Seeking advice for farm/land purchase!

[mjensater]

Here is a quick synopses of my situation:

My grandmother wants to sell her family farm so she can pass her daughters the inheritance while she is alive. I am the only grandson and have offered to buy the farm. She has offered the farm to me a s substantially discounted price. The farm (16 acres) includes a home, barn, a few shops etc.

The numbers:
The most current appraisal is $78,000.
She has offered it to me for $30,000.
I have about $8,000 in savings I could use as a down-payment.

The details:
I do not live in the same state.
I do not have a home, I rent.
I do not plan to move into the home for at least 5 years, if ever.
I have never had a mortgage.
I have the intent to sell letter.
I could rent the property and home, I have renter(s) willing at this time.
The home is not in very good condition.

Here is what I need help with:

Do I try and get a home mortgage for the the property?
Do I need to live in it?
Can I disregard/condemn the home since its value is so low?
or
Do I get an investment property loan?
Do I get a vacation loan?
Do I get a primary mortgage? Or can I if I'm not living it it?

To be honest I really have no idea where to start and would appreciate some good advice/ideas on my situation. I'm not savvy at investment so I need the basics first!

I'm willing to return help in anyway possible!
Thanks in advance!

[tripods68]

Suprise no one has responded to your inquiry. Answer these questions first.

Do you have a job? If so, how much do you make?

Do you owe anything (credit cards)?

Do you have retirement/taxable investment? If so, how much do you save?

Can you tolerate a $30K loss scenario?

How old are you? Are you married with kids?


Do you really want to move to this property? If so, how can you afford it.

[LuxLiving]

All else aside I would be worried about other family members (girl cousins or your sisters if you've got any) having hard feelings that you got the only chance at it. If Gran is just offering it to you and you alone I'd be asking her to make the opportunity available to everyone. Then, if she says, "No dear, I want you to be the one to buy it.", you'd be all set if in the future you heard grousing and grumbling!

I have no idea where to start on obtaining financing except maybe by calling your local county extension agent or the one in the county that the farm is located in and seeing what kind of governmental programs there are for farm purchases.

Good luck!!! Do you have a decent credit rating to begin the mortgage search with?

[Duchesse]

Originally Posted by mjensater

Here is a quick synopses of my situation:

My grandmother wants to sell her family farm so she can pass her daughters the inheritance while she is alive. I am the only grandson and have offered to buy the farm. She has offered the farm to me a s substantially discounted price. The farm (16 acres) includes a home, barn, a few shops etc.

The numbers:
The most current appraisal is $78,000.
She has offered it to me for $30,000.
I have about $8,000 in savings I could use as a down-payment.

The details:
I do not live in the same state.
I do not have a home, I rent.
I do not plan to move into the home for at least 5 years, if ever.
I have never had a mortgage.
I have the intent to sell letter.
I could rent the property and home, I have renter(s) willing at this time.
The home is not in very good condition.

Here is what I need help with:

Do I try and get a home mortgage for the the property?
Do I need to live in it?
Can I disregard/condemn the home since its value is so low?
or
Do I get an investment property loan?
Do I get a vacation loan?
Do I get a primary mortgage? Or can I if I'm not living it it?

To be honest I really have no idea where to start and would appreciate some good advice/ideas on my situation. I'm not savvy at investment so I need the basics first!

I'm willing to return help in anyway possible!
Thanks in advance!

Depending on how much of your cash you use for the downpayment and your credit score you can probably qualify for a mortgage. Since it's not your primary residence it can be bought as a vacation home or an investment property if you rent it out.

But before you do anything think long and hard about renting out of state.
I'm no Donald Trump or Leona Helmsley but I have done some real estate and renting in another state is a NO NO especially for a novice.

Who will you call upon to manage and maintain this property while you reside out of state? What will you do if they don't pay the rent and ignore your phone calls and letters?

You said you plan on selling it later. Family members might resent you getting it so cheap and selling it for a profit.

The numbers $$ sound right but the circumstances could be wrong.

[mjensater]

Originally Posted by tripods68

Suprise no one has responded to your inquiry. Answer these questions first.

Do you have a job? If so, how much do you make?

Do you owe anything (credit cards)?

Do you have retirement/taxable investment? If so, how much do you save?

Can you tolerate a $30K loss scenario?

How old are you? Are you married with kids?


Do you really want to move to this property? If so, how can you afford it.

Employed now for 10 years, same company. $85,000
No CC debt.
No savings other than the $8,000.. in checking
I can tolerate a $30k loss
32, single no kids.
I don't want to move at this time, I have a good job and do not see myself moving for at least 5+ years.
I want to keep this property in my family, its important to me. My great grandfather homestead the property.

Thanks for the reply!

[mjensater]

Originally Posted by Duchesse

Depending on how much of your cash you use for the downpayment and your credit score you can probably qualify for a mortgage. Since it's not your primary residence it can be bought as a vacation home or an investment property if you rent it out.

But before you do anything think long and hard about renting out of state.
I'm no Donald Trump or Leona Helmsley but I have done some real estate and renting in another state is a NO NO especially for a novice.

Who will you call upon to manage and maintain this property while you reside out of state? What will you do if they don't pay the rent and ignore your phone calls and letters?

You said you plan on selling it later. Family members might resent you getting it so cheap and selling it for a profit.

The numbers $$ sound right but the circumstances could be wrong.

vacation home or an investment property? What is difference when it comes time to get a loan? Different rates? More needed for down payment?
Which is better for my situation?

As far as renting and maintenance, my father still lives in the area and is willing to monitor/maintain. If i do decide to sell later on down the road, I'm sure the family members that remain will not object.

Thanks!!!

[mjensater]

Originally Posted by LuxLiving

All else aside I would be worried about other family members (girl cousins or your sisters if you've got any) having hard feelings that you got the only chance at it. If Gran is just offering it to you and you alone I'd be asking her to make the opportunity available to everyone. Then, if she says, "No dear, I want you to be the one to buy it.", you'd be all set if in the future you heard grousing and grumbling!

I have no idea where to start on obtaining financing except maybe by calling your local county extension agent or the one in the county that the farm is located in and seeing what kind of governmental programs there are for farm purchases.

Good luck!!! Do you have a decent credit rating to begin the mortgage search with?

The family situation has been address, she wants me to have it. I feel very comfortable in that respect! My credit rating as, of last year was 786, or something of that nature. I have no idea if that is +/-

Thanks!!

[Duchesse]

Originally Posted by mjensater

vacation home or an investment property? What is difference when it comes time to get a loan? Different rates? More needed for down payment?
Which is better for my situation?

As far as renting and maintenance, my father still lives in the area and is willing to monitor/maintain. If i do decide to sell later on down the road, I'm sure the family members that remain will not object.

Thanks!!!

How you intend to use the property could affect the interest rates and the downpayment . A mortgage specialist could explain and help you decide which would be better for you.

You have a nearby property manager that you trust and are comfortable with, you have no issue with family members resenting you getting the property , the numbers sound good, you sound like you really want the property and you would be assisting your Grandmother in her goal

Go for it!

[JBinKC]

If this land is tillable I would contact the Department of Agriculture to see where you could get a loan and perhaps qualify under a low rate program.

[lgslgs]

A $78,000 property with an old house, a barn, a few other buildings of sorts, and possibly some kind of fencing.

At those prices, the property is most likely in the sort of rural area where you are going to have problems if you leave it unattended.

Property costs that low mean that the area is to at least some degree economically depressed. That means that it will end up being picked clean of any saleable scrap metal in a short time if it is left unattended.

Renting, and even occupying it yourself won't offer much security unless there is actually someone there a lot of the time, or the buildings are located in sight of decent neighbors who are there a lot of the time.


You've also got a good chance of the property being used for a meth lab, but that would be most likely from renters. Strangers using unoccupied properties for meth production is a lot less common.



Don't buy it unless you can accept that everything that's on the land right now will probably not be there of be in working condition when you are ready to occupy it at some date in the future. That includes any hardwood stands that a neighbor might encroach on timber if you aren't there.

If you like the piece of land so much that you can accept that, and then be able to be onsite for the duration of any future construction of a new houses (to keep from having building materials stolen), then go for it.

But if you only have 8,000 saved toward purchase now, it's going to be quite a while before you'd be able to save enough to leave your job and rebuild on that land. Worth it if the piece of land is really so important that you'd never want to lose it - and that should be based on terrain features and not just on emotional ties.

And certainly don't expect to buy a farm and be able to make a living off of it unless you've got some really good farming experience, a super thrifty lifestyle, and a savings account big enough to get you through several drought years.

BTW - how's the septic, wiring, plumbing and roof at that farm. I'm guessing they probably need work.

Sorry to be discouraging, but in our area the scrap metal thieve industry is a growth industry, and people who used to think they could leave town for a week come back to find their plumbing pipes ripped out and sold, and the rest of the house ruined. Not the place to be an absentee owner. And even having dad nearby to check the place is risky. We've got some of the places around here getting stripped while their owners are at work - just like we're getting car gas tanks drained when they are parked in front of houses with owners home!

One other thing, you aren't going to be able to sell that house without bringing it up to code in that county. Better check what theat means.


Lynda

[tripods68]

Originally Posted by mjensater

Employed now for 10 years, same company. $85,000
No CC debt.
No savings other than the $8,000.. in checking
I can tolerate a $30k loss
32, single no kids.
I don't want to move at this time, I have a good job and do not see myself moving for at least 5+ years.
I want to keep this property in my family, its important to me. My great grandfather homestead the property.

Thanks for the reply!

From what you told me, you can afford it

You also have to start making retirement contributions.