row. That sounds good. What about back taxes liability and is the yearly taxation in line with what you can support (with an inflation factor of a couple percent a year)?

unregistered358895 · #17 08/05/13, 02:45 PM

We were able to pull the last three years tax records and there are just under $3,000 in taxes due (Haven't been paid since 2008). Once that bill is settled, the property taxes are roughly half of what we're paying for our current property in town.

Harry Chickpea · #18 08/05/13, 03:20 PM

Is the bank willing to sell a portion of the property with the rest being covered with a lease and first refusal offer on the remainder?

K.B. · #19 08/05/13, 03:38 PM

If you can get access to the deed at the county clerk's office, you should be able to see if there are any listed easements or "rights" granted to other parties listed on the deed.

Was a stocking assessment included as part of the forestry survey, or just a timber productivity assessment?

It sounds like you've talked to the right folks at the county planning office, but I would try and see what info was used to approve the dwelling site. Also, take a look at the placement of the buildings and check them for meeting setback requirements from roads, septic, well, property lines and the riparian zones. Once you go for permits to re-build, they will likely check these.

When we bought our place in Jackson county in 2010, we felt safe that since there was already an approved homesite that we were at least in good shape for that portion of the paperwork. Not so. The rules had changes since the prior approval and we had to go through it all again.

Your county may be different, but in Jackson county we had to jump through a lot of hoops to get the homesite approved. The forestry surveys were big ones (our parcel is designated OSR), but the number and age of homes within a certain distance of the parcel was also critical.

Sounds like you found a great place - I hope it works out for you!

unregistered358895 · #20 08/05/13, 04:26 PM

Good thoughts, and I will have to do some more checking. The Sr. Developer for Washington County said that the house is automatically a legal dwelling because it was constructed prior to the 1950's. I am sure that when we replace it we will need to make sure the existing site will work, and if not apply for a new site elsewhere on the property

She did tell me to do our new home plan and submit it prior to demolishing the current house. If there is too long of a lapse between demolition and construction, the nonconforming use allowance can be revoked and the farm could be reabsorbed into the forestry zoning.