Misfitmorgan's Journal - That Summer Dust

[misfitmorgan]

Geez.

OK so what if the sleazeball current owners take the 20% land contract AT A REASONABLE interest rate and you fix up the "guest house" that burned as you planned. Could you then go to the bank right needing only $36K to pay off your loan? Hmm, or not; you just gave the deposit money to the current owners and now you need another $7,200 Or would they give you a Zero down because you already have 20% equity (and no mortgage insurance )

Yes we could go to the bank needing only 36k to pay it off but the contract was for 5years so when we went to the bank it would actually only be for 26k...unless we went early. The Land contract would be a re-finance and since we would have already paid almost 50% we would have been re-financing it as 0 down with no PMI because we gained more then enough interest in the property at that point.

However, after saying they would do a Land Contract....they have rejected our offer and said they are not interested in a land contract at all now.

The LC we offered was 20% Down - $9,000
Amortized on a 30 year schedule, with a balloon at 5years.
APR 7%
They would have gotten 9k cash and made almost $13,000 in 5years in interest alone. In the end they would actually have made just short of $58,000 on their property instead of the $45,000 asking price.

So anyhow that was my last ditch effort to buy the farm and they rejected it so that's that unless some rich relative i didnt know i had croaks and leaves me 36k lol.

They did agree to lower the rent....called and told us they would lower it to $600/month
$600/month is still way over priced but for now we will pay it.

I have not found anyplace we like that is a reasonable distant from my work. DH wants min 20 acres but would prefer 40 or more, he demands there be barns...not pole buildings but barns and I demand there be a house, i dont care if it is a modular or what but something post 1990 trailer at the very least. I did find one i love and i know DH likes it, it's got 3 barns and a nice house on 80 acres 40% field/60% wooded with a little stream that runs thru it, Only problem is atm it is listed quite high considering it sold for 1/3 the price the end of 2005 aka right before the housing bubble burst and there have been no improvements made to it.

So we are going to pay our stupid rent and watch places that are for sale and see what happens while we save the small amount of "extra" money we have each month.

On the bright side my boss told me i should get a raise shortly(in boss speak sometime between now and 12/31/17) which would be an approx 18% pay increase yearly

 

[NH homesteader]

I'm sorry to hear you're needing to look elsewhere but it sounds like the best (and perhaps only) plan at this point. DH and I lost a good deal of money last year from a business plan that didn't end well (it ended great for the other guy). It's hard to accept and move on but also good to know where you stand.

A raise would be lovely! Perhaps it will help you find an even nicer place soon!

 

[misfitmorgan]

I'm sorry to hear you're needing to look elsewhere but it sounds like the best (and perhaps only) plan at this point. DH and I lost a good deal of money last year from a business plan that didn't end well (it ended great for the other guy). It's hard to accept and move on but also good to know where you stand.

A raise would be lovely! Perhaps it will help you find an even nicer place soon!

For what I make currently i could buy more house/property then i want, i mean it is fun and nice to say oh yes i can afford that $XXX,000 place but do you really wanna pay over $1,000/month plus high taxes...no lol. Ideally i think i would feel comfortable with something around the 95-120k range which would be $400-500/month including taxes and insurance. The only benefit to us waiting is we have the option to pay off my car early and save about 2.5k there and have more fluid income to put back into the savings, still not sure if we will do that or not.

 

[Bruce]

On the bright side my boss told me i should get a raise shortly(in boss speak sometime between now and 12/31/17) which would be an approx 18% pay increase yearly

Whoa, nice!

Time to seriously look at other properties, something will come up, you just need to be looking when it shows up. 7% is ridiculous given bank loans on houses is more like 4%. If you can dump the $100 on your car loan and pay it off early, that is likely a good bet. I don't suppose it is a low interest loan and that can't be written off your income taxes so it is nothing but a loss.

That property you like probably wasn't affected by the housing bubble bursting. They are asking what they HOPE some clueless rich person from out of the area will pay. How long has it been on the market? The price will come down when no "big city slicker that has no idea what it is really worth" comes by and plunks down the asking price or close to it.

 

[farmerjan]

If I had the fluid money I would also give you a private mtg but I just don't. I cannot believe that land prices there are so low compared to here in Va.
If it were me, I would pay off the car early. You will be saving all around, give you a more liquid cash flow to put away towards a down payment, or to just have for an emergency fund once you find something else and can meet whatever down payment you need.
I also would obviously not do one more thing to clean up or fix anything there, and I would be very careful to itemize and take pictures of all equipment that is yours. I wouldn't trust them to not try to claim more stuff that is yours as they have tried to do in the past. Rabbit cages, hay feeders, EVERYTHING. Maybe put it all in one place and keep it together so that it doesn't grow legs...

Also, get the lowered rent payment in writing....for your protection.

 

[farmerjan]

Make an offer on that property that you like, even if it is priced high right now. Since it sold for 1/3 in 2005, offer them half of what they are asking; or see if there are any other somewhat similiar places that you can get a little better feel of a reasonable offer price. Offers don't have to be accepted....you never know...they just might sit on it a little while and if there hasn't been any activity due to the over pricing...they just might decide to accept it, or counter.

 

[babsbag]

I just read through many pages of your journal, somehow I missed many notifications.

Sorry about the dealings with the owners and the financing. Have you considered having a new manufactured home placed on the land? You can get a small one at reasonable prices and then check out USDA (not FSA) for a home loan. I am also surprised that the FSA turned you down as the Farm Ownership loan requires NO current or previous farm ownership requirements. Also, what about a personal loan from a place like Discover, Prosper, or Lending Club? I also got a 50,000 signature loan a few years back from Bank of America. The terms wouldn't be the best but if you own the land it might make it easier to get a refi in a year or two. After refinancing our house last year and buying the land next to us I feel your pain, stuff like this can be impossible.

 

[Bruce]

The problem is that they don't own the land and given how whacky the current owners seem to be, even if they agreed to let @misfitmorgan put a new manufactured home on it (talk about a huge financial risk), they might change their minds on the property or the selling price.

Seems to me all this is just a sign that the property is NOT what they should be buying. "Their" property is somewhere else.

 

[farmerjan]

Yeah, @Bruce , I tend to agree that their property is somewhere else. Too much aggravation, too much work, too much mess, too much fixing up to do, too much BS with the current owners. But I well understand that you see something, think it will be a good deal, start doing stuff, see the potential, and put alot of yourself into it.....but, believe me, life is too short to continue to beat your head against the wall ; OR to saddle yourself with something that will be an even bigger millstone around your neck, down the road.
Misfit...I think you have better things coming, just let it happen. When it does you will say, whew, so glad we didn't get stuck with that other place.

 

[babsbag]

Buy the land with a construction loan. It would lock the current owners into a contract that they can't back out of. As part of the construction loan the house gets placed on the land and then it is converted to a conventional loan when the house is done. It would be the same as buying vacant land and putting a home on it. USDA does not require a down payment either.

As far as this not being "their" spot, that may be the case. Years and years ago I "laid down the fleece" on a house...if the financing went through we would buy it; if not, I would not pursue other options and we would walk away. DH was newly self employed so we had no verifiable income and they wouldn't give us the loan. I regretted that decision on my part for the next 15 years.

There may very well be a better home but I know they like this one so just laying out some options that maybe (doubtful...I'm sure she has covered all her bases) she didn't think of.