Advice on My Three- Year Plan (long)

Discussion in 'Homesteading Questions' started by Tango, Jul 22, 2004.

  1. Tango

    Tango Well-Known Member

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    When I purchased property here, I started with 2.5 acres. We had no neighbors around so I thought I could eventually work my way up to 10 to 20 acres. That was four years ago. We've worked our way up to 6.25 and have use of a relative's adjacent 1.25 acres which we will use as pasture. Anyway. My neighbor is thinking about selling and offered me 2.5 acres adjacent to my property. Curious as to what it is worth, I called an agent and was told lots here (1.25 ) are going for up to 25K now :eek: . I purchased all my lots at $3500 or less. Fifteen years ago, this area was part of a land scam- you've heard of the Florida land scams? This was one of them. Lots 15 years ago went for $15K and a lot of people lost a lot of money. Tax foreclosures sold lots for back taxes. In the past two years there has been a lot of activity out here. It is surreal. If you saw this area, you wouldn't pay $5K an acres let alone $25K. It really seems suspicious to me and I think perhaps the market will bottom out and lots will go back down to a more reasonable price. At any rate, I can't afford to expand at current prices unless my financial situation drastically improves quickly. Instead of expanding, I am thinking of selling my furthest lot. If I could get $20K for it, I could pay off a few debts. In three years I could sell the house and additional property and pay cash for more land somewhere else. But if the market bottoms out; I won't be wanting to sell my house and I will be having to put up with neighbor's even closer than I do now. I'm really torn about this. I don't want to sell anything if I won't be able to buy something in a few years that is reasonable. BTW, I also own 5 acres further north in Florida but to my knowledge that is still the same value as when I purchased it five years ago. That is an investment- I don't want to live there. The lot is too narrow but it is on a river. Sell one lot at these high prices? Don't sell but wait to see what happens in three years?
     
  2. countrygrrrl

    countrygrrrl PITA

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    This is a tough one.

    First, if you can't afford to buy more land (no matter the price), I wouldn't do it.

    But if you don't want closer neighbors, you might not want to sell either.

    HOWEVER ... if your goal is to sell your house and property in three years, then you need to pay off your current debts, start putting aside a little bit every month and make improvements to your home and land. Practical improvements --- I'm sure you know what I mean.

    In other words, selling your far lot may be a good idea and I would probably do it.

    I know everyone is predicting gloom and doom, but it's my experience gloom and doom doesn't necessarily apply to real estate. I have yet to see real estate prices go down anywhere. Unless you live in an inner city crack-ridden ghetto or you really let your property go.

    So my sense is that you ought to sell the far lot and put the money into: 1. becoming debt free; 2. putting aside a little money; and, 3. your property, in order to make it even more sell-able in a few years.
     

  3. desdawg

    desdawg Well-Known Member

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    You really have to look at the big picture. Here in Arizona where I live we have been discovered. We are close enought to Phoneix to commute and seem to be the new frontier of crazy growth. I bought my place here 15 years ago for $6500 on terms and today the same bare ground is going at around $20K. Some years ago I was looking at a property in town. I offered $34K and they countered at $40K so I passed and went on to other things. Last year it sold for $500,000. But in the meantime all kinds of development had occured around it. So you have to look around and see what is going on and where the people are coming from that will pay the new price. And you have to look into your crystal ball and see if more are coming behind them that will continue the pattern. I think Florida and Arizona are very similar in terms of growth. They are both very popular states for winter visitors from what I understand. I have never been to Florida so I am relying on rumor as much as anything. But here at least, once a growth pattern starts it doesn't stop until the countryside is filled up.
     
  4. Dreams30

    Dreams30 Lady Rider

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    Marcia,

    I think..... hold on to all you have and wait the three years.

    One of these three things will happen....

    A) Land prices will skyrocket...which means that any that you sell at that time (even the far lot) will bring more.

    B) Land prices will go bust and you have steadily been saving all this time and can buy more land when the bottom drops.

    C) Land prices will stay about the same and you still have 3 years more of savings to do whatever you decide to do.

    I know that the option of buying that land your neighbor is selling is tempting however, if you can't afford it then........well, I wouldn't do it. :)
     
  5. Tango

    Tango Well-Known Member

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    I really can't buy it :( my uncle was looking into buying it but I told him not to consider it at these prices. He was at a land auction with me two years ago and thought $3500 for one lot was absurd.

    That is where I get overwhlemed. I have to wait three years for my son to graduate high school, but it seems anything could happen in three years. More than likely however, if this place keeps populating the way it is, I won't want to live here anymore.

    Thanks CG :)
     
  6. Tango

    Tango Well-Known Member

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    I've been meaning to post about this for some time. All sorts of land is going up for sale and selling in this county. In the next ten years there may actually be more than one town in this county. This happened in Palm Beach county about 25 years ago in Royal Palm Beach. These lots were divided into 1.25 just like there. To live in Royal Palm Beach now is to live in the suburbs on big lots. I don't want that. Meanwhile I know our taxes will go up again. :rolleyes:
     
  7. Tango

    Tango Well-Known Member

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    I can't imagine having 50K to spend on land, so no worries in buying it :) selling the one lot would get me out of some debt that is getting increasingly harder to pay for though. My job situation isn't great right now. I will have to pray some more on this. Thanks Dreams30.
     
  8. Jena

    Jena Well-Known Member

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    Boy I sure have! I lived in the Victor Valley in California from 1984-1997. When I first moved there, property was cheap (for California) and it was a rural area. Shortly after I got there, they started building and that area took off like a rocket! The population like tripled within a few years, they built thousands of houses! Real estate values soared.

    Then the bottom fell out.

    People found themselves upside down in their mortgages by $50,000 or more. They couldn't sell, had to move, whatever....there were foreclosing houses on every single block and I am not exaggerating. I was a meter reader at the time and thus got around the neighborhoods. Many houses would sit for over a year before the banks had time to do anything with them. They would be totally stripped (to the bare walls....all fiuxtures gone, wiring pulled from the walls, etc), vandalized. It was awful.

    Then the shysters moved in. People would squat on properties in the more exclusive neighborhoods...simply move in until a bank came along to evict them, often over a year later. The smarter ones would claim to own the houses, then rent them out to unsuspecting tenants. It was a mess!

    Here is an example. I bought a house out there in 1994. It had originally been built in 1987 and the previous owners had a mortgage of $165,000. I paid $108,000. My mom bought a house in 1986 for $86,000. At the top of the market it was appraised at $120,000. When the bottom fell out, it's value went back down to $83,000, less than what she had paid for it 8 years previously.

    A year or so after I left, the market began to recover. Prices are again at, or above, what they had been at the top of the market in the late 80's, early 90's. Those who were able to ride it out are doing ok again, but many, many, many people were not able to do so.

    During this time, I believe national real estate was in a bit of a slump, but the local consequences of the bubble bursting were devastating to the community and the people who could not hang on.

    I have seen doom and gloom and it CAN happen. Prices have skyrocketed so much lately in many areas, that it would not surprise me to see the same thing happen in many areas.

    Why can't you sell it all now, while prices are good?

    Jena
     
  9. Tango

    Tango Well-Known Member

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    I don't want to move away while my son is in high school. I moved him from Texas when he was going to sixth grade and I moved him here when he was entering the seventh grade. He's stable here. And I would have to move further north where there is no real estate frenzy and I can find some land for what I really can afford without getting into debt again.
    I've also seen the bottom fall out of real estate. Our first family home in Texas we purchased for $45K. It sold new for $65K 13 years earlier. Don't know how the crash happened but we bought it for the amount remaining on the mortgage loan, lived in it seven years, and then sold it for $91K at the crest of another r.e. wave. Our plan is to pay off our debt and move into an area where we can live more self-reliantly. But we have to wait three years.
     
  10. chickflick

    chickflick Well-Known Member

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    Yep...... my problem exactly! Tango.... the best thing to do is go LOOK!! Act as though the money is in your hand and GO LOOK at future possible Dream Homesteads (or whatever your thinking of). Even in another state. I know that when I actually began to LOOK... well, let's just say I had a 'Dorothy Moment" (there's no place like home) ;) The best 'cure' for a curious mind is REALITY!! :yeeha:

    Good luck! I would say, however, if you sell.. why not sell it ALL at the same time? If the market is high, WHY would you want to take a chance on getting stuck w/the house and no property? Not to mention being paralized from getting top dollar, and a future home of your choosing? (Maybe I missed something in the details.)
     
  11. chickflick

    chickflick Well-Known Member

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    Hmmmmmmmmm..... I hate to sound mean and crass.. but hey... that boy will ADJUST!!! Change is what life is all about when you're young, remember?? :) If he were already a Senior or something, after being there all 4 years, then THAT'S another story; to graduate w/his class. But, since the numbers you speak of seem to indicate the is a freshman/junior.. I say that should be the LAST reason to stay. It is not necessary for any parent to put their entire financial future on the line for THAT reason.. Sorry.. I told you it was mean and crass! IMHO!

    Ever thought about Home schooling? (I personally, think the 3 years my oldest spent in Public HS was essentially a waste..now that he's about to graduate college...oh well.... gotta let 'em choose sometimes!) Although,I guess it DID keep him out of the military and in Iraq, right now.. and he and his sister are BOTH going to Boston Sat..... :no: (Hmm.. guess I had more influence than I realized!!) anyway.. back to topic... :eek:

    Have you talked to him? Maybe he'd enjoy the change? How well 'plugged in' IS he there? Maybe you've already done this, but I would have a REAL LONG talk with him. And PLEASE..... I've found that if you sacrifice TOO much for them (kids) the less they appreciate it OR ever help YOU later on!!

    Keep thinkin' and schemin'!! You'll figure it out!
     
  12. savingup

    savingup Active Member

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    desdawg, where you at in AZ? We just left there to come back to IN. Land is WAAAAAY crazy out there. Growth is just astounding. We were in Mesa and spent every minute of days off up in Beaver Creek or over in Globe.

    I dearly miss the desert as I am originally from Tucson but the water situation out the worries us as far as buying land there. What's your take on it?
     
  13. charles

    charles Well-Known Member

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    I wouldn't necessarily take at face value the 25K price per lot quoted by the realtor. Why don't you ask your neighbor what he wants for the land?

    Otherwise I would advise like CG. Sell the one lot for 20K and pay off all debts and hang on to and add to your capital for future buys. Many types of speculative real estate will get cheaper when interest rates go up - the cost of carrying them becomes too great. If the bottom falls out of your desired real estate market then you will be in a better financial position to buy more land where you are or up north were it may be yet cheaper.

    Conversely, if the price of land sky rockets you still come out ahead because your remaining land will be very, very, valuable and you can sell out and, again, buy cheaper land further north.

    Three years is not a long time to sit. Land prices (except for scams) usually don't crash as much as housing prices do when the bubble pops. People hold on to their land dreams longer.

    I would like to buy some more land in my area too. But the prices are almost completely based on the expectations of futher increases in prices. If I live long enough, prices will fall (relative to incomes then) and I will buy at that time. And if they do keep insanely rising, well, they can have my place when they make an offer I can't refuse. There is always cheap land someplace where its worth living.
     
  14. Tango

    Tango Well-Known Member

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    Not mean or crass at all chickflick. It is a personal issue for me. I attended 4 different elementary schools and 4 different high schools. I was a shy kid and turned rebellious. His stability is extremely important to me. That said, he would move in a heratbeat- back to the coast- where he would attend school with his friends. I definitely do not want to move there. The land is way out of my reach, even a city lot is out of my reach, the crime and drugs are very within reach, and even car insurance for him would be four times what I pay here :eek: He is not a country boy and would rather stay with the devil he knows (here).
     
  15. Tango

    Tango Well-Known Member

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    I asked him point blank as soon as he mentioned it. He said he hadn't decided but told me people were asking 20 -25K for lots now. I thought, they might ask it but are they getting it? That is why I called the real estate. They couldn't believe it either but said it was what people were paying :no: Had we purchased more lots scattered here and there as I had wanted to do two years ago when the tax auctions were going on, we might be making a killing right now. But no :rolleyes: my partner is very safe with money. :no: I wouldn't even have that far lot had I listened to her. Thank God I don't pay attention half the time. Thanks for your advice Charles; makes sense :)
     
  16. Jen H

    Jen H Well-Known Member

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    I'm with the sell while the money's good crowd. Perhaps you can sell now while the prices are high and then rent a small house for a couple of years while your son finishes school? Buying your dream property where you can afford the prices doesn't necessarily mean you have to move there right away.
     
  17. Mudwoman

    Mudwoman Well-Known Member

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    My first thought was to sell the property further north in Florida. You don't want to live there and it isn't doing anything. Get rid of it. It may be worth as much as it will ever be worth.

    It would be tempting to sell one of your lots and pay off bills too. A lot of things can happen in 3 years and I personally would only consider it if I could live without it just in case I couldn't sell and move.
     
  18. Jena

    Jena Well-Known Member

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    This would be my next thought. I can totally respect staying in one place for the sake of the kid! Sometimes a move at the wrong time can make or break a kid.

    Renting for three years could work, if you have the income to do it without dipping into the money from the sale. It would also give you lots of time to shop around.

    Jena
     
  19. countrygrrrl

    countrygrrrl PITA

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    Well, bubbles do burst, yes. :D

    But there's no law against taking advantage of one.

    And, if you take care of your property, I wouldn't think a bubble would affect you, except to delay the sale and bring the price down into a more reasonable range.

    I was assuming the price of your land would likely become more reasonable in a few years when i posted. But that's one reason it's so important to take care of your house and land, and make improvements as you go along. I don't mean building gazebos all over the place :haha: --- I mean mowing, getting rid of weed trees, taking care of good trees and plants, having good fencing --- those kinds of things.
     
  20. agmantoo

    agmantoo agmantoo Supporter

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    You do have a wonderful opportunity to acquire the acreage you desire but in a different area. I have been one to take advantage of such price escalations and that has enabled me to acquire many times more acres than I could have ever bought otherwise. The decision is to balance your current needs to your heart's desires of the future. I am accustomed to making sacrifices in order to achieve my long term plans. I would sell out in entirety and I would NOT pay off the personal debt but I would buy acreage, with home, with all the money by doing a 1031 exchange. Then I would take a home equity loan on the new property and then pay off the personal debt and work then to pay off the home equity loan as quickly as possible. After the move, I would also prepare to wait until another opportunity surfaces to repeat the same thing. :) I have done this 3 times and I have found that I will never go broke by taking a profit..