Found a place, now how to afford it.

[terra8186]

Have you actually talked to a lender? A 30 year fixed rate mortgage MIGHT not be affordable; but a lot of ranchers/hunters around here are signing up for 50 year paper. I don't recommend it; but it works for some people.

For a 100,000 loan with a 6% interest rate.
30 year loan is a $526/monthly payments
50 year loan is a $600/monthly payments

I wouldn't recommend this either. You are almost paying the same payments, but pay for an additional 20 years.

 

[upfrombottom]

I'm all for helping people out. I purchased my first two peices of property, because and only because the owner was willing to help me, and I have done the same for other people on property I owned.

Ever hear of a lease to purchase agreement. Basically its a win/win for the seller and the buyer. I don't know if it is legal in your area but it is definitely something to check into. Basically its an agreement, between you and the land owner, where you make agreed upon payments on the land as if you were leasing it plus interest. If you default on the agreement, all payments are considered rent and you and the owner just part ways. Basically he is financing it for you. His benefit, financing it helps with his capital gains taxes, and he will gain a great deal more interest than he can on any other investment with hardly any risk.

 

[MillIron]

MillIron
I was raised in a small town on a quarter acre lot and never inherited a square foot of land. Under those circumstances I have still managed to acquire some decent acreage using various plans. I suggest that you have a one on one conversation with the current owner(s). Be honest and tell them your situation. Ask them is there any way that you could come to an arrangement to where you could over time become the owner and that in turn you can improve the place and share some of the income. Explain that they have nothing to lose because if you cannot met the obligations they can take the place back and it will be better than it was when you received it. The best enticement is if you can show some down payment as good faith. You may be surprised at the outcome. If you can work this out, hire a lawyer to document the arrangement. Good luck.

Thanks. I'm going to try something very much like that.

 

[I luv herfrds]

Definately look at a lease to own agreement with the seller. Some guys are willing to do it. they get the money and not the bank.

GMN suggestion was a land deal the hubby and I were in and I would avoid at all costs. You pay mainly the interest and very little principle. Then you have that ballon payment at the end and you refinance? you pay for the place twice. Know another couple that did the same thing and their balloon payment was $300,000. they had to refinance and they are in their 50's. Told me they believe the debt is going to go to their kids.

 

[TexasBred]

I operate on lease land also. Land today is a separate issue and should be considered for investment and not as part of the cost raising cattle.
Maybe consider a smaller tract, as investment, resell at a profit. Do this over and over while gradually acquiring larger properties each time. During this process, of course, you must continue to lease.

Nova one of the best deals I ever made was a long term lease on a piece of property with an option to buy at the end of the lease. IF I executed my right to purchase the land the owner would give me credit for half of what I had paid in lease money toward the purchase price. I accumulated more equity that way than I would have ever accumulated during the same period with a loan. Have never been able to do it again but that time it worked great.

 

[larryshoat]

Definately look at a lease to own agreement with the seller. Some guys are willing to do it. they get the money and not the bank.

GMN suggestion was a land deal the hubby and I were in and I would avoid at all costs. You pay mainly the interest and very little principle. Then you have that ballon payment at the end and you refinance? you pay for the place twice. Know another couple that did the same thing and their balloon payment was $300,000. they had to refinance and they are in their 50's. Told me they believe the debt is going to go to their kids.

Any loan works that way, depending on the rate and length of the loan. The beginning is almost all interest and the end is almost all principal.
If you negotiate a lower rate and shorter term it will help.

I would offer a deal that is more than they can get for the money in the bank, but considerably less than a conventional loan, with no prepayment penalties. Pay as much as you can as quick as you can and the balloon will be easier to deal with.

Larry

 

[tncattle]

http://www.superpages.com/supertips/wha ... tgage.html

It's simply more risky, that's a fact.

 

[TexasBred]

http://www.superpages.com/supertips/what-is-a-balloon-mortgage.html

It's simply more risky, that's a fact.

There is always risk with an ARM. Consider your beginning point. If you begin with a very low interest rate chances are that the rate can only go one direction and that is UP. If it begins high as was the case 20 years ago about all it could do would be to go down. Right now I'd say the chances of an ARM being renewed at a lower rate in 5 years would be slim at best. Rates in general even on fixed rate loans are still good....lock it in and live with it. Make a long term loan in order to get contractual payments low but then make payments based on a much shorter amortization. If money gets tight you can always drop back to the contractual payment.

 

[MillIron]

Right now, I think my best option may be to buy cattle and lease the ground.

I'm looking at cashing in my retirement, which is most of my savings, and buying cattle with it, if I can find the ground to lease. Insane idea?

 

[dieselbeef]

yep..theres gotta be a safer place to put yer money and use it as collateral. if ya lose all the cows or your lease and ahafta sell yer screwed up yer retirement.
put the money somewhere safe..cd..irs..roth...whatever..and the use the funds for callatoral. worse case is ya hafta pay back the borrowed moneys if you would happen to lose some or all of it. then yer ret would still be avail if ya had to have it

 

[Brandonm22]

Right now, I think my best option may be to buy cattle and lease the ground.

I'm looking at cashing in my retirement, which is most of my savings, and buying cattle with it, if I can find the ground to lease. Insane idea?

I hate to say this; but if you don't own ground I can't see cashing in ALL of your financials and putting them in to cows. If somebody left you a thousand acres, sure go for it and spend all your money on cows to put that land to work. If you have $500,000 in cash, stocks, bonds, and annuities and want to put a $100,000 of that into cows on leased ground go for it and diversify the portfolio. Putting ALL of your chips on the table and gambling them on cows is awfully dangerous, particularly if your old enough that you can't replace that retirement. I can't recommend taking that much risk.

 

[dun]

If you're bound and determined to cash in your retirement, buy land.

 

[TexasBred]

Right now, I think my best option may be to buy cattle and lease the ground.

I'm looking at cashing in my retirement, which is most of my savings, and buying cattle with it, if I can find the ground to lease. Insane idea?

Absolutely....unless you want to keep working until you die.

 

[GMN]

Right now, I think my best option may be to buy cattle and lease the ground.

I'm looking at cashing in my retirement, which is most of my savings, and buying cattle with it, if I can find the ground to lease. Insane idea?

Absolutely....unless you want to keep working until you die.

Yeah I would say that was a insane idea-wouldn't cash in your retirement fund to buy cattle and lease land, maybe do that on part if you can buy some land-I sure wouldn't lease land though.

 

[RD-Sam]

Right now, I think my best option may be to buy cattle and lease the ground.

I'm looking at cashing in my retirement, which is most of my savings, and buying cattle with it, if I can find the ground to lease. Insane idea?

If I was going to cash in my retirement I would put the money down on the land. See if the owner will finance, owners want to sell and can't because banks won't loan money right now. Make sure you know what the current market value is, land prices have dropped along with housing. I bought a small piece a few months back, the guy was asking $25k for it about a year ago, ended up selling at $18k and owner financed at a better rate than the banks. Go as short of a term on the financing as you can stand and get it paid off. Land values most likely will only go up from here, but it will take quite a few years for them to get back where they were before the market crashed.

 

[TexasBred]

Land values never went down here and banks never quit lending to folks who had good credit and a reasonable down payment. But owner financing is available sometimes but typically you pay a little more for it because they figure there is some other reason you don't want to go thru a commerical lender.

 

[RD-Sam]

If the land is only a couple of hundred dollars an acre, I could see it not changing much. Around here, the cheapest you could find anything that wasn't a swamp was about $3000 an acre, now it is down around $1500 - $1700. You can have the best credit in the world and you will have a tough time getting a loan on land around here right now. I know someone with an 810 credit score that tried to buy a $240,000 home with $150,000 down, the banks wouldn't loan on it. Before the market crashed the house was listed at $465,000. I guess some areas are just worse than others.

 

[Aero]

Any ideas? I'm willing to entertain any possible solution.

the best deal i have come up with is the interest-only owner-financed purchase and if you cant make the payments, it goes back to them. purchased at the right terms, it's not much more than leasing good land and you have some equity in it. it works better for the seller as well because the seller wont have to pay a ridiculous portion to the IRS and will have predictable income for a good while. with smaller payments over time the amount of money lost to taxes is significantly reduced. the seller has some motivation to give you help/advice as well. you can usually get better interest rates this way with the seller (not some corporate BS rule) deciding what his money is worth.

there would have to be some money upfront to the seller (1 yr of interest) that gets everything off to a good start.

 

[Aero]

I'm looking at cashing in my retirement, which is most of my savings, and buying cattle with it, if I can find the ground to lease. Insane idea?

wait til you see what the tax penalty is... then you will know the answer without a doubt.

try finding some steers to graze for someone (or a bunch of people). a lot less money upfront and a lot quicker return on your investment.

 

[sunrise angus]

Howdy all,

I live in western, NY southwest 60 miles of Buffalo. Seems noone thinks we graow cattle here so hard to find things. I just sold all my angus cross to go into seed stock. I have a dozen good bloodline cows/heifers and just calved 2 and 3 more on the way.
I am leasing a farm which has a barn, 40 acres, home. So here is my problems. We moved back here from NC (we grew up here but company moved us all the time) after 30 years. I didn't have time to wait to sell my NC home and lot I owned. I kept up my 1500/month nc mortage and my 800 here and things were tight already getting moving stuff and buying all new condiments and stuff. So my credit took a tank.

I really would like about 40-60 acres with a home, barn, and workshop and of course fenced.
I don't think a normal wall street banks HSBC, Wells Farge, etc. Anyone have any ideas who may see the situation and lend.I could afford 1500-1900/months mortage so the cash flow is there. The credit was excellent prior to the move. Any one offer any advice, suggestions or a gun to put to my head?

Regards,
Les
Sunrise Angus