Land Loan

[kl9]

Just remember the stock market goes up and down. When you're ready to liquidate investments could be a point in time in which the market is low. It could force you to wait several years in order to liquidate at a more favorable time.

 

[MoBuckChaser]

And remember, whether you use the banks money or your own money, it will cost you 4-5% either way right now!

Are you saying because land values go up at 4-5 % its going to cost you that 4-5%? For me I can't enjoy a rural property because of my lack of time off.( 10 days a year on the property?) However if I saved money to the stock market I could maybe get an 8 % return over a 20 year period. Then when I am ready to retire purchase the property outright and enjoy it. (i'd still want to make some money on crop rental). I also would still invest in a typical 401k that wouldn't be touched until 59. I already own a small piece of property, but I am torn if I should take a loan out to buy more.

You said the key words, " you could maybe get 8% return, but you could also lose 20%. You don't know that, neither do I.

You do know right now it will cost around 4-5% for a land loan, and after taxes you can make 4-5% in the markets on a realitively safe investment.

 

[Jordan Selsor]

You said the key words, " you could maybe get 8% return, but you could also lose 20%. You don't know that, neither do I.

You do know right now it will cost around 4-5% for a land loan, and after taxes you can make 4-5% in the markets on a realitively safe investment.

An at least you can enjoy the land. Its a tangible investment! Thats gotta be worth something! Whats a guy spend on vacations? Land is a lot more fun than being glued to the daily market updates! I like my investments to be like my woman. I wanna touch it. Not only visible on a computer monitor;)

 

[MoBuckChaser]

An at least you can enjoy the land. Its a tangible investment! Thats gotta be worth something! Whats a guy spend on vacations? Land is a lot more fun than being glued to the daily market updates! I like my investments to be like my woman. I wanna touch it. Not only visible on a computer monitor;)

By the size of your family already, looks like you been touching that hot dish a lot!

 

[Bigshooter19]

If you can't afford the 1500+ dollar a month payment it really doesn't matter.

 

[Jordan Selsor]

If you can't afford the 1500+ dollar a month payment it really doesn't matter.

With a well thought out an executed plan you can change that. I literally did it by mowing lawns. A good partner helps too. If your not making much now work towards changing that. You can do this man!
*edit An by the way the payment aint near that much. Its the down stroke that most guys cant come up with

 

[Bszweda]

You said the key words, " you could maybe get 8% return, but you could also lose 20%. You don't know that, neither do I.

You do know right now it will cost around 4-5% for a land loan, and after taxes you can make 4-5% in the markets on a realitively safe investment.

For a ROI property what's a realistic ROI 3 or 4 percent? If someone is advertising a property as such 3 or 4 % from tilliable. Do you make sure the farmer previously renting the land has a contract with you before purchasing? How risky is leveraging and ROI farm properties?

 

[MoBuckChaser]

For a ROI property what's a realistic ROI 3 or 4 percent? If someone is advertising a property as such 3 or 4 % from tilliable. Do you make sure the farmer previously renting the land has a contract with you before purchasing? How risky is leveraging and ROI farm properties?

Because a property is advertised at a 3% or 4% ROI, that means nothing. Even if a land owner has a signed contract with a farmer, it don't mean he will pay it. If you have to count on that money to make your payment every month, you should not be buying it! Most Lenders won't lend on that payment because it is not guaranteed.

 

[bwoods11]

One of the lenders (that had the best rates) indicated that I would need to sign this form (below) stating that I won't get income from the land. The parcels I am looking at include tillable that I would "likely" rent out. My primary purpose is to hunt and just so happens a few acres can be rented out. Did anyone else come across this in the process. The lender made it sound like my intentions could change after the fact and there isn't language to prevent this... Meaning I could have no intentions at signing, change my mind in six months and no one would do anything... Thoughts?

-
To Whom It May Concern,


This letter is to acknowledge that the planned use of the subject vacant land is not for agricultural or

income producing purposes..

No I have never seen that form. Why they require that is a mystery to me? In my area, they prefer to have income to pay taxes or the payment?

 

[MoBuckChaser]

One of the lenders (that had the best rates) indicated that I would need to sign this form (below) stating that I won't get income from the land. The parcels I am looking at include tillable that I would "likely" rent out. My primary purpose is to hunt and just so happens a few acres can be rented out. Did anyone else come across this in the process. The lender made it sound like my intentions could change after the fact and there isn't language to prevent this... Meaning I could have no intentions at signing, change my mind in six months and no one would do anything... Thoughts?

-
To Whom It May Concern,


This letter is to acknowledge that the planned use of the subject vacant land is not for agricultural or

income producing purposes..

Is it a specialized loan, that part of the conditions to get the low interest rate is for recreation/wildlife only?

 

[MoBuckChaser]

I don't think so, I think it is just their "rec" loan. The lender made it seem that people might "change their mind" after the fact, but I don't want to get into a sticky situation down the road. Still looking for a 30 year fixed rate in Dunn County Wi. Badgerland Financial offers a 30 year at 5.65 right now, but only in southern half of WI. I'll buy a case or two of beer for anyone that points me to a 30 year fixed rate in Dunn County WI:)

Recreation only loan. I would not enter into that agreement that handcuffs you before you even sign the papers.

A 30 year land loan? Never seen one.

 

[kl9]

Badgerland is the only institution I know will go out to 30 years in Wisconsin. It is beyond me why they would want you to sign that agreement for none income producing. Sounds weird

 

[MoBuckChaser]

Badgerland is the only institution I know will go out to 30 years in Wisconsin. It is beyond me why they would want you to sign that agreement for none income producing. Sounds weird

Would that loan run 30 years or is 30 just the amortization? Many loans have a amortization schedule for 30, but the loan term is usually less than that. Or they will charge you a hefty interest rate for that long of a term.

 

[kl9]

Would that loan run 30 years or is 30 just the amortization? Many loans have a amortization schedule for 30, but the loan term is usually less than that. Or they will charge you a hefty interest rate for that long of a term.

30 year amt and term.

 

[mtholton]

That is a 30 year fixed loan. Agstar offers a 20 year fixed 5.8 as of today. Most lenders that I've talked with (probably 10 today) stick with a 3/1 or 5/1 arm. About half of them require a balloon after 10 years, the other half doesn't. I prefer the predictability of a fixed and knowing that if I moved my search a few counties south I could get an additional 10 years for the same interest rate (or even a little less) is frustrating. 20 years at 5.8 doesn't sound too bad either.

 

[MoBuckChaser]

I would never do a 30 year fixed. You will pay high interest for the first 10 years and very little principle. I would opt for a shorter term loan with cheaper interest. Then refinance if you still carry the loan after 10 or 15 years. Most people, not all, sell after the first 5-7 years, why pay all the interest for nothing.

 

[Buckly]

A 30 year land loan just doesn't seem like a good idea. As mentioned, after 5-7 years you still owe almost the whole principle.

 

[Doohop65]

Have you tried united farm credit yet? I tend to agree on not financing for 30 but get the flexibility of the loan. You could take a longer loan and pay it off quickly. Interest will be higher but if something bad happens with income you can cash flow easier for a short time.

 

[mtholton]

UFC doesn't cover the area. They did confirm they do a 30 year in their regions, but only cover locally to each office. Agreed on using a 30 year, but paying off sooner. I just like the protection against rate increases.

 

[MoBuckChaser]

I would buy a ETF before i took out a high rate 30 year mortgage. You are paying tens of thousands of dollars extra to insure yourself that way. But that's just me......