Well I found a Peice of Poperty that we really like. I was not going to try and buy anything for a while but this peice looks really good. 60Plus acres mature timber and 20 acres currently being leased to a neighboring farmer. It has Utilities and well and septic on the poperty also.
what to do what to do
I was going to go talk to the Farm Credit and see if They would loan me money for it. I have never got a loan on Just raw Land so any advice would be apperciated. I have gathered Data about the soil on the land and Property details. what else would they want to see?
It is a tough decision. In my case, I had bought a house in the city that was cheap and affordable because I knew I wanted to buy land and build a house in the country. The city house was a stepping stone. The real estate agent, who was one of the top agents in the city, said I would sell the house in a few years and buy a larger house. She was wrong. We lived in that house almost a decade so we could buy land and build a house. We eventually bought a similar sized parcel as you are considering and the only way that was possible was because of our low house payment.
Even with the low house mortgage, it was less than what I was paying for an apartment, buying that much land was a stretch. The land was worth twice as much as the city house and the payment was twice as much. :shocked: I learned quite a bit about the timber business ASAP, marketed and sold some timber which help pay down quite a bit of the debt. We got lucky and sold at a peak in the timber market. :thumbsup:
We also rolled the dice because we did not have a perc permit. I had two Soil Scientist reports saying that certain areas perced but the county would not give me a permit. The inspector was incompetent at best since he had NO qualifications for the job. He was not a Soil Scientist which in NC has very specific educational requirements. I appealed to the state who eventually over ruled the county but in the mean time we were forced to buy the property or walk away. I think the inspector was being bribed to get us to drop the contract. He could POUND sand long and hard all day before I was letting go of the contract. He was eventually fired. :thumbsup:
Buying was somewhat of a gamble. :laughing::laughing::laughing: We did know that we could timber the place and pull out a bunch of money but we would still be stuck with the undevelopable land. However, we had TWO Soil Scientist reports that said we had percs. I don't think it was much of a gamble but it was a risk from which many would have walked away from the contract.
I mention all of this because we bought the land and built our dream house. It was risky. It still is risky. How much risk are you willing to take and can stomach?
The wifey and I had many a week night conversation until midnight about what we were doing. We even discussed flipping the land before or after logging. We figured we could easily sell and make quite a bit of money that would allow us to buy a very nice city home with little to no debt....
We bought the land, timbered part of it, built our dream house, and sold the city house. It was a busy time as we knew it would be but we pulled it all off. We still have to pay the place off and not all of our plans have worked out. Most of the land is paid off but there is a wee bit of left. The land should have been paid off by now but health bills, life, and a car accident changed the plans.
The place we bought is truly one of a kind. It would not be for sale again. When we were trying to buy land, if a parcel came on the market on Monday, you had better be looking at the land on Monday afternoon if not Tuesday morning. If you waited until Saturday, the land was already under contract. Our land popped up on the MLS one day and the next day at dawn, and I do mean dawn, the sun was just rising, we were looking at the place. We sent a contract either that night or the next day. If we had not done this we would not have gotten the land.
We looked at quite a bit of land for sale. Looking back, most of it was ho hum. Nothing really special. Thankfully we were not able to buy those parcels.
We really got The Place for us.
The easy question to ask, "Is the parcel in question The Place for you?" The answer may not be so easy.
If buying the parcel is a stretch or some what risky, and any debit is risky, how much are you willing to risk and will this risk bother you? Are both of you wanting to buy this land and will the purchase stain the marriage?
My attitude is/was that it was better to try and fail than to never try. Buying land and building the house I designed was something I wanted to do since I was a kid. If I did not do it when we did, when would we? Even if we went belly up so be it. At least we tried. Not doing what we did, walking away, WOULD have been a regret I would have to live with until I died. We could still loose the place since we have debt and I really do not like debt but the debt is manageable and well within our means.
My credit union would not finance much more than 15-20 acres so I had to get a business loan through a bank. You will want to subdivide the parcel to build a house. This will simplify the house loan. NC Farm Bureau might be able to help with the loan as well. I used the bank because a coworker's spouse was the loan officer.
We have had good service though the years with the bank which is not something I can say about the CU.
Can you use the existing septic system? I don't know how that works in NC. If so, will the size of the septic tank and field support the number of bedrooms you will eventually build?
Have you found other perc sites that are conventional and cheap to build or a spray system which is expensive to build?
Test the well for chemicals and does it produce a decent amount of gallons per minute. The well should have a plate listing its depth, static water level and GPM.
What is happening on the land around the parcel? Is there anything planned for the future that you would not like?
Have you talked to the neighbors? They can be interesting to talk too and if they rub you wrong consider that in buying the land.
Has sludge been dumped on the farm fields? The agent should be telling you this if it has happened.
Since the place has timber you need to get a Forrester to inventory the timber after you buy. You might want to do it before purchase. If you sell the timber you need to know what the timber is worth when you bought it. This is called a basis. You don't have to pay taxes on the basis when/if you sell the timber so get the timber cruised. Even if you do not plan on logging, the basis will help whoever inherits your land.
With both leased farm land and timber land you can get a property tax valuation. Make sure you get it because this drastically lowers your property tax bill.
Later,
Dan
