Buying property?

[Wildabeest]

So with that it’s in their name now? Or do you have it still in your name and have to do a second closing once they have fulfilled their obligation? Who is handling the taxes?

It’s in their name and I have a mortgage lien on it. Escrow company collects and pays taxes as part of their monthly payment. I could have required them to also pay insurance via escrow, but the value is more in the land than the cabin, so I didn’t require insurance. Insurance is tough to get up there since it’s off grid. Buyer put 30% down, so I don’t feel like I’ve got much risk unless a wildfire goes thru and wipes out the whole side of the mountain.

When the balloon is up, he’ll need to pay it off and I would need to file paperwork to release the lien - likely thru the existing escrow company. Or we jointly agree to refinance it, in which case the escrow company would do another minimalist closing. If he sells before then, my payoff and lien release would be part of that closing.

 

[Robert N]

To the OP: if you can swing it, do it. Just, do it.

I have two neighbors…one owns 9 acres (*my plot is 1 acre of the original plot) and the next neighbor has 5 acres.

They’re both just hitting 80…I just turned 56.

I’d love to own all of it…probably a solid $1M large at this point. If I could do it, for sure.

The alternative is 200 acres of hunting property. Maybe more.

I cannot maintain 15 acres of property with three homes on it. It’s just not there…my life doesn’t give me that option.

If you can do it…do it.

 

[buckbull]

The only land deal I regret is the ones I passed on. Lake Lots in my neighborhood were going for about $68,000 in 2005 when I bought mine. Housing market took a dump in 2008 and my neighbors were going through a divorce and had to sell. Could of bought that lot for $20,000. At the time we had 2 kids under 5 and my wife was staying home with the kids. Between illinois property taxes and hoa and mowing fees it would have been a $3000 yearly expense. The lot went thru multiple owners and was sold again for $280,000 last year. I was worried that the expense would outweigh the appreciation. I'm a dumbass. Dont be like me.

 

[rjthehunter]

Buying land is always a good use of money. Lots of good suggestions here, but I'd say talk to the neighbor and try to get them to throw out a number. Use that to determine their expectations and go from there.

Another option would be find out what they paid for it. Should be pretty simple to find. Then compare it to what amount you'd spend. It would sound good to say "does doubling your investment in it sound fair?"

 

[Addicting]

The only land deal I regret is the ones I passed on. Lake Lots in my neighborhood were going for about $68,000 in 2005 when I bought mine. Housing market took a dump in 2008 and my neighbors were going through a divorce and had to sell. Could have bought that lot for $20,000. At the time we had 2 kids under 5 and my wife was staying home with the kids. Between illinois property taxes and hoa and mowing fees it would have been a $3000 yearly expense. The lot went thru multiple owners and was sold again for $280,000 last year. I was worried that the expense would outweigh the appreciation. I'm a dumbass. Dont be like me.

That is kinda the struggle we are going thru. I actually gave my employer my last day notice of Oct 6th. The plan is to live off my VA and Army pension. Drive as a substitute buss driver for the school’s athletic department and spend time with the kids while they are still with us at home for the next 6 years or so.

This fell into our lap and taking on 100+k in additional debt doesn’t fit that plan at all. Especially since we know we are not in our forever home. Were that forever is going to be is in contention. Makes this decision very difficult.


Change financial plans for the next 6-8 years to afford the investment?

Or

Pass and stay on track. Roll the dice with the new owners not developing it into a subdivision or hog farm.

 

[Addicting]

Buying land is always a good use of money. Lots of good suggestions here, but I'd say talk to the neighbor and try to get them to throw out a number. Use that to determine their expectations and go from there.

Another option would be find out what they paid for it. Should be pretty simple to find. Then compare it to what amount you'd spend. It would sound good to say "does doubling your investment in it sound fair?"

They paid zero! They only had to do the title work from their family. It is a bicentennial family farm that has been left to go back to nature the last 30 years.

Both their kids are pretty successful and don’t live near here. They don’t want anything to do with it and are good with mom and dad selling.

The parents have taken a shine to me and my boy. They see in us what their Dads aspersions were for the property.

 

[rjthehunter]

They paid zero! They only had to do the title work from their family. It is a bicentennial family farm that has been left to go back to nature the last 30 years.

Both their kids are pretty successful and don’t live near here. They don’t want anything to do with it and are good with mom and dad selling.

The parents have taken a shine to me and my boy. They see in us what their Dads aspersions were for the property.

I'd ask them to give you a starting point then. "To prevent me coming up with an unrealistic number, can you give us a starting point for my wife and I to discuss what's in the financial realm of possibilities?"

Or pay it forward with the expectation you do the same someday! Although I've never heard of that working.

 

[Redmt]

I went through the same thing a few years ago. I figured up what the property was actually worth to ME not any market value. I guestimated what I thought the property was worth to them as they were wanting to sell. The property originally sold for 49k in 1984. It resold for 89k in around 1995. In 1999 they put it on the market for 200k with zero prospects. In 2002 I bought it for 50k.

 

[95tigerbill]

See if you can have them donate the land to the nature conservancy. That way it stays undeveloped, they have zero tax burden, and their dads aspersions remain intact.

 

[Addicting]

See if you can have them donate the land to the nature conservancy. That way it stays undeveloped, they have zero tax burden, and their dads aspersions remain intact.

They liked it’s being worked again. Letting it continue to go feral doesn’t help. It’s choked full of Autumn Olive which is killing it. 20 of the 30 acres is so thick rabbits struggle to get thru it.

There is probably 20k worth of clearing to get it back to usable condition where it could at least be brush hogged.

 

[Steiny77]

I've purchased adjoining properties to ours on four different occasions.
The long & short answers is ........ Pay whatever you have to pay to get it. Might sting a little at first, but you won't regret it long term.

Had some real dirt bags next door on an adjoining twenty acres, modular home, place looked like a dump, junk cars, dogs & cats running loose, loud dirt bikes, etc.
The dude got foreclosed on and we bought the place at sheriff sale. I cleaned everything up, removed the modular, burned, buried and leveled everything and put the ground back in trees and meadow.
Peace and quiet on that side now.

 

[squirrel]

Some of the above advice is just plain bad. Search with proper filters the big RE sites. Make sure the dirt is comparable. (timber, tillable, swampy, too steep for anything... etc.). Stay recent, stay local, recent more than local if not much is available. One year ago in todays market is the Stone Age. Figure it per acre then apply that # to your acres. Investigate any mitigating factors like easements or improvements. Use pixie dust to adjust for them in your SOLE SUBJECTIVE OPINION...

This will be market value, has nothing to do with your purchase price since you probably dont want to pay market value.

edit to add search SOLDS... for sale is BS #. Forgot how naive some folks are about RE.

 

[Dave N]

Maybe tell them that while you appreciate the offer it's a bad time with you leaving your job. With all of the work needed to get the land cleared or "fixed" to where it was good for wildlife or just not a jungle anymore, you could only see paying around $75K. Explain that since nobody has been able to come up with a starting number that you hope that they weren't offended if they had something else in mind and they could counter back if they did. You never know just how much they like you and your family and there might be a real bargain to be had. $2500/acre is pretty cheap but at least it would get the ball rolling in negotiations.

On a side note, sometimes fire departments have practice fires for training purposes. You may try asking them if they were interested in practicing a brush fire situation and get a lot of the land cleared that way.

 

[Redmt]

Deduct the cost of returning it to a usable piece of property from whatever price you deem as fair. Clean up or rehab of dirt isn't cheap. Personally, I would consider burning piles but not a clearing burn. Whatever doesn't burn is a terrible mess to deal with. I have first hand experience on that one.

 

[mevertsen]

I was all in for buying it, then you said this is not your forever home.

So when you sell, who knows what the new buyers will do.

If you plan to die there, absolutely find a way to buy.

If you plan to retire soon and move in the future, I would pass.

 

[Addicting]

I was all in for buying it, then you said this is not your forever home.

So when you sell, who knows what the new buyers will do.

If you plan to die there, absolutely find a way to buy.

If you plan to retire soon and move in the future, I would pass.

Yep, we are 10 years here then who knows where. We have to get the kids thru this school system.

We had a pot farm move in just west of us. We have a predominantly west to east wind current. All fall our place stinks of pot.

The property solves the control issues of what those next 10 years looks like and retaining property values.

Pot farm and then a hog farm or house in the back yard is not good for our resale value.

 

[MtsPSU]

Yep, we are 10 years here then who knows where. We have to get the kids thru this school system.

We had a pot farm move in just west of us. We have a predominantly west to east wind current. All fall our place stinks of pot.

The property solves the control issues of what those next 10 years looks like and retaining property values.

Pot farm and then a hog farm or house in the back yard is not good for our resale value.After

Do your due diligence on the property. Decide on what you can afford and have a conversation with the neighbors.

We purchased our farm this way and paid significantly less than the appraised price because they wanted my family to have the farm and there was no way my wife and I could cover the appraised price. Another poster mentioned this and we did something similar--ask if they will carry a portion of the loan for up to 15 years at a fixed apr. Helps them with cap gains and gives them a monthly income check. We've purchased several properties this way and it gives you time to build additional equity that you can pull out when rates drop and you refinance (hopefully soon!). In our case, the sellers are in their early 80's and if their Wills mature before we pay them in full payments are directed to a trust they established.

Buy it.

 

[Dakotakid]

It sounds like it is probably a worth while investment even if your house is not your forever home.
When the realtor said it was worth outrageous $ it probably is. Purchasing at a neighborly rate is probably worth immediate equity in the property.
Carving it off into a separate parcel, depending on subdivision regs might be smart.
if you move and sell your house, you can then also sell the 30 acre parcel.

 

[Addicting]

Had breakfast with the owners this morning and discussed the property. I took 4 comps with me from Zillow and Land.com. One from Zillow almost supported the 200k figure the realtor said. It was 100% production farm land and a stark difference between what this property is. The three other comps averaged out to 5200 an acre for wooded hunting land with food plots / trails. This could be in that price range. It would require significant time and equipment for about half of the property. I can do the work to get it there but my buy in would be lower because I am going to have costs to do the reclamation. We figure that about 10 acres of the land is completely unusable without reclamation due to the autumn olive.

Gave them all of that along with a map of their parcel. We discussed where we were are at with our goals and what it would take to incorporate this sale into them.

Lots of good conversation and I think I gave them enough info to talk with the township about the split/splits. Everybody left feeling good about the path ahead.

Ball is in their court to do with it as they please. If that involves us, we would be happy to oblige within our constraints. But they know where we stand and what our future would look like with it.

 

[gwhunter]

They liked it’s being worked again. Letting it continue to go feral doesn’t help. It’s choked full of Autumn Olive which is killing it. 20 of the 30 acres is so thick rabbits struggle to get thru it.

There is probably 20k worth of clearing to get it back to usable condition where it could at least be brush hogged.

I saw you said that you already talked to them about it, so this recommendation may or may not help, depending on your goals for the property.

My parents bought their forever place in 1981 after the farmer of the time converted his ag-fields to 10-acre parcel subdivisions(township rules at the time only permitted 10 acre minimum splits). My parent bought 3 parcels and put their house in the center parcel. Fast forward to 2010 and the two side parcels, 10 acres each, were so choked with Autumn Olives you couldn't even walk through it. My father talked to the largest farmer within 10 miles and agreed to have the farmer clear the fields in exchange for a number of years of "free rent" to farm corn/beans. If I remember correctly it was between 3-5 years.

Farmer came in with a dozer and pushed them all into a big hole he dug in the center of each 10 acres. Then a tractor with a big enough plow and disk to cut right through the remaining roots and they were in business. Did it all in a weekend. Waited a year for the pile in the middle to dry and then lit it on fire and then farmed on top of the ashes.

It ended up making a significant impact on the wildlife sightings and hunting setup. Some positive, some negative. Either way, the property was cleared for no out of pocket cost to my folks and it setup 2, 10 acre parcels to hunt near. If the people you are buying it from are interested into it turning back into productive property and it aligns with what you would want for the property, there may be some farmers near you who would be willing to work out a deal in exchange for free land-rent.