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

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.

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.

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.

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.

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.

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.

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.

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.

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.

RE: borrowing money to buy land
 

My land is in Richland County, Illinois. I got it just in time because good hunting woods are probably up to around 2000 an acre by now. I am paid once a month, so just send in one payment. However, I try to add extra to each payment to equal at least one months payment by the end of the year. I understand that will cut down the principle somewhat.

RE: borrowing money to buy land
 

I've bought 180 acres in north central KS. in the last 3 years, first 100 acres then the attached 80. My wife and I have excellent credit and were able to put down 15%. My brother farms the land for me at the above mentioned 1/3 mine, 2/3 his rate. The average price I paid for the two pieces is right at $540/acre. I just sold my share of soybeans and with this income, plus my milo and wheat, and government payments, my land is going to fall justa mere $420 short of paying for itself this year. I have just over $7000 of income and just over that for all expences including property tax, fertilizer, herbicide, monthly payment, etc. Seems like a great deal, huh! BUT, in farming there is no gaurantee of income, CRP payments come close to it for the life of the program that the CRP is signed up for, SO take that into concideration. The land may make money one year, or several years, BUT make sure that you don't get yourself in the situation that you are relying on the land to make an income. Just like buying a house, only bite off what you can chew and make sure you leave enough financial squiggle room incase hard times fall your way!
They ain't making any more land, IMO, it's a great investment! I can remember when my dad bought his last 1/4 section of land and paid $315/acre and he thought that price was rediculous! There is a 1/4 section that was recently for sale in that area that didn't have near the income potential as my land does, and it sold for $800/acre! It's not getting any cheaper!

RE: borrowing money to buy land
 

Howler, you're absolutely right, there is no guarantee of income for a farmer, but that's part of the thrill, isn't it?

ParrotHead, didn't mean to ruffle any feathers. You're doing very well for yourself obviously. Different stages in life and I obviously didn't think before I typed.

I'm looking at an 80 in southern mo. It's 1400/acre and is about 50-60% timber and hilled where the surrounding five miles is flat. I'm going to sit the stand in the adjoining property Thanksgiving morning with my buddy. I haven't seen the portion of property that is currently pasture but I'm not sure how viable it would be to cash rent maybe 20-25 acres. I'm having trouble justifying a hunting property (even as solid as this is) that doesn't have the potential of paying for a good portion of itself in cash rent. Other than putting it in CRP or turning it to cropland (if it's even feasible at that remote end of the 80), thinning out the hardwoods (one time deal)... I'm not seeing much other income potential other than maybe getting a few dozen bales off the pasture. I sure as heck don't want to run cattle on it.

RE: borrowing money to buy land
 

Hey man no hard feeling I not that kind of guy. It is different strokes for different folks. I keep telling people they need to buy their own land. I believe it will get to the point where if you dont have your own land you wont be able to hunt. It may be 20 years down the line, but look where things have gone in the past 15. 15 years ago no one leased land in IN. Now it is very common,

RE: borrowing money to buy land
 

Howler, my jaw is on the floor at those land prices. $315 an acre. There was a piece of land 90 acres that just sold down by me in SE Indiana. All hills and valleys, all woods no openings or building sites. $340,000. Another farm by where I live which was 190 acres and they already logged the snot out of it and 100 acres was prime farm ground, last year the guy got 240 bushel an acre in corn. It went for $590,000. A farmer bought it.

RE: borrowing money to buy land
 

Yep, that part of Kansas sounds like heaven in terms of land prices. In my part of Illinois, wooded hilly land went for $350 an acre 25 yeas ago, often with few takers. The price hadsince increasedfour or fivefold. good farmland is now up around 3000 to 3500 an acre. Its even worse in some of the really hot deer hunting areas. Over around Pikecounty and points north, I believe that tracts of mostly woods are way over $3000 an acre. My motto is buy your own land even if you have to sellall your "toys" to do so.

RE: borrowing money to buy land
 

Another good source of income is hay. I have six acres of alfalfa hay. It goes for 3.50 per square bale. Farmer charges me $1 per bale and that covers from cutting to the bale. I got 5 cuttings this year. Seed can be written off. I would highly recommend Round Up Ready alfalfa. It cost more but it is worth it.

RE: borrowing money to buy land
 

Interesting thread. Just so I understand, in some areas you can get government contracts (WHIP program maybe?) to pay you to grow crops and leave standing? Or you can get local farmers to lease the fields from you to grow their crops and you get a percentage of the sale of them?

I purchased a little over 40 acres in southern Colorado last year. I am so happy that I did. We actually havested 2 cows and a bull near my property this year. It's a 9,000 feet with timber and canyons so no chance for agriculture there but that's ok.

Good luck finding some land to call your own . . . Rob

RE: borrowing money to buy land
 

here in ohio if you can find land for around 1500 an acre your doing great. there is some land cheeper but its real hilly. wont be long tho and ill have some land

Owner Financing Via Land Installment Contracts
 

I know some sellers, including my company, Rural Retreats (www.RurRet.com),offer owner financing for vacant land. This is usually accomplished via a "Land Installment Contract" by which you agree to pay a certain amount down (I usually require 20%)and then monthly payments over a period of time (usually 10-20 years) together with all other costs of the property (taxes, insurance, etc.). This contract is then recorded in the county's official records to give the buyer proof of his interest in the land. Upon completion of the contract (i.e. full repayment of the purchase price), the seller gives the buyer a deed for the land. One thing to be wary of, however, is that many sellers who use Land InstallmentContracts do not allow for prepayment/early payoff of the principal without a penalty because they want to be sure they get their interest. I never charge a penaltyfor prepayment- make sure this is in writing in any contract you sign!

Thebenefits of Land Installment Contracts are (i) that it provides an alternative for those with creditthata bank would not find sufficient and (ii) the closing can occur quickly and costs are usuallyminimal (we usually only charge $100 for closing costs, which covers document preparation and recording fees). The negatives are (i) that the interest rates are usually higher thanbanks charge (we typically charge 12.5% - but this is offset by low closing costs and our allowance for early payoff without penalty - if you can get financing from a bank after awhile because your credit improves/you gain equity in the property/you come into some money then you can pay it off early and avoid most ofthe interest) because sellers are taking on extra risk (if you have really good credit you'll just go to a bank)and typically have high costs of capital themselves and (ii) you have to read the contracts closely and ensure that thecontract is recorded in the Official Recordsto be sure you're not getting ripped off (i.e. prepayment penalties, tricky interest calculations).

I hope this information is helpful to anyone who is thinking about buying vacant land and is considering going with owner financing!

If you are looking for rural land in Southern Ohio/WV, please take a look at what we have to offer at www.RurRet.com or give me an email at [email protected].