Advice on My Three- Year Plan (long)

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.

 

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.

 

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.

 

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

 

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.)

 

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...

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!

 

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?

 

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.

 

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.

 

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.

 

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

 

Well, bubbles do burst, yes.

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.

 

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..