Short on cash but found a property I like...

I have a local bank with which I hold a good credit standings. They will loan on a place for me, but have to have a higher down payment than other sources. EVEN other small banks regrettably.

Seems like a lot of money for 6 1/2 acres. Especially if the house is virtually worthless. Is there a good well and septic? Good access road? Fences and/or garages and barns? Power to the buildings?

I bought this place on what we call a contract for deed. It went through the owner with a simple contract. Rather high interest at the time, too. Makes you pay the thing off ASAP - even go hungry and work a night job! I don't quite understand your dilemma with such a deal. With a bank loan, all you own is the "paper'. If you don't make the payments, you lose the place (and any down payment and monthly payments) any which way you make the deal...bank loan or contract.

If your savings were wiped out with a broken leg, tells me you prolly don't have decent health insurance. And you are prolly living on the edge of disaster financially. If I were you. I'd wait, save and get a place when I could afford it.

Yes, it does seem like a lot of money for the 6.33 acres.

I don't know how to describe the "house" exactly. It's probably a 25 year old mobile home, 12 X 50 or so, and a built on addition of maybe 14 X 40. It's old, and not particularly valuable money wise and not particularly eye catching. But it is quite livable just as it sits. I've lived in worse. If we did acquire the place, we WOULD live in it, at least in the beginning, and I believe we'd be pretty comfortable. So while banks don't have any interest in loaning money against it, I wouldn't call it "worthless" either. There may be a better word for it that I can't think of.

Yes, there is a good septic system.

The place is currently on city water, most of the places in this area are. This is not a good area for water wells and many that have wells do not get good water from them. This property does have a well but I do not know the quality of the water. The owner before the previous one told me about it and acted as though it were a secret that it was even there. It's inside of a concrete block building that they used kind of like a root cellar. It's not even mentioned in the current listing and I honestly don't know if the broker knows about it. There are also some undeveloped springs near the pond, also not mentioned in the current listing.

Access is very good. It has about a 70' driveway that's packed gravel and in very good condition. It is a corner lot on two country roads, one fairly busy going by one side of the property, one less busy that the driveway is off of, both paved, two lane county road. The general area is basically a rural Mennonite community setting, mostly small farms and a few varying businesses scattered about, a small shed builder across the road, a totally wooded property behind. There is a second driveway about mid property that goes to what used to be an old homesite, also on the same property. That might need some new gravel to make usable but it could be a place I might want to build later on should we end up with the place. It's a desirable spot. On the negative side, it's not very private. I could plant some trees on the perimiter but that takes a while to make much privacy. On the positive side, it's an excellent location for a roadside stand or even a you-pick if I should choose to go that way.

Not much in the way of fences, some perimeter fencing but if I wanted livestock, I'd need do put more up. One pole barn, dirt floor, maybe 30X30. One small concrete building maybe 10 x 12 mentioned above. One small 8 X 10 storage shed, not much. No power to buildings that I know of but wouldn't be hard to run.

No, I do not have good health insurance. As a fulltime rver with a domicile in South Dakota, health insurance is a pretty big challenge. I want to change that. I want to move. I want to leave the fulltime rver status behind. It requires an ADDRESS, and not a P.O. Box. SD has made it easy to use a private mail box and get your drivers license, vote, get a passport, lots of stuff, very easily with no permanent address. That's not so in many other states. I like TN, I want to move to TN. The property we're looking at is in TN. And I would be able to make some things happen here as a resident that I cannot until I become one. So yes, living on the edge of financial disaster and wanting to change that. Property ownership is a step towards that.

So far, "waiting" hasn't been a good game plan as each year, it seems like the situation gets a little worse, not better. Tossing what pushes towards $1k/mo into the rv lifestyle doesn't help. I just haven't figured out how to get from here to a more standard lifestyle but I'm trying.

My problem with a land contract is that it generally has almost no protections for me as a buyer. Let this investor get in trouble with the IRS a month before I have it paid off and "poof", I own NOTHING, despite having paid for it. Maybe a good lawyer could write some protection in, I don't know, we'll have to explore that.

I feel like I'm stuck on a merry-go-round and can't get off.

As to your next to last para. Ive been on the search now for 3yrs. Ive found that both my financial aspect AND the lending aspect has never been better. I can move into a HUD home with NO money down. AND I can move into a conventional loan place with just 3.2% down.

I do not understand what you say about a land contract holder and "poof" .
The contract does not go away because a Holder looses it due to Irs, bankrupt, death...
The contract is still there. The contract protects Both sides. It does not just go "poof".

From what I've gathered, you are in your 50's, live in an RV (your only asset other than some equipment), no health insurance, very little money (going to sell the RV for down payment) and I hear no mention of a job. I assume you get some sort of a check. I'd run the numbers. If you have not been able to come up with more money or property by now, are you really ready for the expenses that come with property. I know so many people think they are going to buy property and start making money but the majority of them actually sink way more money into their place than they make. Not only that, but they spend way more money than they did living in the apartment etc. before moving out. You may actually be jumping out of the frying pan into the fire. Compare your cash flow coming in (for yourself, no need to share with us) and then compare that to your land payment and other expenses going out that you will have on the acreage I know without a doubt I could live cheaper in an RV than on a homestead but I wouldn't be happy. I'm just worried you want it so bad that you are fooling yourself about how you will be able to pay for it and your other living expenses. I really do hope it works out for you though.

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Living Large Down on the Farm.

OK. Guess I should just give up, go find a cheap campground and forget about a homestead. I'll make sure to have one good bullet left for when there's nothing left.

If I wait to have the money, I'll be too old to care.

Thanks for the encouragement.

............Another plan.......find a smaller tract , say 50% of the price , owner finance and have owner pay for septic system and tack onto note ! Keep your 5'ver as a home and construct sturdy roof over it to prevent hail damage at lowest cost possible of materials . At some point in the future , maybe you'll be able to build a small home . Be satisfied with your 5'ver for now . , fordy

As I said before, the small local banks will loan on land that the big banks will not.

We ended up putting $6000 down on 5.7 acres of bare land, total price was $27,000, and payments were $165 per month for 20 years.

The pyment amount changed as the interest charged changed, and because I have been paying extra most months.

Why is your monthly RVing so high? Is your currant lot rental high?

You can do a land contract. Also a small town bank will give you a loan on a piece of property. I also did 2 land contracts on my own.1 with my grandpa and it did not go poof when he died. I have another one, which I hold and the people that bought the land have built a house and live in. I did both of these contracts on my own -no attorney. You can go sit with the owner and talk numbers,make your own contract. A title company probably has the paperwork and will give it to you for free. Don't give up, just cover your butt.

Bellyman, the people who are bringing up the seemingly negative aspects, are likely doing you one heck of a favor. IF you ARE in your 50s, You should have accumulated ALOT more than it seems you have. I knew I was going to farm every since I was in grade school. I started buying implements when I was in HS. I finally acquired all I need for the most part to farm/garden/homestead so I don't need to worry about spending for stuff while im paying for the place I hope to get.

As was said, Its going to take a few years before you get all the negitives out/off the place, and have it turned around and geared to do something with it. By then, youll be leaning into the 60s, and mkt gardening wont be all that much fun. Also, since you havnt done it, if ever, getting up mornings and milking later in the evenings wont be so much fun for your hands if you have any arthritis,. IF you have drive, you can overcome the age aspect, and to some part anything else that dosent involve money in getting the land in shape to do something with it.

Bman,,

If this is the place you want see if the seller will accept your RV as a down payment.......................

Based on your description of the home, you cannot get Conventional, FHA or VA financing. If the seller will accept the RV as a down payment contact Farm credit. Or, bite the bullet as see if he'll owner finance.

Don't give up!

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Mortgage Underwriters

It is not uncommon around here on a deal like yours to do a Owner Finance, 10 or 15 years, 10% down, 9% interest.

Seems you could swing this, be best for you and seller. There is people on this Forum sell for much more.

big rockpile

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I love being married.Its so great to find that one person you want to annoy for the rest of your life.



If I need a Shelter
If I need a Friend
I go to the Rock!

Bellyman, don't give up. And don't listen to naysayers. Only YOU know your gut feelings and what you want, and what you will do to get there.

I can't believe the lack of help on here sometimes. Ok, so he is in his 50's, not in great health, hasn't saved up a lot of money...yadda, yadda, yadda. It's not like he can say "poof" and all that disappears and things are different. So there is no sense in criticizing Bellyman for something that is out of his control. He asked for suggestions...not condemnation.

There were some good suggestions. I like the idea of seeing if the owner would take the RV as down payment. And it sounds like he's already paying $1K month towards RV living, so that is a good chunk of money on a mortgage or land contract. I wouldn't worry that much about the land contract -- but I would certainly check out the credibility of the seller first. Like you said, you can pay it off early and then you are totally the "free and clear" owner. You can pretty cheaply start a "pick it yourself" garden, starting small, and putting all the money towards the land contract. You will be motivated to make it pay for itself.

When there's a will, there's a way. You just need to keep exploring options, and asking questions.

And shame on the people that criticize instead of championing. This is a forum to HELP fellow homesteaders, not make them feel like they should crawl under a stone for asking a legitimate question.

Ok...off my soapbox now. Sorry....just something got my mama dander up!

Duplicate post...sorry!

A properly executed land contract IS a mortgage, with all the legal implications and protections. Set it up with a lawyer and make your payments...easy peasy.

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'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded.

Friedrich August von Hayek

Good grief people! Bellyman comes asking for help and he gets blasted because he hadn't lived the (fake) "American dream" and amassed a McMansion by now. This is a homesteading forum, not a "be rich" forum. What ever happened to the "pull yourself up by your bootstraps" mentality that used to be a part of homesteading?

Bellyman, if this is the property of your dreams, then do the land contract. Have a lawyer look it over to make sure it's all correct and the right protections are in place, especially the right to pay it off early.
I don't quite understand your and other's negativity about a land contract. Yes, there have been unscrupulous deals in the past, but the laws on land contracts have changed to give the buyer some protection. Check out the third party who will be holding the land contract to make sure he's on the up and up. Request a credit report or background check, or whatever an attorney suggests. You are not getting any younger -- go for it!

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I may disagree with what you have to say, but I shall defend, to the death, your right to say it. Attributed to Voltaire

I had to go away and think about this for a few days. Sometimes, stuff like this that snowball way beyond the original intent cause me to have to step back and digest it all.

First of all, for reasons I'd not like to get into, I do find myself at age 50 without a lot of amassed wealth. Life happened. Some of it wasn't so good. But I don't get to pick and choose everything that happens to me. I have some control over some things, other things, not so much. No sense in crying over spilled milk... or lost time. I'm here. This is today. I'd like to make some things happen in a direction more closely resembling life where I want it to be.

And as far as health, I broke my leg. I'm not battling cancer or heart disease or kidney failure, I broke my leg. It will take several months before I can walk again but I WILL make a full recovery before my 51st birthday. I'm healthy. My dad is 91 years old and until just a few years ago, I think he was just about able to keep up with me when it came to work. I do come from pretty hearty stock.

Now, more related to the property I've been looking at. Who said the first thing about milking cows? I am NOT going to be milking cows. Do you think I've never had my hand on a teat before? Oh, contraire. I did milk cows, for several years. I know what it's like having to milk, morning and evening, 7 days a week, 365 days a year. I have no intention of milking even -a- cow. I'm looking at 6 acres, not 60. I didn't fall off the turnip truck yesterday.

My last flock of chickens was about 5 dozen laying hens. I sold some eggs. At a profit. No, it wasn't big money. But they paid for themselves, gave me free eggs and gave a little besides.

My last garden was pretty small but cost me about $400 to grow maybe $3000 worth of food. You can decide for yourself whether that was a losing proposition. I've got a lot of good eating out of it, still have a good bit in the freezer, as do about 6 other families. I'm not the "neub" people seem to think.

Another thing... How would anyone who's not from here have any idea what a good price for land would be here? And how would anyone who is not familiar with the area know good land from junk land? I can tell you, junk land is available at less than $1k/acre. And it is indeed JUNK land. I know of a 23 acre place that one of our local church members would love to sell to me that is so bad, I really don't think a person could make a nice piece of ground out of it by spending the asking price 3 times over. It's acre after acre of poor quality woods and rocky outcroppings covered in what straggly weeds will grow. But the price is less per acre. The piece I'm looking at is some of the best soil in the area with really good topsoil going several feet down, not just a few inches as is indeed common in some places around here.

Is it the ideal place? No. Is it my dream "forever homestead"? No. But I am coming to realize that I am not likely to find everything I want in a single property. It may be that this place could be a stepping stone to something a little more suitable in time. It is true that in time, I may not want such a big garden, maybe more of a size to just take care of us with a little extra. There may come a time when I don't want as big of a place or might want something a little more private and without any desire to sell by the roadside. As the retirement funds start kicking in, (yes, there are retirement funds coming despite the failure to accumulate) the need for cash generated on the homestead will be greatly diminished.

I know some have offered some good advice. And I appreciate that. And some have offered some criticism (I'm too old, I'm stupid, I'm lazy, etc.). Whether or not I liked what you said, or whether I think you don't understand the situation you're commenting on, I have thought about what you said. I do particularly appreciate those of you who mention that a land contract can work when it's done properly and with an attorney working on my behalf to make sure it is fair and reasonable. I will certainly explore that a little farther. I will also see whether the seller has any interest in a trade as I don't know their future plans.

It may really not work for this property. And I'm ok with it if it doesn't. But I let it slip by me two years ago and if it is what I think it is, I don't really want to poo poo what might be a really nice place to spend a few years and make something that might just sell for a whole lot more than I buy it for.

I'm going to see where it goes. No matter what I do, someone will think I'm foolish. But that's ok. Some of the things others want me to do would seem foolish to me. Thing of it is, I don't have to justify my decisions to anyone else. I may appreciate the input. I may even be swayed by your arguments. But ultimately, I'm a few words on a computer screen in a world far, far away in a land most of you will never see.

I'll post later if there is more to say. I'm sure at least a few of you will want to know how it turns out.

Land contracts protect the land owner a whole lot more than the land buyer.
That is WHY land owners try to go that route. Getting the property back is a MUCH more simple process if the buyer defaults under a land contract.

It certainly can go "poof" if the guy that actually owns the land goes bankrupt, or if the IRS puts a tax lien on the place. Sure, you could sue him for breach of contract....but try getting blood out of a turnip......

The other problem with a land contract is you have zero equity in the place until you make the very last payment AND title transfers to you. Say you get the place 3/4 paid for, break another leg, can't work, and can't pay. The contract is broken. The owner walks away with what you paid so far, and sells it again. Would you build a house on somebody else's land ? Build one on a land contract, and that is exactly what your ARE doing.

When you finance it with a title transfer at sale, a note & deed of trust, you start to build equity in the property from the first payment. You get in a bind years down the road....after maybe making major improvements to the place...and can't make the payments, the note holder can still sell it, BUT anything over the current amount still owed is your equity, and goes to you.

A note holder is well protected with a deed of trust, and if you put a decent down payment on the place, ought to be convinced of your sincerity to make the payments. If they won't go that route, I'd walk, personally.

Have you looked at USDA rural development loans?