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Old 11-21-2006, 07:49 AM   #1
 
Join Date: Nov 2006
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Default borrowing money to buy land

How do you guys buy land for hunting? Who do you borrow the money from? What is the rate? How long can you get a loan for? Just trying to figure if I can do this with the money I have available. I am from Wisconsin and looking for northern hunting land.Thanks
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Old 11-21-2006, 08:26 AM   #2
Typical Buck
 
Join Date: Feb 2003
Location: Seymour IN
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Default RE: borrowing money to buy land

From what I know it is hard to get money just for land. I teach school and in the summers my buddy and I buy and sell house and really through the year. We started when we were 23 bought some on contract and it was tough at first real tough making the payments. But by the time I was 26 we were paying cash for houses. My buddy bought his house for cash and I bought mine with cash and I have never had a car payment. We just bought some more hunting land for cash. Now we have bought and sold over 50 houses in that time though. I will never buy anything I can not pay cash for, interest drives me nuts, I am to much of a tight bass. I am currently 36. If I were you I would try to find a place to by on contract first. Second try to find a place that might also have a source of income cash rent, CRP, etc. Or see if you can put it in a program. Just my two cents I am sure others will disagree.
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Old 11-21-2006, 09:48 AM   #3
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Default RE: borrowing money to buy land

If you have good to excellant credit(650 or better),and adequate income.... you will have no trouble finding a lender. Be selective in choosing a lender. If the land has a history of farm rentor CRP income,get your hands on that info,and take it with you when you go in to apply for your loan.
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Old 11-21-2006, 10:02 AM   #4
Spike
 
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Default RE: borrowing money to buy land

chief400, I'm looking into it too. I'm not in Parrot Head's boat having enough cash to buy $100k+ of land in cash (on a teacher's salary, no less) so I'll be having to find a loan like you.

The old lady works at a bank (here in the city) and the best they do is 30 year notes for "improved land". Pretty sure that is for lots to build houses, etc and _not_ for farm/timber land. I've got a hunting buddy who wants me to buy an 80 adjoining his land. The numbers he gave me was less than half of what the old lady came up with. The bank's 30yr # was like $900/month and his number was around $400. Assuming he's not flat out wrong, he's obviously working from very different loan paramaters. I'll find out for sure what it is this week, but I'm guessing the banks that do farm loans have longer terms and different rate structures. At least i'm hoping... b/c $900 a month isn't going to cut it.

And as far as Parrot Head saying it's hard to get money for land, that's just nonsense. If you've got the income to debt ratio any lender will be more than happy to go out of it's way to lend you money. They're not making money unless they're lending money. To his credit, he's right on about cash rent and crp program. Anything to defray cost of hunting land is a good thingl.

My 2 cents.
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Old 11-21-2006, 10:13 AM   #5
Typical Buck
 
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Default RE: borrowing money to buy land

On a teachers salary no less what does that mean? I think for working 180 days per year teachers in my district do pretty well. First year makes 37,000. After 20 years your maxed out at 64,528 with your masters or 30 hours. My health insurance is $1 per year. eye is $7 per year and dental is $14 that is the single plan. Also I make more doing the houses than I do teaching.

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Old 11-21-2006, 10:13 AM   #6
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Location: Southwest Ohio
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Default RE: borrowing money to buy land

I bought 19 acres of woods at 1300 an acre about three years ago. I think that i got it at about 5.5%, but it ballons up somewhat after 5 years.Wasn't a problem since my credit was pretty good and I have a good salary. However, if i recall correctly, you have to put10-20 percent down on apurchase of land.
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Old 11-21-2006, 10:17 AM   #7
Typical Buck
 
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Default RE: borrowing money to buy land

I said it was hard to do not impossible. Problem is these people who finace everything and have CC maxed out and they wonder why they can't get a loan. Plus they can't even save enough for a down payment.
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Old 11-21-2006, 10:22 AM   #8
Typical Buck
 
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Default RE: borrowing money to buy land

Not sure where you are but that is a good price. Tell you where you can save a nice lump of money. Make your payments every 2 weeks instead of once a month. That will save you a lot in the end.
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Old 11-21-2006, 12:48 PM   #9
Spike
 
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Location: Tallahassee Florida USA
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Default RE: borrowing money to buy land

I do a fair share of investing in Florida and maybe I can help a little.

True or False -It is hard to borrow money for land.
False. As a poster stated, it is very easy to borrow money for raw land. However, most banks and lenders want to be able to get "theirs" if you were to default so most, if not all, lenders require a 20% investment in raw land. The same holds true for second homes, businesses, etc. I have purchased a few houses to flip and they will hand out money like water if you have 20% down. That way, if you default, they can "liquidate" the property and easily get their money back out of it and maybe a little more.

Another point to remember is that most of us have some equity in our homes. This equity can be used to help with down payments and even buy other properties outright. This tactic is used alot to buy raw land. For instance, I bought my house for $92k in 2002 and it was worth $152k in 2005. I borrowed $50k against my house to purchase another house in an estate sale. The loan is interest only and works very similar to a credit card in that I can use it as needed. My brother used his equity line to purchase additional properties as well.

The old saying is that you have to have money to make money but the truth is that you just have to have good credit and you can do about anything.

I am looking to purchase asmall tract in the midwest (80-320 acres) and I will likely then try to lease it to farmers. The bank loves it and there are a number of programs to assist with the purchase. Further, it is considered investment income because the lease programs with the farmers allow me to make a little off of the land to offset the costs of purchase and I have ready made food plots on the place in the farmer's crops.

I make a payment on the land, the farmers raises and sells his crops of which I get a percentage, and then I have food plots supplied by the farmer. You cannot ask for much better. The only flaw in this logic is that many of the small farmers that do these deals are going by the wayside quickly and they are a dying breed.



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Old 11-21-2006, 01:05 PM   #10
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Default RE: borrowing money to buy land

Cash rent is pretty good around here. Most going for around 120-140 per acre. Some do 1/3 and 2/3. Set aside programs also give you a tax break on your property taxes. But if you take it out before the program is up you have to pay the back taxes.
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