Author Topic: Golden Opportunity (BOL)?  (Read 4562 times)

Offline Arie

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Golden Opportunity (BOL)?
« on: September 29, 2011, 01:03:13 PM »
My SO and I have been looking for land for quite some time, but we live in NY (where everything is outrageously priced, especially land.)  Land in our desired area goes for about 15K an acre, totally wooded and usually with some sort of restriction on them.

By way of a "friend of a friend of a friend I forgot I knew" we've been presented with what seems like a really good offer.

The basics:

2 acres of land, about an hour north of where we live now.  We'd have several ways to get there, two of which involve commuting directly through the city (not a good idea in a SHTF scenario), otherwise our drive would be about an hour and a half.

The land is mainly wooded, but has been cleared enough for a concrete slab and has a hand built log cabin completed already.

This is totally off grid - no power, no septic, no water.  It's basically a very nice 30x30 room.

There is a stream that runs diagonally through the property, and has fish in it (though not sure exactly what type or how many).  There is cell phone reception from the porch, and area cleared and tilled for a garden, and a dirt road in to the property.

It is about 30 minutes "to town" for groceries, post office, supplies, and 60 minutes to the city. 

It's in our price range - we could pay for 1/2 of it in cash, and finance the other 1/2 to be paid off within 2 years (assuming my bank would finance property with no power/septic/water?)

If I had to, I could pay for it in cash and not use the bank at all, but then I'd have no emergency fund and no money to improve the BOL at all. 

So - what would YOU do?

(It's just me, SO and our 15 year old cat.  We have an SUV that is paid for, two motorcycles that are paid for, a car with a loan on it (paid off in 2 more years) and less than $300 in CC debt.)

Offline NotoriousAPP

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Re: Golden Opportunity (BOL)?
« Reply #1 on: September 29, 2011, 01:40:58 PM »
When you say you live in NY do you mean the city or do you live elsewhere in the state?  You don't need to be too specific but it would help to know what region of NY state you live in.

Offline Arie

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Re: Golden Opportunity (BOL)?
« Reply #2 on: September 29, 2011, 01:57:56 PM »
When you say you live in NY do you mean the city or do you live elsewhere in the state?  You don't need to be too specific but it would help to know what region of NY state you live in.

We live in the Albany'ish area.  We only live here because it's where our jobs are, but they're not anything to write home about - just something to pay the bills.

-A

endurance

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Re: Golden Opportunity (BOL)?
« Reply #3 on: September 29, 2011, 02:53:49 PM »
With 50% down, most banks will finance raw land, so that would be the way I'd go just so you can keep your cash reserves.  I'd do some looking into the county flood plain maps and such (anytime I hear about a stream running across the property, it makes me nervous), but it sounds like a great starting place that can gradually be improved upon.  Surface water gives you all kinds of options for growing fruit trees and other permaculture crops.


Offline NotoriousAPP

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Re: Golden Opportunity (BOL)?
« Reply #4 on: September 29, 2011, 03:45:00 PM »
I spent most of my life in NY, mostly Rochester area, but I'm familiar with a lot of the state.  I know what you mean about Albany, there's been a huge influx of money in that area from the semiconductor industry and it's been driving real estate prices up for the last 12-15 years.  I was offered a job in that area but refused to go since a $300k fixer-upper isn't my idea of prosperity.

The property you described sounds great.  I live in an area that's in extreme drought conditions and where it costs $14k to drill a well so surface water is huge in my opinion.  Even if you had no means to drink it you could use it for irrigation for crops, trees, etc.  +1 on checking for flood plane, I think you can do this on FEMA website.  Also try to find out if the creek is seasonal.

I would take the loan instead of using all my emergency cash.  There's a reason it's called emergency fund and not fun/investment/land fund.  There should be local banks that specialize in agricultural/farm land loans.  I would imagine you would get the best rates from them and have less problems getting the financing for raw land.

Not sure what price range you're looking for.  To put it in perspective where I am in Texas now vacant land is ~$6k-$15k/acre so NY looks pretty cheap to me.  I know if you head west of Albany you should have no problems finding BOL's for not too much money.  I always liked the Cortland/Corning area.  I know that's further than the property you described above but there were some great rural areas and you would be somewhat close to Corning which offers a 2nd location for modern amenities if you needed to do some shopping, etc.  Additionally the land is cheap in that area (East of I-81, West of Albany).  I know that you should have no problem growing apples in that area!  Here are some listings I found on United Country which sparked my interest.

Near Adirondacks
http://www.unitedcountry.com/search06/SearchViewProperty.asp?SID=97482923&Item=790997&Lcnt=&Page=1&Office=31125&No=31125-30650&AU=N&FT=P

Fairfield, NY
http://www.unitedcountry.com/search06/SearchViewProperty.asp?SID=97482923&Item=745795&Lcnt=&Page=1&Office=31125&No=31125-20860&AU=N&FT=P

Near Cornell
http://www.unitedcountry.com/search06/SearchViewProperty.asp?SID=97482923&Item=761638&Lcnt=&Page=1&Office=31053&No=31053-43946&AU=N&FT=P

Offline Arie

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Re: Golden Opportunity (BOL)?
« Reply #5 on: September 29, 2011, 05:15:02 PM »
I'm thinking that perhaps I'm looking for land with some sort of dwelling already there because A) I know my SO's habits.  He likes to start 4389024 projects at once then asks that I keep him on task.  Me keeping him on task becomes me nagging him to finish at least 1 project before starting another.  An already completed dwelling = a happy Mrs.  Point B) is that althought I am in love with the idea of an earth home, I'm not patient enough to build my own.  I suppose that's part of the city in me.  Hopefully I can squish it and work on enjoying life instead of rush rush rush...

I'd never heard of unitedcountry - thank you for bringing it to my attention.  Perhaps I haven't been looking in all the places I should be. 

I think I'll sit on the "Golden BOL" for a while and do more research on it, as well as find out with this friend of a friend of a friend is suddenly so desperate to get rid  of it...

Any more advice is welcome!

Offline Mastoo

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Re: Golden Opportunity (BOL)?
« Reply #6 on: September 29, 2011, 06:49:26 PM »
You might ask about public road access to the property, and if there has been a survey.

Offline Roundabouts

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Re: Golden Opportunity (BOL)?
« Reply #7 on: September 29, 2011, 09:22:19 PM »
I think it is important to learn about your neighbors.  When we moved from city to country didn't seem like an issue.  After all we had been living in an apartment what an eye opener we had.

 Mineral timber water rights should be checked into also as to avoid a problem down the road along with easements.  Also I agree that not spending your ER fund is sound advice.  How long did it take for you to build it?  How hard would it be to replace it?  How much tougher would a shtf situation be to face if you didn't have it?  Would you weather the storm easier if you had BOL vs ER fund? 

If you said you could pay the loan off in 2 years maybe the best course of action would be to wait 2-4 yrs and pay cash for something.   I think there will always be "good" deals out there.  Like Jack says don't be afraid to walk away from a deal.  Good Luck

Offline Arie

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Re: Golden Opportunity (BOL)?
« Reply #8 on: September 30, 2011, 04:10:58 AM »
...Also I agree that not spending your ER fund is sound advice.  How long did it take for you to build it?  How hard would it be to replace it?  How much tougher would a shtf situation be to face if you didn't have it?  Would you weather the storm easier if you had BOL vs ER fund? 

...don't be afraid to walk away from a deal.  Good Luck

It's taken me about 5 years to save up the emergency fund that I have.  That might seem like a really long time, but I'm a full time student (full time employee as well) and have made some mistakes along the way.  I like to think of my mistakes as "growing pains", otherwise I end up dwelling on my mistakes and making them regrets, and regrets don't help anything.

As far as difficulty replacing it - I would probably have to spend another 5 years building to get it to the point where it's at.  I'm comfortable contributing the amount each week that I am now.  Too much more and I'll start to get financially pinched in other places, which will make me miserable about putting money away.  As it stands now, I put the money aside and don't think much of it after that.  Another $10 even, and I would start to think of other places that I could be spending that money....

I'm not sure that a SHTF situation would be much different with, or with out cash money to be honest with you.  I haven't invested in gold/silver at this point (I'm not sure how, or what I'd do with it, how to store it, where to put it, etc.  I need to look into this.)  I'm pretty sure that in an economic SHTF scenario (which is what I'm planning for) in the beginning, those with money will have wha they need.  However, when the sheople realize eventually that the dollar is a worthless piece of paper, it will be every man (or woman, in my case) for themself.

Taking that into consideration, it would be better for me, I think, to have a BOL than to have an emergency fund.  Aside from shredding dollar bills to try and weave something to wipe my butt with, or burning it for a heat source, I'm not sure what else it would be good for when the economy finally implodes...

Offline LvsChant

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Re: Golden Opportunity (BOL)?
« Reply #9 on: September 30, 2011, 05:14:43 AM »
My husband and I have purchased and sold several pieces of land over the years and have always done well with the raw land purchases (not so much with the home purchases). We used owner financing a couple of times when we didn't have the cash to pay for it outright. I find that the interest you will pay on owner financing is slightly higher than you could get at a bank, but very simple to do if the owner is willing. We handled everything for payments, etc. through an escrow company.

I would also be very curious as to the reason for the desperate seller... is it something about the land, or just some personal situation unrelated to the property? While you are considering it , you could also check with the local govt officials about requirements for septic systems and how much it would cost to have it installed and the cost for drilling a well... those two things would really be needed (even more than electricity) for a comfortable BOL. Since you are off-grid, you would need to know how deep a well in that area would likely be (it would help you determine what type of pump you'd need) and whether or not you could have a hand-pump or a solar powered pump...

If you don't want to go the septic tank route, you might want to consider some of the composting toilet options and see if you think you'd want to consider that...

endurance

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Re: Golden Opportunity (BOL)?
« Reply #10 on: September 30, 2011, 06:33:35 AM »
I'm not sure that a SHTF situation would be much different with, or with out cash money to be honest with you.  I haven't invested in gold/silver at this point (I'm not sure how, or what I'd do with it, how to store it, where to put it, etc.  I need to look into this.)  I'm pretty sure that in an economic SHTF scenario (which is what I'm planning for) in the beginning, those with money will have wha they need.  However, when the sheople realize eventually that the dollar is a worthless piece of paper, it will be every man (or woman, in my case) for themself.
Not to take things too far off track in this thread, but just to offer a word of advice on this point, be leery of the idea that there be a time when money will be worthless.  For one, at this point, as much energy as the federal reserve is putting into creating inflation as a tool to prevent deflation, so far they're losing.  It was deflation, not inflation that was the enemy in the great depression and the same goes for the Japanese economy for the last 20 years. 

Having cash reserves always gives you options that you may not have without it.  It provides a buffer and resiliency.  While I'm a strong believer in precious metals as a portion of everyone's portfolio, I agree with Jack that it's just one tool in the quiver that should make up somewhere around 10% of your assets, not 50 or 80%.  There are plenty of examples of gold and silver following stocks and bonds down the tube, and while unlike stocks and bonds where the company behind those certificates can go bankrupt, if you need cash at some moment in the future and only have gold that you bought in at $1600 and now it's at $800, you still lose 50% of your purchasing power in the transaction. 

On the other hand, productive land has its own inherent value.  The sale price can drop in half, but if you're growing 6-10k pounds of food on your land, there will always be a value to that land beyond the market price.  If it shelters you and your family for little more than the cost of property taxes, then there's inherent value there.  While it may or may not be that this piece of land is the right one for you at this time in your life, acquiring land at some point is an important step for many of us at some point that creates a solid foundation to our prepping.

Offline Roundabouts

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Re: Golden Opportunity (BOL)?
« Reply #11 on: September 30, 2011, 07:36:36 AM »
Well put Endurance.

Offline bigbear

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Re: Golden Opportunity (BOL)?
« Reply #12 on: September 30, 2011, 12:45:01 PM »
It sounds like you're running a tight budget.  Kudos to you for that!  It also sounds like the budget is tight, ie not much flexibility even if you push future allocations to an emergency fund.  But I'm getting some mixed signals ($10 would be costly vs. being able to pay off about a $15k loan in 2 years).

1. My initial thought is to consider using any extra money to pay off your car loan and if you have a large emergency fund balance, then I may even consider dipping into that (assuming it doesn't completely cripple the emergency fund).  Then you've got more cash flow.  If you've got $15k in an emergency fund, then pay off your car loan.  If you have 2 years left on the loan, then the remaining principal has to be less than $10k.  That would still leave you with a $5k emergency fund.  Then lump continue setting aside that carpayment amount but change the 'title' to BOL down payment!

2. If $10 is a strain, then how would you handle the extra payment for the loan?

3. Consider temporarily stopping any 401k/retirement contribs to free up some cash flow to get debt paid off and/or build up the down payment. 

Offline Arie

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Re: Golden Opportunity (BOL)?
« Reply #13 on: September 30, 2011, 01:07:44 PM »
It sounds like you're running a tight budget.  Kudos to you for that!  It also sounds like the budget is tight, ie not much flexibility even if you push future allocations to an emergency fund.  But I'm getting some mixed signals ($10 would be costly vs. being able to pay off about a $15k loan in 2 years)... 

You're right and incorrect in the same - please let me explain :)

In my head (which is a confusing place to those of the non-female variety, from what I'm told) an additional $10 *would* seem to be more costly, and here is why.  When I put money into an emergency fund, I like to do it in increments that I don't seem to notice.  In my personal case, it's $40 per week.  The reason that an additional $10 seems like *too much* to me is because that's $50.  $50 is 1/2 of $100, and $100 could easily be spent on other things.  (See how it makes sense in my head but most likely not in anyone elses? lol)

As far as the loan goes - if I were to plop down 1/2 of it, I'd still have a good chunk of money in my emergency fund, and I'd be taking out a loan of $7,500.  They're asking $15K for the property.  If I were to take it for two years, that's $3750 a year, $312.50 a month or $78.125 a week - not including whatever interest rate and insurance I'll need.  So, it'd be what I put away each week and what SO puts away each week, into our emergency fund.

I keep tossing the ideal of the potential BOL around, weighing the pros and cons.

So far, the biggest concerns are:

-I like running water.  There is no well on this property - and I have no idea what that costs, or what permits/fees are required to the state/county.

-SO is concerned with no bathroom on site.  He isn't too keen on the idea of pooh'ing in a bucket, and is concerned that if we buy said BOL, that we'll have to tap further into the emergency fund to pay for things like the bathroom, water and eventually solar.

So, there it is.  The explination behind my yes-no answer.  :D