Land Purchase Possible or Forget About It?

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trumpet83
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Land Purchase Possible or Forget About It?

Post by trumpet83 » Wed Aug 01, 2018 1:35 pm

My wife and I live on a house we built on land given to us by my parents. My parents live behind us on about 4 acres, about 3 of that is wooded. Behind their lot are three 2 acre lots that are wooded and considered "wetland" that backs up to what is now park-land. The 3 owners behind my parents are distant relatives and I have had bowhunting privileges since I was a kid.
The two owners of the furthest back plots live elsewhere and haven't had anything to do with this property in my entire lifetime (34 years). The one directly behind my dad attempted to have it cleared to be built upon, but the county either wouldn't allow it due to wetland status or they just realized it would cost a fortune to run water and sewer all the way back to it. They have gotten antsy and are really trying to sell the land.
I initially asked how much they were asking and they said $20k. I didn't say anymore, because I thought "who in the world would pay 20k for 2 acres of hunting land when the law says you can't hunt within 150 feet of an occupied dwelling, meaning they would need my parents to say it was ok for this person to even hunt on a portion of that 2 acres". Plus, there is no access to this property currently without needing my parents to allow them to use their personal driveway. The buyer would have to clear the trees on the paper road to have their own access.
They have actually had one guy potentially considering this land and it's killing me to think that this land might get taken by someone, even if it doesn't seem to make sense or have any resale value other than to me. My wife and I hope to live in our current house possibly our whole lives and it's worrying me about someone else owning this land. Previously, I just couldn't believe they could sell the land at all under these conditions...I figured they'd ask for a lot less money if they tried.
Long story short, I could potentially buy this land but if it makes the two owners behind this person think they could get something for theirs then I know I couldn't afford to buy it all. We have about 23k cash, about 75k in retirement saving and I'm a teacher so my pension is supposed to be 80% of avg of 3 highest working years (34 and 31 years old). Basically, I'm hoping that any readers of this either say "You simply can't afford it. Forget it and live with what happens". or "Ya know, I had something similar and regretted not paying the money", etc.
Thank you for any advice or thoughts you might share. This is kind of where money and sentiment cross over and I just kind of wish I was maybe another 20 years into being a Boglehead so I didn't have to just let the chips fall...

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lthenderson
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Re: Land Purchase Possible or Forget About It?

Post by lthenderson » Wed Aug 01, 2018 1:50 pm

Perhaps because I grew up on a farm, I've always wanted to buy up the land around me as it comes available. When I was younger, that meant getting a loan from my parents and paying it back. As I got older and had more assets, I was able to get loans to purchase the land. I typically got five year loans and put 50% down.

I don't think you are crazy for thinking about buying the land. From the way you describe it, I would be trying to purchase all three lots too.

researcher
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Re: Land Purchase Possible or Forget About It?

Post by researcher » Wed Aug 01, 2018 2:08 pm

trumpet83 wrote:
Wed Aug 01, 2018 1:35 pm
My wife and I live on a house we built on land given to us by my parents. My parents live behind us on about 4 acres.
Behind their lot are three 2 acre lots that are wooded and considered "wetland".
- The two owners of the furthest back plots live elsewhere and haven't had anything to do with this property.
- The one directly behind my dad attempted to have it cleared to be built upon... They have gotten antsy and are really trying to sell the land.
My wife and I hope to live in our current house possibly our whole lives and it's worrying me about someone else owning this land.
So this series of properties is 5 parcels deep?
1-you, 2-your parents, 3-person who wants to sell, 4&5-people who never use it

I'm not seeing a compelling reason to spend a significant portion of your life savings on this swampland property...
- There is a 4 acre buffer (your parents property) between your house and the parcel you want to buy.
- You would only use this "wetland" to bow hunt on 1-2 weeks/yr.

How would someone else owning this property impact you?
It sounds unlikely they could build on it, and even so, there is a 4 acre wooded buffer between it and your house.

trumpet83
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Re: Land Purchase Possible or Forget About It?

Post by trumpet83 » Wed Aug 01, 2018 2:36 pm

Thank you very much for the replies...@lthenderson, I'm glad you are kind of validating my thought process. @researcher, yes I guess you are correct. This would be a significant portion of my little bit of assets at this point. If they were asking a more "swamp-land-ish" price I would just buy it and be done, but I just can't see that the land would be worth to anyone else what it is to me. No, they almost surely couldn't develop it but being able to walk out your back door and go deer hunting on the land you walked as a kid is a special thing to someone that cares about that. I've hunted a lot of places, but this is the best spot I've ever had because it backs up to park property and a river. That being said, if the other two see what I paid then the cost for basically 6 more acres is crazy. I really don't want to pay "buildable lot" type money for hunting land that is in a location that wouldn't be easily resold if I ever needed to cash out.

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corn18
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Re: Land Purchase Possible or Forget About It?

Post by corn18 » Wed Aug 01, 2018 2:40 pm

Offer them $5k. All they can do is say no.

il0kin
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Re: Land Purchase Possible or Forget About It?

Post by il0kin » Wed Aug 01, 2018 2:47 pm

Have you had success bowhunting it? We are talking like a grand total of 15 acres with all the hunting access you have, right? I'm a fellow hunter so I can definitely see the non-financial side of this and understand wanting to have a little place of your own to hunt and get away. Some things are not measured so easily in money.

I would say to have an honest conversation with your distant relatives and tell them you can't pay 20k, because that is an absurd amount for 2 acres of isolated wetlands, but that you have a connection with the land and want to keep it in the family. Offer 4k per acre, which is still high, but will allow you to have it and keep it.

Even top quality tillable agricultural land around here isn't anywhere close to 10k, they are asking far too much. $1-2k/acre is probably the actual market price for an isolated, small, inaccessible tract of wetland.

trumpet83
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Re: Land Purchase Possible or Forget About It?

Post by trumpet83 » Thu Aug 02, 2018 6:18 am

@ il0kin, corn18 Thank you very much for your input. @il0kin, yes, I've had success bowhunting it. I see lots of deer and some big ones mixed in. To get around the river the deer to the other side of the parkland they basically have to walk through our area to get there. So, it's a pinch-point that just funnels everything. There are probably 10 give or take hunt-able acres and to buy this would give complete control over 6 of them. I would just hope the two cousins behind them just continue not bothering with it so I don't have to make any more moves.
Your advice about just having an honest conversation with them seems spot-on. I actually thought I would write them a letter, explain why it's important to me and offer them $8k which, like you say, should be probably at least double the true value of this land on the open market. The only reason it's possibly worth that is that I'm the only one capable of walking out my back door to get to it. I added a comment in the letter about how in terms of resale I would always have to make sure I had permission from whomever is living in my parents house because the "150 feet from occupied dwelling" carries onto there a bit. I just kind of wanted to put that out there in a subtle way that the sale of this land as "hunting land" requires the owners of my parent's house to be complicit to some degree. My last line was: "Of course, I won’t be holding it against you at all if you decide to go another direction and please don’t hold it against me for making an offer that’s more “modest” than it would be if I hit the lottery!"
So, hopefully this allows me to make an official offer without putting any future relationship in jeopardy. Thank you all for reading and sharing your ideas.

WVbaron
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Re: Land Purchase Possible or Forget About It?

Post by WVbaron » Thu Aug 02, 2018 6:32 am

My parents and I have purchased some land in West Virginia about 5 years ago and built a cabin on the property. Over the past few years, several additional tracks of land that adjoin us have become available to buy and we have been fortunate enough to purchase them. Part of the decision was emotional as we did not want someone to build another cabin close to us, liked the idea of having more space for hunting/hiking, etc. So I definitely sympathise with your idea of making the purchase. It could be possible that down the road you could buy all 3 tracks, if the opportunities arose.

In terms of your retirement/cash savings, I would not recommend taking $20K of your savings to purchase the land. However, it would be worth considering if you could get some kind of raw land loan to finance it. There are some good farm credit bureaus or credit unions that specialize in this kind of loan. The drawback is that the interest rate is a bit higher but you might be able to put something like 5K down and have a $150-$200 a month (or less) monthly payment for 10/15 yrs. If that fit into your monthly budget, it could be a good idea.

Overall, if it were me, I like the idea of trying to acquire the property with a longer term goal of having all 3 tracks of land. Especially if you plan on staying there long term, there are lots of personal/emotional reasons to strongly consider it. I would just think based on your retirement savings/cash on hand, it isn't the best option unless a viable financing option could work.

This is an interesting discussion and wish you all the best in making the right decision for you and your family. Good luck!

Leemiller
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Re: Land Purchase Possible or Forget About It?

Post by Leemiller » Thu Aug 02, 2018 6:42 am

I wouldn’t offer 8k. Take a look at assessed value for tax purposes and offer a bit more than that. Also, do you actually own the land your house is on, as in you are on a valid and executed deed? Do you have siblings? It isn’t clear that you will be the only person to inherit your parent’s house and land? How does your wife feel about this? I’m probably not getting why it’s hard to find deer to hunt in this manner since we get them in my suburban yard all the time.

I would not be banking on a state funded teacher pension not dropping in the next 30 years. Maybe there is also a car or truck you can downsize to fund this but this is a huge percentage of your lifetime assets. Also, if you’re going to have kids, I’d say it’s a worse idea.

trumpet83
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Re: Land Purchase Possible or Forget About It?

Post by trumpet83 » Thu Aug 02, 2018 7:31 am

Thank you all...
Yes, the land my wife and I am on was deeded to us by my parents about 5 years ago before we were married. I have one brother, but he didn't want to stay here to live although the expectation is that my parent's house would be shared between us should something happen. Where my house is it would definitely matter to me who is behind us, so I would ultimately have a lot more interest in who winds up there (hopefully, my brother would move in).
My wife is basically appeasing me. She doesn't hunt and is just sympathetic to me trying to keep my small place of the world the way it was when I was a kid. She had 40k of student loans that I started mowing lawns on the side to pay off a few years back and just finished last fall, so she is probably giving me a "pass" on wanting to do this. She was a military kid and moved 5 or 6 times in the 5th grade alone...me, I built a house so close to where I grew up I could knock my old bedroom window out with a baseball. She definitely doesn't have this sense of preserving anything, but she understands where I'm coming from.
Yes, the pension could always drop and I am acknowledging that even the 8k would be a significant chunk of what we currently have. This is all why I was torn about this because I knew I was drifting out of my league a bit in what terms of clout I have if offers start going back and forth. I don't really have vehicles I could sensibly purge. My truck is paid off. Her jeep has 13k left and is 0%. No other debt other than mortgage. Total assets outside of pension (We've got a good bit of home equity since we built the home and land was a gift, but I don't really count that) isn't anything amazing, but before this fall all my side money was paying off student loans. This summer, all that grass mowing money has largely been enough to live on so that 403 and 457 accounts could be almost maxed out. So, I hope to make a lot of progress now that we aren't sending it all to Nelnet.

trumpet83
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Re: Land Purchase Possible or Forget About It?

Post by trumpet83 » Thu Aug 02, 2018 7:42 am

Oh, and no, we don't have kids and aren't planning to.

The other option I've considered is to just keep Bogle-heading along....lose the battle, but win the war by continuing to just save and invest and then swoop back in and buy the whole thing once we are further down this path. So, even if I didn't get it now I could eventually be in a place where I could get it back.

not4me
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Re: Land Purchase Possible or Forget About It?

Post by not4me » Thu Aug 02, 2018 11:43 am

It sounds to me that you are “guessing” on a couple of pieces that might be valuable to know. You should be able to find the tax appraisal info…many states have that online & as public info. That is NOT an appraisal, but gives a good starting point for determining how much it might be worth. I wasn’t clear as to whether you knew the potential buyer to know how real the interest is. The seller may be optimistic & thinking they are closer to the $20k than they are. The buyer may be planning on offering less than you! I don’t know how you derived the $8k number. I guess the seller knows why they stopped clearing before. Even if you found out exactly why, a potential buyer might not know.

Have you considered whether your father and/or brother might be interested in also owning some? Might the relative be more receptive to your father? Since your brother moved away, his involvement may be unlikely unless there is a realistic chance he would move back later. If he doesn’t that brings up another consideration for you. I usually do NOT think it wise to have family members jointly own property & unsure if this would be an exception. Any idea what the disposition for the other 2 parcels would be if something happened to current owner?

I understand your desire for the property, but don’t think you should pay $20k. If you were to pay $8k, if I were you I might mow some more grass to offset that. If that sounds unappealing, maybe you don’t want it as much as you think. Good luck!

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Pajamas
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Re: Land Purchase Possible or Forget About It?

Post by Pajamas » Thu Aug 02, 2018 11:54 am

Seems like they just spouted off the $20k figure from the top of their head. You might offer them 10% over appraised value since they are cousins and to discourage them from looking for other buyers but it doesn't seem like anyone would have much use for the property or would be willing to pay more than it's actually worth. Maybe 2 acres is considered hunting property where you are but in most places it would not be unless it were adjacent to public lands open for hunting and even then it would be considered a site for a cabin.

trumpet83
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Re: Land Purchase Possible or Forget About It?

Post by trumpet83 » Fri Aug 03, 2018 6:02 am

@not4me, I haven't been able to find any property tax information because there isn't a street address. I guess I would have to go to a library and look at land ownership maps. I can't find that online so far. The one potential buyer is a guy, about 70, who needed to use my dad's driveway to ask him to show where the land begins. However, it was too muddy for them to get back there so he asked if he could park in my dad's driveway when he came back to walk through and look it over. I simply can't believe any reasonable person would pay that kind of money for land that is basically only conveniently used by me or my parents.
@pajamas, yes, I agree that they must have just come up with that number out of thin air. Like @il0kin mentioned in an earlier post, the going rate for "hunting land" is probably in the 1-2k range per acre. He suggested 4 per acre to just try to get it and be done. But yes, like you say 2 acres is a cabin site, not hunting land. However, in my case because it is the adjacent two acres to where I already am it seems to make sense. For someone else to buy 2 random acres and pay top dollar for land that can only be accessed from one direction is just insane.
As for the disposition of the other owners, all I can say is I wish this property doesn't sold because it may wake up those sleeping dogs. That's a major roadblock for me, because I'm concerned that buying the front property might just serve to kind of wake up the other guys who previously considered this land worthless. Really kind of feels like I need to call their bluff as long as I possibly can. 8K is one thing, but if it winds up taking 3 times that because it makes the other parcels go like dominoes it would surely be irresponsible of me to go to that extent.
Thank you all for giving such great input. I really appreciate you taking the time.

Bacchus01
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Re: Land Purchase Possible or Forget About It?

Post by Bacchus01 » Fri Aug 03, 2018 6:15 am

Is there an easement to get access to the land? If not, it isn’t worth a dime.

trumpet83
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Re: Land Purchase Possible or Forget About It?

Post by trumpet83 » Fri Aug 03, 2018 6:31 am

Yes, but it is partially wooded and would need to be cleared for the buyer to access it without coming onto my parent's property. They haven't been able to do anything with this land because it is considered to be in a wetlands area. Clearing requires permits, red tape, and money. The county may not even let them get a permit to clear the trees on the easement.
This is where my dad hasn't bothered to get involved because he doesn't think they could clear it and says the stumps would need to be ground down to make an access way. Major headache if it's even allowable by the county. There's definitely a reason that this land has just sat for almost 40 years. Lot of deer back there, but who could easily use it?

Grt2bOutdoors
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Re: Land Purchase Possible or Forget About It?

Post by Grt2bOutdoors » Fri Aug 03, 2018 6:47 am

I’ve hunted so I get where you are coming from, the attachment is only something one can appreciate after having “walked” the land, spent many an hour waiting and waiting. I’d offer 8k, and if they came back to you saying it was too low, tell em the best you can do is 10k (if you can borrow $2k from your parents).
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Silk McCue
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Re: Land Purchase Possible or Forget About It?

Post by Silk McCue » Fri Aug 03, 2018 7:01 am

Some have suggested you look at the assessed value for property taxes. In western NC much of the undeveloped land is assessed at $10k per acre (with a very low tax rate). We recently had the opportunity to buy an acre of land that adjoins our 12 acres and 2nd home. The acre lot is beautifully wooded and has a good view. Access to the lot is very difficult as it requires traversing up to the top of an unmaintained mountain road with no other homes built on vacant treed lots. Our access is to a paved road via a 2 acre parcel purchased in the 90's after the main parcel and home were purchased.

We were contacted by a Realtor a few months back as the owner had decided to sell. The land is assessed at 10k, the owner asked $6.5k. I never for a moment expressed the fact that I would like to own the land, and down played it's benefit to me (I would not tell the seller in writing why the property means something to you or why you would like to have it). After a couple of months I reached back out to the realtor and offered $2.5k for the acre and reinforced why the land was likely to remain unsold for a very long time at their current asking price. The seller accepted my offer and we closed within a month. It's ok to pay slightly above market to purchase such a piece of land but I would advise against significantly overpaying as it messes up the possible purchase of the additional lots. If you do buy it, you should evaluate whether or not you should get legal access to it from your parents property in case their place is sold and you find yourself with a change in the accessibility for some unforeseen circumstances.

Cheers

Shallowpockets
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Re: Land Purchase Possible or Forget About It?

Post by Shallowpockets » Fri Aug 03, 2018 8:04 am

Try and find a way to see when and if an offer is made on the land, then you can counter. Otherwise go with the same thinking of your father. That this land will not be able to be developed, not even a road or driveway to it. Access is paramount and it seem that it is not readily, easily, practically available. Sat unused for 40 years. Think about that.

trumpet83
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Re: Land Purchase Possible or Forget About It?

Post by trumpet83 » Sat Aug 04, 2018 8:18 am

@Grt2bOutdoors, SilkMcCue, and Shallowpockets ....thank you all for your advice. I haven't sent the letter I wrote with the offer yet, so maybe I don't wind up doing it in that form where I maybe look like I want it too much. One positive is that if the interest really heats up I imagine the buyer will want it surveyed and will be parking in my parents driveway to walk back and look the land over. So, if it's really going to happen we should have a good idea. As much as I'd like to just own it outright I definitely see the problem in throwing the market value off for the whole thing. After all, like shallowpockets reminded, for 40 years nobody thought there was anything to be done with this.

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TxAg
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Re: Land Purchase Possible or Forget About It?

Post by TxAg » Sat Aug 04, 2018 8:25 am

I loooove hunting, but don't buy the land unless you get it cheap.

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