How to buy land when you do not havemuch money. Folks who have ALSO done this, please add your story

Discussion in 'Homesteading Questions' started by Terri, Sep 24, 2017.

  1. Terri

    Terri Singletree & Weight Loss & Permaculture Moderator Staff Member Supporter

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    My husband's Uncle said it best: "Every time you fill the tank of your car, put an equal amount in savings. That way when you need a new car the money will be there. And, if you do not have enough money to do this, stay home. Every time people go to town they spend money.".

    Now, my Husband's Uncle was a farmer, so when he was staying home he was working, and most of us need to drive to work. Still the advice was sound, and it directly led to us being able to buy 5.7 acres of rolling land with a creek on it.

    My own variation was to put a car payment in the bank, even though the pickup was paid off. At that time we had never gone more than 2-4 years without life kicking us in the teeth, and it was not easy to put a car payment in the bank but I did my best. I knew that one of our old cars would die on us at any time, and that we would need the money in order for both of us to have cars to get to our jobs.

    Only, my old vehicle did not break down in a major and expensive way when I expected it to. And. life did not kick us in the teeth for a few years, either, which was a very pleasant surprise indeed!

    At 200,000 miles the old Silverado only needed a few hundred dollars for repairs. And, at 250,000 miles it was still running. And, I had tried my darndest to put $150 a month in the bank, to which I had been adding whatever part of the tax returns we could spare, plus the contents of the penny jar. And, we now had $10,000 in there. This was starting to look interesting!!!!!!!!!!! Also, as I had mentioned, for the first time in our married lives life did NOT kick us in the teeth for a while!

    BUT, bare land needs a higher down payment, and that is *IF* you can find a bank to finance you. (I know now that the smaller local branches will finance a loan, but I did not know this back then ). Still, looking at land made a pleasant weekend diversion, and for the last 3-odd years I had been looking at "for sale" ads plus the odd drive in the country. Many weekends I would load up the car with toys and junk food, get the kids in the car, and we would be gone for 2-3 hours. A McDonalds lunch was often involved. And I found no useable land I could afford.

    Until I found something that I COULD afford, and DH saw it and pointed out that it lay directly between 2 cities and that it was therefor a good investment and that the value would go up. (DH is a dyed in the wool city boy and he LIKES it that way!)

    The way I had found the less expensive land was to go on-line. While we did not buy the land advertised, the entire area was inexpensively priced. I ended up driving around and looking at realtors signs. And, this particular parcel had 2 fairly major problems that brought the value down to where we could afford it. The first problem was that they were showing the land to people from a nearby small city, and it would not have piped in water available for the next couple of years. And, people who had had wells dug found out the water quality was very poor and not fit for people to drink.

    The other problem- which at the time I considered to be a bonus- was that there was a reasonably reliable creek on the property. Hot dog! I could get a pump and pump the water uphill to crops and water troughs and-and-and...

    OK, the creek was close to the road and I would have to cross it to reach most of the land. Well, I was figuring on a foot bridge that would support a riding lawn mover, or a tiller, and I figured I could deal with the creek.

    As it turns out the tiny creek becomes a torrent that is 30 feet across when we get a hard rain, but I did not realize that then and that only happens 2-3 times a year. And I *DID* get a bridge that worked: I will explain more later. *

    SO! The realtor knew what bank was willing to loan on bare land. The bank wanted $6000 down and payments of $160 a month, and I was used to saving $150 a month, so we could do that. And, payments would change according to what the prime interest rate was, and the prime interest rate had been going up for decades. Take it or leave it: the bank did not like loaning on bare land and they offered only the one option, take it or leave it. And taxes were only $150 per year.

    We took it.

    THEN our land taxes doubled as the property had sold for more money than they had expected. Oh, OK. Also about that time the prime interest rate dropped and so did our monthly payment. Well that balanced things out!

    And then life kicked us in the teeth again. Of COURSE it did! The very week we closed on the land I got sick with Multiple Sclerosis, and treatments have only been somewhat successful. I have only been able to do a little bit of what I dreamed to do with the property. I did do some, and I did get a bridge up. I am also getting into permaculture, which deals heavily with perennials.

    *About the bridge over the little creek: the one that turns into a raging torrent a couple of times a year? I knew I could not build a bridge that was 30+ feet long to bride the creek when the water was high, so instead I built one that would fall apart but be able to be easily put back up. Basically I bought pressure treated 4x4s and drilled holes in the ends of each board. I dropped them over the creek at a narrowish spot and ran heavy chains through the holes at each end, which I then looped around sturdy tree trunks. I secured the chains with carabiners, such as what rock climbers use. The carabbiners cost about $15 each, and the entire bridge cost about $150. When the creek floods some of the 4x4's slide off the bank, but when the creek gets low I just lift them back into position.

    Or at least I did for some years. That part of the bank is a bit wider now and I really ought to remove the bridge, but I never did get around to it. We are more prosperous now that the kids are grown and the land is almost paid off: we are considering hiring someone to make us a crossing over that creek. That area has since been declared a flood zone, and it is nothing we can handle ourselves.
     
  2. hunter63

    hunter63 Well-Known Member

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    Interesting story...
    Not giving you a bad time.....but we know that it takes a stash to get started
    Was thinking that maybe the title should be "How to save money to buy your land until you can afford it"?
    Instead of :
    "How to buy land when you do not have much money...Folks that have also done this, please add your story."

    Many will find that "Operation off the top of a hole,... is a whole lot easier than digging out of a hole....More room to maneuver.

    When you do have that bigger down payment....make financing so much easier, better rates.and less expensive.

    Spend less that you make...and pay yourself (save) like any other bill....It's hard but do-able.

    We had always been about doing for ourselves, fixing, building, wheeling dealing, growing food, canning, drying , flea market stuff and yard sales...attempting to be self sufficient as possible.

    Bottom line was....The mindset was there.......We were "Homesteading" in the city till we could afford land.

    We bought our first parcel in 1989....10.6 acres on a river....
    Wasn't all cash....but about 1/2...(had the cash) but wanted to use their money instead of mine....

    Interest was just renting their money, and hanging on to mine...but would allow it to be paid off any any time, ....if I wanted.
    Paid it off early but still kept my back up cash....

    Started a build in 1997....hole dug in the side of my hill for the house....then stopped to build up more cash.......Didn't want another mortgage.
    Good thing we did this as we were both laid off in 1999 factory that we both worked at closed.

    Unemployed at 51 (both of us ).....Would have been a whole lot scarier...If we had not lived that lifestyle and were prepared for that version of "SHTF"
    Retrained and moved on.
    Added another 6.5 acres on a land contract...again had the cash...but used the owners money, (payments).....paid that off early.....
    Didn't like the idea of a land contract, as many include the owner taking back the land if you miss a payment....
    BUT
    I did not want the other neighbor "that close to us"as they wanted to buy that parcel...so looked at it as renting till they moved on.

    All this while we used a travel trailers and a shed....hunted, fished in the river, canoed, played with and learned about alternate water collection and heating, sawdust toilet, having a garden.(at the community garden 1/2 mile away...with several people.)
    Basically "Homesteading" part time.....

    Added a cabin in 2005, did all the interior work, plumbing, electrical, cabinets as we went along.

    This is all paid for now, ....but has been almost 30 years.....
    Have a goal/dream.....work for it,...gather tools, knowledge, and skills....
    It will come.
     

  3. Skandi

    Skandi Well-Known Member

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    We've done it another way, we were paying (all figures in DKK) 5000 a month in rent on a one bedroom place, and we bought the cheapest property in the area which cost 90000 DKK it has two acres and a 3 bed house with two barns, all in very bad condition, but we figured we can slowly do it up and "play" at small scale farming to see if we can enjoy it, for less than two years rent.
     
  4. dmm1976

    dmm1976 Well-Known Member

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    Dave Ramsey suggests $75 per car per month into a savings fund earmarked "auto maintenance" for regular maintenance and unexpected repairs. We also have a new cat fund that I put in whenever I can for when we need to buy another , cash, never a payment.

    Actually, we have several funds we contribute to monthly , home maintenance is suggested to be 1% of the value of your he, we have a general gifts fund and a Christmas fund, and several things I'm saving up for that I can. Toss 1 or 2 bucks in a week. Like a new mattress and a new PlayStation.
     
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  5. hunter63

    hunter63 Well-Known Member

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    It is important to try to invest (pay yourself) in fun, as well....Playstation...Good personal goal...
     
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  6. dmm1976

    dmm1976 Well-Known Member

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    It is! I'm still playing on my old Xbox 360! Maybe in a couple years.

    Or maybe by then I won't care a hoot about video games anymore and can use that money for something else.
     
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  7. Alice In TX/MO

    Alice In TX/MO More dharma, less drama. Supporter

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    When I was teaching in public schools, I purchased small family houses that needed fixing up. Did as much of the work myself as possible. I rent them out, and on the whole, I have had great long term renters.

    I don't have to teach anymore.
     
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  8. ognend

    ognend Well-Known Member

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    How were you absorbing two mortgages (one for the place you lived in and the second one for the fixer upper) and all the repair costs on a teacher's salary?
     
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  9. PlayingInDirt

    PlayingInDirt Well-Known Member

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    Like a lot of people, we had to move an hour outside the city to afford some land. What we paid for our house, we could barely have gotten 1/2 acre on city water with an ok house. Our house could use some updates but great condition, and 9 slopy acres. 2 wells. Goats/ sheep will do well on our land, that's the plan anyhow. My employer will allow me to work from home 4 days a week (as soon as a home position becomes available... soon soon soon), so that played into our decision. I wouldn't have been willing to commute like I am permanently, now that we're out here, I'm thinking it's worth it. We almost bought a very small house on 3/4 acre closer to town on a busy road, only 1 bathroom (for a family of 4). Very glad we backed out.

    No car payments, no credit cards, didn't have a huge down payment but in retrospect a bigger down would have saved us a lot of money. We were anxious to get out of our rental, it was really a terrible area. Live on less than you make, don't eat out. Like Dave Ramsey says, rice n beans, beans n rice. Work OT and sell stuff.
     
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  10. seagullplayer

    seagullplayer Well-Known Member

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    My first home was an older Mobile home on five acres, cistern for water. Bad driveway, gravel road, very little yard, hard to heat. Nobody wanted it, the people really wanted out of it. That means it was not our dream home, but was better than rent and we could afford it. I think I payed $1000 or $1200 down. We lived there about six years.

    I was traveling for a living and my wife didn't like staying there of a night with small kids. So we found a very small house in town, three miles away. It was really a one bedroom with a small sewing room. The small room became our bedroom and we put bunk beds in the real bedroom for our two boys. It was heated with a morning glow gas stove, think wood stove only with gas for fuel. Window AC unit. The place was small no one wanted a one bedroom, it did have a small detached garage. They call them "model T" garages around here. The house was build in the 40's.
    We where able to trade the local reality even for the two properties, so almost nothing out of pocket.

    We lived "in town" for three years, it was a good home for us. Cheap to live there, it was nice to not have to haul water.
    Pretty good neighbors. We saved our pennies knowing we would want something bigger soon. One night I came home from work and asked where our youngest son was. She said he was on the front porch playing, he was not.
    Took us about 20 minutes to find him he had went down to play inside with one of his friends. Nothing was wrong, but he had not told anyone. In that 20 minutes all the things that could have went wrong ran through my head. Soon as we got back to the house I told my wife it was time to leave town. I called the same reality we had traded with, he was a friend of mine by then.

    The next night he picked us up after work and showed us three places. One of them is the place we have called home for the last 20 years. 8.5 acres two barns and a two bedroom house. The listing had not come out in the paper yet, it would the next day. My friend told me it would be sold by the weekend, they had it listed for a good price, they wanted out bad. They wanted to leave the country and move to the "big city". The couple was very young and newly married, the house had belonged to his recently deceased mother. We put in an offer and $50 to hold it. They took our offer right away.
    Our reality friend made me an offer on our home in town, we took it and had enough equity and savings for our down payment on our current home. We built on a few years after that and now have a nice garage. It has been "paid off" for several years now. We will never move again.
    I recall when we made the move I needed a riding lawn mower, our place in town was push mowed in 20 minutes. I traded a really nice jon boat and trailer for a pretty small JD mower. The guy got me good, but I was boat rich and cash poor...

    Lots of people these days don't understand "starter homes", really we had two of them. We really didn't make money on either one of them, but we broke even when we needed to.
     
  11. hunter63

    hunter63 Well-Known Member

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    We did broke even after 6 years on a mobile home.....sold for what we paid....that got us the down payment on the house.

    Seem that many young people get married, and expect to have all the bells a whistles right away. right away.
    Money, Money, Money......

    DD and Sil (now X SIL ) new double wide ( we paid the down payment) then had to have 10 extra acres, 4 wheelers, tractors, hunting land etc etc.

    Always were broke...then got hurt at work...was even worse.......and they split after 17 years.....
    He kept the double wide....she moved on....remarried to a retired army officer, after a couple of years...and things seem to be going well....
     
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  12. Teej

    Teej Well-Known Member

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    Had enough equity in the place we were living to refinance and buy our dream land to retire on. By the time we were ready to move down here had enough equity built back up to pay for a nice double wide and build a 3 plus car garage. Had already redone the barn and put new fencing up in the 4 years between buying and moving.
     
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  13. sammyd

    sammyd Well-Known Member

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    We rented a place with 2 acres years ago. Landlord was a good guy we were never late with the rent or on the payments for a used car we bought at his car lot.
    House did have one big issue which was a shared well.
    So after a couple of years he offered it to us at a discount
    We didn't have the downpayment so he fronted us 10,000 of it and upped the selling price to get that back. We also had to pay him a bit on the side to cover the capital gains on that 10000.
    We got an ARM through a mortgage company and worked on our finances for the 2 years till the rate was able to be adjusted. We refinanced through a local bank at a decent fixed rate.
    We have used the equity we built up to purchase an ajoining 7 acres a few years back and last year the wife borrowed against her 401 to buy the acre next door and end the shared well issue.
     
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  14. Klowe

    Klowe New Member

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    My husband and I had wanted to buy a place of our own - in the country - for a very long time. But we couldn't afford to do that. We couldn't afford to save up a down payment. We were living paycheck to paycheck most of the time. We also had crappy credit. Finally, we decided that we would cut our expenses to the bare minimum and save whatever we could towards a down payment and get our credit cleaned up - no matter how long it may take. Something strange happened the very month we made that decision.

    I saw an ad on craigslist. Actually, I saw TWO ads that were posted by the same person. One was for four acres and a one bedroom cabin, and the other was for four acres and a two bedroom mobile home. The ad said that owner financing was available. I called just to see what the down payment and monthly payment would be for the 2 bedroom. My mother in law moved in with us a couple of years prior to that, so although our children are grown and gone, two bedrooms would be necessary.

    The lady I talked to said that someone had already made an offer on the 2 bedroom, but that she had a one bedroom cabin for sale just across the lane from the 2 bedroom. Since this wouldn't be big enough, I thanked her, but just before we hung up, she asked for my name and phone number in case the current deal fell through. I gave it to her, then promptly forgot all about it.

    Two weeks later, there was a message on my voice mail from that lady. The deal on the 2 bedroom HAD fallen through. The guy who was planning to buy it was supposed to be transferred to this area by his company, but the transfer did not come through, so he backed out of the sale. The 2 bedroom was available, as was the 1 bedroom across the lane. I didn't call her back...we had decided to save money and clean up the credit.

    A week later, my husband said that when we were ready to buy, he would be interested in finding enough land for two houses - one for us, and one for his mom. I mentioned the land with the 2 bedroom and the 1 bedroom. Him and his mother wanted to know why on EARTH I had not called that lady back?!?!

    So, to get out of the dog house with them, I immediately called her back, thinking that the 2 bedroom was probably already gone. But it wasn't. Neither was the 1 bedroom. We made an appointment to meet them the following day to look at both properties.

    The minute we drove up, I was in love...and everything fell into place. I told her point blank that we had terrible credit. She said credit didn't matter. I told her point blank that we did not have a down payment saved up. She asked me if we would be able to pay a little extra each month for a while to pay out the down payment. Based on the $850 a month payment (which included BOTH properties), I told her we could pay an additional $250 a month. She wanted $3000 down, we settled on $1500. Initially, she wanted $1000 a month on the mortgage...we settled for $850. It somehow all worked out, and we moved in 2 weeks later.

    I think it is all just a question of finding the right deal, at the right time. I also believe that God puts you where he wants you when he wants you there :)
     
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  15. Terri

    Terri Singletree & Weight Loss & Permaculture Moderator Staff Member Supporter

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    I am really impressed with all of the different ways that people have been able to buy land!
     
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  16. Alice In TX/MO

    Alice In TX/MO More dharma, less drama. Supporter

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    Answer to the question above about buying houses on a teacher salary. We were a two income family. However, we are quite frugal.

    I didn't have a mortgage on my home. I bought small homes at depressed prices for cash.

    For example: a small home on 1/3 acre for $10,000. Did repairs myself. Rented it out. Saved for next purchase.

    Purchased a small three bedroom house that couldn't be sold to anyone else. Not enough land for a new septic system after the laws changed. We owned the contiguous acteage. Only paid $25,000. Did clean up and repairs myself. Rented out for years to nice dependable family. Saved for next house.
     
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  17. ognend

    ognend Well-Known Member

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    I am not knocking your story but there are a few points that should be noted in it:

    1. You were a two income household and there is no information on the second income. Was it another teacher or was it a CEO? We don't know.
    2. Your own home had no mortgage. Was it paid off? Was it inherited? If it was paid off, how did you do it? How fast? So on and so on.

    My point is that you can find these stories all over the net. The problem is, nobody gives you full disclosure into their finances. So, the story is incomplete :)
     
  18. Terri

    Terri Singletree & Weight Loss & Permaculture Moderator Staff Member Supporter

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    There is a more accurate way than "full disclosure of finances" The following is what the schools in this nation do not teach their students.

    BECAUSE each household has different needs a different amount to live on (a single person can live in a studio apartment while a family with 10 lively kids should not), it is not the full finances that counts but THE AMOUNT OF MONEY YOU CAN DO WITHOUT!

    As I shared in an earlier thread, for my family that was $150 per month. That was how much I had after I cut our expenses to the bone, cooked from scratch more and got books on inexpensive cooking from the library, and reduced my driving by consolidating my errands so I drove less. And, when we did buy land and the payments were $160, which is slightly greater than the $150 that I had been putting into savings each month, I got SERIOUS about saving gasoline, which made up the difference, rather than dip into the money we still had in savings. It had taken me a long time to save that money, and since there was 250,000 miles on my vehicle I kew I would need the cash soon.

    By the same token, if a spouse decides to work in town to save up money more quickly, the expenses of having a second person on the work force must be taken into account. One of those greater expenses of having 2 people working will be a higher food cost, as now that (possibly) 2 people are working the scratch cooking may take a lower priority than helping kids with homework, sitting down and paying bills, etc.

    Getting everything done efficiently is a popular topic of conversation at homesteadingtoday, and for good reason!

    So, AFTER you have figure out the costs of what you feel you need- for me that included eating well, with *MEAT* and salads and such and for DH that included cable TV, - THEN you know how much money per month you have to use on what you want to do, such as buying land. Many people who go with land contracts manage without a down payment, but I do not trust land contracts. Instead I put that money in a separate account, and added in pretty much EVERY bit of stray cash that came our way, including the contents of the penny jar. I was saving it for a down payment on land, so I was motivated
     
    Last edited: Sep 28, 2017
  19. AmericanStand

    AmericanStand Well-Known Member

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    I probably should bring this up in a separate thread but there are ways of those without a lot of resources can obtain significant portions of farmland. Weirdly enough the US government offers one of those it is the limited resource farm ownership loan. At a time when interest rates were 28% and banks were requiring 25% down I am obtained my original Farm loan. The terms were 5% interest no down payment required ,40 years to pay payment once a year conveniently scheduled after harvest. Currently I believe you can borrow up to half $1 million under that loan program. There are also women owned and minority owned loan programs. I guarantee you will jump through a lot of hoops but is it worth it to you?
     
  20. ognend

    ognend Well-Known Member

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    Nah, I think the best way is full disclosure of these things.

    For example, my wife and I bought a mobile home foreclosure on 5 acres in the famed TX hill country. We borrowed money to pay for it (put down 3%). I am an educated professional and so is she. We both worked full time, lived in this home and renovated it for 3 years while we lived in it. When we bought the place it was grazed down to nothing, lots of damage to the land and home. We put in a horse shelter, hay storage barn, riding ring, fencing and cross fencing, organic gardens, rehabilitated the land, you couldn't tell the home was a mobile by the time we were done. Did everything ourselves with the exclusion of doing the dozer work on the arena. At the end we sold for a very handsome profit because the place was near a city that was exploding in newcomers who were also educated professionals and were looking for a "green" lifestyle in the Hill country. On this home we made money. At the time we also had a home in Florida (with a mortgage) we were renting out - it was our original/first home we bought in 2007 right before the market crash. We had rented out this home after we left Florida for a rent that was lower than the mortgage. It took 10 years for the price to come back up to the place we could sell it AFTER extensive renovations. We lost money on this one but less than what we had made on the rehabilitated mobile home. Net, we came out positive, debt free and now have the choice to live anywhere we want in the country, provided we can find high speed internet (I have the ability/liberty to work from home). We never inherited anything here, we have no family in United States that has anything of significance to leave/give us.

    There you go, full disclosure without mentioning numbers.

    The teacher story did not go that transparently. First it looked like it was only the teacher doing the paying and the work, which immediately raises doubts, made it sound she did everything herself on a teacher's salary. Then it was teacher and another income..... THAT makes a world of difference. We now know they started this process of buying/rehabbing homes with a paid off mortgage on their first home. We still don't know how they paid the mortgage off to begin with or if they inherited the home. Makes a BIG difference as not everyone can inherit something of value.
     
    Last edited: Sep 29, 2017