Neighbor's Land for Sale????

Discussion in 'Homesteading Questions' started by JAS, Dec 15, 2004.

  1. JAS

    JAS Well-Known Member

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    Ok, what would you do? Our elderly neighbor is putting his land up for auction. There is a 40 acre section that touches our 20 acres. It has 11.3 tillable acres and the rest is trees and pasture. There is a lot of junk (old cars, machinery . . .) on this land and would require new fencing. It does have a stockdam.

    We were not looking to buy more land but have looked across the fence more than once, never thinking he would sell so soon. It has a nice stand of trees for South Dakota. We are trying to justify buying it; what would we do with it to make it pay off?

    We are going to the auction but really don't know what it will go for. They are billing it as a possible building site on a paved road. The banker is all for us trying (more money for him) and is willing to put everything into one loan. He thought we could sell part of it later. He mentioned buying it just to keep "others" from moving into the neighborhood; not sure who he has been talking to?

    What do you think?
     
  2. Tinker

    Tinker Well-Known Member Supporter

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    If you have the funding available, I would go for it in a heartbeat. If someone is looking at it for a commercial venture, who knows what you will be living next to! If something/someone undesirable goes in there, you will be kicking yourself later.
     

  3. kabri

    kabri Almst livin the good life

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    I agree, I would do it. You can always sell later if you need to, but around here, land like that would be sub-divided and multiple houses put up. Yuk. I'm all for upping the land buffer!
     
  4. Freeholder

    Freeholder Well-Known Member

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    I would say, find out what it's actually worth, and get it if you can get it for a reasonable price. In other words, make sure you don't pay more than it's worth. But I would say get it.

    As for what to do to make it pay for itself, I don't know enough about your situation to say for sure, but some suggestions, once it's cleaned up and the fences fixes, would be sheep, stocker calves, meat goats. If there's a big dairy around your area, maybe you could raise heifers for them. Don't do anything that is going to cost a lot to get into, though. You want return, not expense.

    Kathleen
     
  5. JAS

    JAS Well-Known Member

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    We are in a rural farming community. We are thinking maybe a cattle/hog feedlot or something similar might be looking, something that would rip out the trees (had a couple of them looking at our place, actually had it appraised for clearing). I think a few of the neighbors will be looking too.

    Land ranges from low $500 to $1200 around here depending on use. This might go for more if the building site thing kicks in.

    Financially we are stable. One income but not many loans. We need to do a lot with the place we have, the barn is falling in . . . .
     
  6. seedspreader

    seedspreader AFKA ZealYouthGuy

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    But also keep in mind that it may be worth more to you than to others, for the purpose of that buffer... You won't lose money on it for sure.
     
  7. ed/IL

    ed/IL Well-Known Member

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    How is the bidding set up? Do you need a letter from the bank? Big downstoke on that day. You surely dont want a feed lot next door. Perhaps it will go for low end price range.
     
  8. MorrisonCorner

    MorrisonCorner Mansfield, VT for 200 yrs

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    And hey... remember to go through those old junk cars with a fine tooth comb... you'd be amazed what people pay for old car parts on ebay!
     
  9. Mike in Ohio

    Mike in Ohio Well-Known Member

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    It's hard to give advice not knowing the details of your situation. A few thoughts:

    1) Find out early what the terms of the auction are. If there are multiple parcels is it buyers choice? Will be bidding be by the parcel or by the acre? Develop a gameplan and stick to it. Try to be there during any viewing period. Listen to what people are saying. You may overhear people talking about where their limits are. Same thing goes for the day of the auction. Be there early and keep your ears open.

    2) Don't totally overextend yourself just to get the property. Figure out what you can truly afford (Stretching a little bit isn't necessarily a bad thing).

    3)Generally I would recommend against rolling the new property mortgage into your existing mortgage. It of course depends on your existing rate and circumstances. One advantage of having seperate mortgages is that it makes it easier if you have to (or choose to) sell the parcel or part of it. My experience on raw parcels is that the interest rate is about 1 percentage point above regular mortgage rates. Again, it depends on your credit rating and mortgage provider.

    4) Consider what additional costs are involved beyond the sale price. Will you have to pay towards a survey? Things like that.

    5) Definately make sure you review the titlework. You also want to get title insurance (that covers you, not the mortgage holder).

    6) Check the status of mineral rights, water rights, easements, etc. If there is any doubt, ask questions early. Also check for any deed restrictions.

    Hope this helps.

    Mike
     
  10. fordy

    fordy Well-Known Member

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    ...............If , you are comfortable with taking on a land payment , I believe I'd pay a visit to your neighbor , and negotiate with him directly , and try to make a "fair market offer" , and pre-empt that Auction Business . Unless , of course , he is contractually "Bond to let the auction go forward" . It maybe that there is some minimal fee that he\you could pay if you'll could make a deal on his property , fordy.. :)
    ...............And , I'd also verify all the items that Mike in Ohio mentioned . As usual , he has it "nailed" when it comes to these realestate issues , fordy.. :)
     
  11. UncleTom

    UncleTom Well-Known Member

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    Iron prices have been up and around here they have even payed good for junk cars hauled in to the scrap yard.
     
  12. desdawg

    desdawg Well-Known Member

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    Usually property sold at auction goes for less than property listed with a realtor or FSBO. Most auctions require cash buyers which narrows the field considerably. And your banker has just enabled you to be a cash buyer. I would follow the advise given in the other posts and go for it as long as you are OK with the debt.
     
  13. BCR

    BCR Well-Known Member

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    Buy it. I doubt you will regret it and if you do, you can put it up for sale.

    Wishing I had bought nearby land when it was several hundred acres for about $150 K...now it is worth over $500 K and when they sell the development will be a rude awakening. Woulda, coulda, shoulda......
     
  14. JAS

    JAS Well-Known Member

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    I've joked about paying for the place through the scrap (iron) guy, who lives about seven miles from us :)

    There are old building on the land, most are not useable but the others might work for some purpose?

    Can't really negotiate with the owner--he can't remember what he did yesterday much less who I am (we have talked to him quite a few times and we need to re-introduce ourselves each time :( ) He owns this land but lives about 20 miles away. I think some of the relatives have taken over? I am actually worried that if we did get it, we would still have Bill showing up wondering what we were doing!

    It's ours if it goes for $500/acre!!!!!, but most likely it will be twice that or more. A lot of out of state buyers jump at the "cheap" land prices around here. I told the hubby we need to stand beside the banker so he can let us know who is bidding.
     
  15. GRHE

    GRHE Mountain Ogre

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    I look at it as if you can make a go on 20 acres, then 60 should give you enough to hire help, just make sure you don't over bid. The problem is that if if someone pushes the price, that will likely be the owner you don't want to have it.
     
  16. seedspreader

    seedspreader AFKA ZealYouthGuy

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    That and if you would sell it, you could at least have some control as to what goes into the land, development-wise. I know here in Ohio that the previous owner can assign restrictions. A popular one in our area is no mobile homes and no swine. I wouldn't buy land with restrictions (other than the local zoning) but people are buying up pretty fast.
     
  17. Jena

    Jena Well-Known Member

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    Who's been farming it? Cash rent or lease? How much? What are the yields and how do they compare with your area? Those are questions you need to find out. Those 11 tillable acres could very well pay for the place. If you don't want to have someone farm it, you can plunk it down in CRP. There are other conservation programs that could help you pay for it. Go talk to your NRCS office and the FSA office about that ground.

    Jena
     
  18. comfortablynumb

    comfortablynumb Well-Known Member

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    buy it if you can easily afford it. you will hate yerself when a housing plan goes in there
     
  19. Quint

    Quint Well-Known Member

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    I would say buy it. Especially since it is next to your land. Keep in mind that when land goes up for sale it may very well not go back on the market in your lifetime. If at all possible I would buy it in a heartbeat. You can alway sell it later if you have to.
     
  20. uncle Will in In.

    uncle Will in In. Well-Known Member Supporter

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    If you can make the payments with your present income go for it. Counting on extra income from the place might take some time, and you will have to be able to keep up the payments regardless of future plans.