Real estate question.

I'm to a point where I don't want to rent forever. The land lord offered to sell me the place I'm currently renting. I've lived here three years so I know the place. The house needs about $10k in repairs. Most of that is windows. The windows are good but single pane and not real great on energy. He wants $100k cash or C4D doesn't matter to him. House is about 1,200 sq ft 3br 1 bath. Built in 1925 added onto in 1946 and 1971. Sits on 16 acres 3 acres swamp the rest high ground. It has frontage on a major state high way. (MN 371) I have a love hate relationship with highway. Its nice that its the first one plowed in the winter. But according to MnDot it sees about 6,000 cars a day. I would like a place more secluded. Three car garage. Stick built, power and concrete. Two tracts that share a property line have sold with in last two years. 3/4 acre for $12k and 42 acres for $75k. So should I buy it or keep renting and look for something else?

Sod Buster

real estate goes up in value, daily!
if you could bye it on a 10yr land contract where you don't envolve the bank; your money ahead.

Going to look at another place. House on 10 acres outbuildings need a match. House is liveable. $75k. Tried to go look at a trailer house on 11 acres. $65k sold within the week. Another place I'm waiting for a call back on is a 2br 1ba house on 7 acres for $85k but its looks like about 5 acres of swamp.

(quoted from post at 15:40:57 08/29/18) real estate goes up in value, daily!
if you could bye it on a 10yr land contract where you don't envolve the bank; your money ahead.

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Were you around in 2007/8?

can only give you my CANADIAN take, but around here ( southern Ontario ) can't get a building lot , with out water or sewer , for that kind of money and you are getting a dwelling that needs some work ? no brainer for me here !

Prices don't really mean much to anyone out of your area as they vary widely from place to place so you'll have to compare.About the worst 2 acre lot anyone could draw up in my area sold a few
months ago for $99,000 only stayed on the market a week.

Funny how people have a blind spot about things like that.I've been looking at farms in more rural sections of VA and WV and I've noticed some keep getting reduced.

make sure electrical and plumbing including sewer are up to date otherwise you might be stuck with something you cannot sell without a lot out of pocket if you were to get a loan on it the mortgage co. might not even loan on it .

Seems like a decent deal.

https://www.realtor.com/local/Pine-River_MN

Realtor says $128/sqft is the ave. You are getting acreage, plus like you said, you know the home. He wants to give you a break and not pay commission on the sale, and has a ready buyer.

Now, do you like the place enough to own and live in it? If not, find something more secluded. If so, pay the man, and take the place.

I agree that single pane windows up there should be replaced. If you do that investment, and take care of the place like an owner should, I see you'll be in good shape financially for many years.

BTW, I invest in homes for a living.

I recently sold a home to a long time tenant. I gave him about $12,000 off the appraised price so I didn't have to deal with a RE agent, and go through the inspection hassles. The tenant was happy to get the place they liked for many years, and we are still on very good terms.

Nothing like coming 'home' to your own kingdom.

Since no more land is being made except in Hawaii, I don't see how you can go wrong buying land anywhere. May seem a little high at the time, but in a few years it will probably bring more. If I would have purchased land when I got out of school in 1960, and not motorcycles and old cars I would be fairly wealthy today. Stan

Grizz02 is on to something worth looking into, with the clean water act, your septic and distribution box require inspection at change of ownership. If you need a loan, bank may require inspection of elec, plumbing roof structure before they will commit. You could probably avoid the banks inspection with a contract deal, not so sure about septic inspection in your area. Remember also the more visible your place is, its a bit less attractive to the " get it here free crowd". jmho gobble

Don't know what to tell you about the land. Too many unknown variables: Do you have tractors? How many? Is there room for storage? Workshop? What about gardening? Do you work now or could you move elsewhere if you wanted?

If you ever wanted to get into gardening, you could sell right from your front yard. We don't have that option, being many, many miles from town.

By the way, we almost went past your place the other day. We met GreenMech (Ron) in Verndale and got a couple of awesome sewing machines from he and his wife. Then went to Pequot Lakes. Ended up going back through Verndale though. Have never been to Pine River -- thought it was farther south.

Buy it. Plant as many cedar trees as will possibly fit between the house and the road, and then you will be secluded.

(quoted from post at 14:42:36 08/29/18) Don't know what to tell you about the land. Too many unknown variables: Do you have tractors? How many? Is there room for storage? Workshop? What about gardening? Do you work now or could you move elsewhere if you wanted?

If you ever wanted to get into gardening, you could sell right from your front yard. We don't have that option, being many, many miles from town.

By the way, we almost went past your place the other day. We met GreenMech (Ron) in Verndale and got a couple of awesome sewing machines from he and his wife. Then went to Pequot Lakes. Ended up going back through Verndale though. Have never been to Pine River -- thought it was farther south.

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Scary how small this world is.... My folks live in Verndale. Is where I graduated from.

Buy it

The 2 comps are $1600 and $1785 per acre for bare ground. So at $1785 X 16 acres is $28560. $100,000 less $28560 for ground you would have $71440 plus repairs plus $10000 for repairs, so you would have $81440 in the house. To me that is a lot for a house that old. My choice would have been the 42 acres of bare ground. But I am in central IL and used to good black ground that will raise corn and beans, but it is bringing $10-11000.

Everything is negotiable. If you decide to buy it, offer a lower price. Worst that can happen is that he sticks to $100K. Monthly payment on an $80K mortgage is only around $400

If you are between Little Falls and Bemidji I?ve gone past a few times over the years.

Paul

No neighbor houses within 1,000 feet. That would be my only rule.

(quoted from post at 15:19:32 08/29/18) The 2 comps are $1600 and $1785 per acre for bare ground. So at $1785 X 16 acres is $28560. $100,000 less $28560 for ground you would have $71440 plus repairs plus $10000 for repairs, so you would have $81440 in the house. To me that is a lot for a house that old. My choice would have been the 42 acres of bare ground. But I am in central IL and used to good black ground that will raise corn and beans, but it is bringing $10-11000.

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the 3/4 acre brought $12k not $1,200 works out to $16,000/ acre. Quite a range I know. That place with trailer house sold with in the week. Given that trailers add little if any value to real estate that puts that land at $6,500 an acre $6,500 x 16 is $104,000. I'm having a hard time finding comps as all the real estate is either bare land or huge McMansions on piano key lots.

Check what the current septic system codes are, how long have they bee in place, and if septic system on that lot is up to code. It could easily cost over $10,000 to upgrade or replace a septic system. Have the water tested too. Nail down who is responsible to pay for any upgrades to pass inspections. How long has your landlord owned the place?

What is C4D ?

Finding anything good for 100k is
pretty hard. In your area land values
very a huge amount in short distances
depend8my on if it's in the tourist
area or not. Its hard to tell too,
because it doesn't have to be on a lake
t9 be valuable and the rest isn't worth
much. In Mn unless it's had a new sewer
in the last 15 years you can figure on
that too.

C4d= contract for deed

Would be a pretty straightforward sale in my area. The real estate agent he calls to list it with would buy it, and that would be that.

As Jon said, C4D stands for Contract for Deed. There's almost unlimited ways to do the contract, but "usually" the contract is written up to slightly favor the seller. Meaning, you may have a contract for 100k. Let's say the owner is willing to carry the contract for 10 years (not sure how many will want to go that long). Let's say you pay out 'X' amount of $ per month, quarterly, semi-annually, or annually. This could be a smaller amount that leaves a balloon payment at the end of contract, or it could simply divide the 100k equally throughout the contract.

Many sellers like to have a balloon payment because, if the buyer cannot come up with that much at maturation, then the land resorts back to seller and they also get to keep the money paid in over the years. Some people will even try to sneak into the fine print other stipulations that will/may make things even tougher on the buyer.

But still, C4D can be a great way to go. That's how we bought a place once. Seller was a fine gentleman.

If you like the place offer him 75,000. See what happens.

Around my part of Indiana 100k house that is liveable on 16 acres would be cheap. Liveable meaning lights and water works. You can?t throw a cat through the walls and windows and doors able to be secured. School systems here are a big draw

Sounds like what is called a Land Contract in my area.Buyer pays but has no real claim on the land other than resort to civil court if the seller doesn't hand over the deed when
they are supposed to,still can't make the seller hand over the deed just can sue for damages.I wouldn't be the buyer using one as things can get real screwy.

Landlord says he would do a c4d but he would also take cash. So If I went to bank and got a mortgage and the bank paid him cash thats fine too and eliminates the problems with the c4d

What is the tax assessment on it? Go from there if you think you want it. I brought 1.5 acer lot that backed up to my place for 26,000 last year which was the township tax assessed value of it. I didn't want someone putting a house on it next to me.

A C4D is not like that, it is similar to a bank loan except there are less regulations and restrictions. They can put most anything 8n them they want, you have to choose if you want to sign. But once signed its a binding contract. Around here interest is usually 10%, so They can be expensive.

(quoted from post at 14:56:26 08/29/18)

(quoted from post at 14:42:36 08/29/18) Don't know what to tell you about the land. Too many unknown variables: Do you have tractors? How many? Is there room for storage? Workshop? What about gardening? Do you work now or could you move elsewhere if you wanted?

If you ever wanted to get into gardening, you could sell right from your front yard. We don't have that option, being many, many miles from town.

By the way, we almost went past your place the other day. We met GreenMech (Ron) in Verndale and got a couple of awesome sewing machines from he and his wife. Then went to Pequot Lakes. Ended up going back through Verndale though. Have never been to Pine River -- thought it was farther south.

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Scary how small this world is.... My folks live in Verndale. Is where I graduated from.

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Funny but it is a small world. I'm about 40 minutes from Verndale.

Rick

Here's the deal with home ownership: Either you're in the market or you're not. If you're renting, you're not in the market, so chances are if you don't buy now, when you do buy that same piece of property will be more expensive. Now that's not a certainty, but real estate generally goes up in price.

On the other hand, if you own the house you're living in, you are in the market. If prices go up and you decide to move, your house will have gone up (or down) in price roughly the same amount as the new house you buy, so you're protected against rising prices and if prices fall it will still be a wash.

To get to the point, if you plan on living in the same place for more than a couple of years, you should definitely buy a home if it's at all possible. Less than a couple of years you're probably better off renting.

I have no idea if the offer your landlord has made is a good deal or not. You say there are a number of problems with the house, but that doesn't really matter as long as it's reflected in the price. If you can buy it at a price where you can turn around and get your money back, then that's a good deal.

You don't mention getting a mortgage, so I assume that's not an option, either because of the condition of the house or of your own credit. If you're thinking of signing a land contract with your landlord, pay attention to the interest rate. He's going to want to charge whatever the maximum is in your state. I believe it's around 11 percent, which is three times what you would pay on a conventional mortgage! There's no way I'd do a land contract if I could get a mortgage.

(quoted from post at 19:05:09 08/29/18)

(quoted from post at 14:56:26 08/29/18)

(quoted from post at 14:42:36 08/29/18) Don't know what to tell you about the land. Too many unknown variables: Do you have tractors? How many? Is there room for storage? Workshop? What about gardening? Do you work now or could you move elsewhere if you wanted?

If you ever wanted to get into gardening, you could sell right from your front yard. We don't have that option, being many, many miles from town.

By the way, we almost went past your place the other day. We met GreenMech (Ron) in Verndale and got a couple of awesome sewing machines from he and his wife. Then went to Pequot Lakes. Ended up going back through Verndale though. Have never been to Pine River -- thought it was farther south.

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Scary how small this world is.... My folks live in Verndale. Is where I graduated from.

Click to expand...

Funny but it is a small world. I'm about 40 minutes from Verndale.

Rick

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hat direction?

Skip as many inspections as possible! Rethink the windows. There always a big hype on single pane @ R1 or double pane for R2.5. Air leakage should your big concern. I am not telling how much money you should offer but if you want seller to make 10,000 for improvements & someone else wants 5,000. off listed price. Who gets the place.
HTH
Led

I will tell you this rent money will never add up to anything.

Now should you buy a house period??? A lot of people should never own. They are not ready financially or do not have the skills or money to maintain a house/home. The ones that fall into this group are the ones that have zero money left after they pay rent and utilities. So the people telling them to buy if their payment is equal to or less than their rent are telling them wrong. Even if your mortgage includes an escrow account for your taxes and home insurance you still have repair costs if you own. You need to have a rainy day fund saved up for these expenses. If you do not then your going to start a death spiral when you start robbing Peter to pay Paul when you need repairs. I see this happen too often. So if things are tight when renting owning will make them even tighter.

If you are paying your rent and have few other obligations plus have some saving, then by all means buy a home. Even if you do not plan to be there forever your gaining equity by making your payments. Also homes tend to be some what inflation protected. Not totally but at least some.

So if your thinking about buying a house that is worth $100K I would want to at the very least put $10K as a down payment. If you can not afford to do this you not ready to buy. Never buy a house with zero down or a real low down payment. You do not have enough equity to have any cushion if things go wrong. Plus your servicing a larger debt. Your house payment should never be more than 25% of your monthly take home pay. Meaning one weeks work should make your house payment. Total debt including the house payment and all other debt should not be over 45% of your take home pay. Try to make a 15 year mortgage work over a 30 year one. The month payments are not much different and the total pay off is HUGELY different.

Also do not use a "Contract for deed" or "Land contract" there are many pit falls in those type of contracts for you and the landlord/seller. Just do a deed and PRIVATE mortgage. The seller has the same protections if you do not pay him as he would with either of the other contracts. A deed and mortgage sales are common and the law is well versed in handling them fairly for both parties. You also have much more clearly spelled out rights and protections with a deed and mortgage. Actually the landlord does too. It is easier to forclose on a house than enforce a none payment clause on a land contract.

As for the value of the house your living in. You need to look at some local sales and try to compare them to what your looking at. Also an appraisal is not that expensive to have done and the majority of them will list the comparable sales that make up the base of their appraisal. I just had one done on a house we are looking at for another rental. The cost was $350. Really not bad for all the information I got. Truthfully showed me the house was priced too high for the area. Seemed reasonably priced to me but not for where it was at. Good place to find a good local appraiser is to asked your local bank or credit Union. Also if your thinking about buying it and using that lender they MIGHT use that appraisal when you would apply for a mortgage. So really not an extra cost.

(quoted from post at 19:05:09 08/29/18)

(quoted from post at 14:56:26 08/29/18)

(quoted from post at 14:42:36 08/29/18) Don't know what to tell you about the land. Too many unknown variables: Do you have tractors? How many? Is there room for storage? Workshop? What about gardening? Do you work now or could you move elsewhere if you wanted?

If you ever wanted to get into gardening, you could sell right from your front yard. We don't have that option, being many, many miles from town.

By the way, we almost went past your place the other day. We met GreenMech (Ron) in Verndale and got a couple of awesome sewing machines from he and his wife. Then went to Pequot Lakes. Ended up going back through Verndale though. Have never been to Pine River -- thought it was farther south.

Click to expand...

Scary how small this world is.... My folks live in Verndale. Is where I graduated from.

Click to expand...

Funny but it is a small world. I'm about 40 minutes from Verndale.

Rick

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Well that's a deal breaker right there LOL!

Well looked at another place tonight. Very disapppointed. Was not as advertised. Long story short $75k and it makes this house look like a palace. Me and the wife decided we are going to look at ten houses before we decide on buying anything. So eight more. Technicaly this house counts as one.

Is the buyers name on the deed? If not I would never buy that way a lot more chance of loosing the property plus the buyer wouldn't be able to refinance to get out of a financial jam I wouldn't think if their name isn't on the deed.

Buyer's name isn't on the deed until paid in full. That's what the contract is for.

In our case, we were able to get a C4D with fairly easy terms. We made a down payment and 3 more equal annual payments. Then we paid off the balance on the 4th year - something like 50% of original sale price. That worked well for us as, at the time, the land in the area was selling very low.

(quoted from post at 21:16:05 08/29/18) Buyer's name isn't on the deed until paid in full. That's what the contract is for.

In our case, we were able to get a C4D with fairly easy terms. We made a down payment and 3 more equal annual payments. Then we paid off the balance on the 4th year - something like 50% of original sale price. That worked well for us as, at the time, the land in the area was selling very low.

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We have done the same a couple of times both ways....worked out for us. I like to keep the banks out of it whenever I can.

Yes the buyers name is on the contract, and it is easy to enforce that contract. The buyer is just as safe as with a bank loan depending on the contract signed of course. As I said, either the buyer or seller can pretty much put in anything they want, so you need to read it carefully.

Lol, just Tuesday I drove up 371 to
371B and back to make a delivery.

I don't know about in Iowa, but here c4d's are common and both sides are well protected. But as I said, you have to negotiate the contract and most anything goes, so just make sure it's good for you and you are good. We bought the house we just sold that way and it worked out good for us and the seller.

You could probably save yourself a fortune by changing out the windows yourself. It's something you could do one or two at a time when you feel up to it.

Why would anyone finance at 10% unless the price is heavily discounted or their credit is complete crap? Except for Dave Ramsey I don't know of any making 10% on their investments, and I sure as **** know of no one making 10% on a 100% secured investment.

Look for something else. If you are going to buy, buy what you want, not something that is almost what you want.

For that reason and more. And not all of them are 10%, mine was much less. One thing is it can keep it off financial reports and credit reports for buyers. Sellers do it to avoid paying taxes for a while. In my case it was older folks who wanted out of a rental unit, but didn't want to take the pay off till after a certain age for tax reasons. So mine had a clause that said I couldn't buy it out or sell the property for 3 years at least.

(quoted from post at 15:34:09 08/30/18) For that reason and more. And not all of them are 10%, mine was much less. One thing is it can keep it off financial reports and credit reports for buyers. Sellers do it to avoid paying taxes for a while. In my case it was older folks who wanted out of a rental unit, but didn't want to take the pay off till after a certain age for tax reasons. So mine had a clause that said I couldn't buy it out or sell the property for 3 years at least.

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There are also short term vs long term cap gains considerations. Waiting sufficient time pushes the cap gains down but some people still flip and pay the freight. I hate paying taxes, and RE isn't going anywhere so I wait for the lower rate before selling.