Author Topic: Is now the time to buy this lot?  (Read 2128 times)

akajoe87

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Is now the time to buy this lot?
« on: July 11, 2013, 08:17:10 PM »
I bought a lot about 2 years ago in this development for $38,000 and built my house on it. Recently a lot was offered to me for $20,000 because the subdivision was reposed by the bank.It is in a small town and things are selling slow. I was wondering if now is a good time to buy it but I would have to take a loan out for $20,000 in tack it on my mortgage and eventually sell my house and then build a house on that lot. The HOA fees are a hefty $300 a month. Should I buy it or not? Thanks

lhamo

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Re: Is now the time to buy this lot?
« Reply #1 on: July 11, 2013, 09:55:19 PM »
If you still have a mortgage and don't have the 20k to pay for the second lot, I would say no, now is not the time to buy.  Especially if property is moving slowly in that town. 

Try offering $5k and see what they say.  That might be worth it.  Or maybe $10k.  But only if you can pay cash.  I would not take out a mortgage to buy raw land in your situation.


akajoe87

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Re: Is now the time to buy this lot?
« Reply #2 on: July 12, 2013, 05:45:42 AM »
Low balling on the price may be in my best interest. I really want the lot and feel that if I do not buy it now I may never get the chance to purchase it for that price again while interest rates on loans a very good. I build my own houses and if this works out I will be debt free if I can sell my current house and build on that lot.

arebelspy

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Re: Is now the time to buy this lot?
« Reply #3 on: July 12, 2013, 09:10:17 AM »
Why is the first house you build not good enough?  That is, why do you want this lot?
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
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GuitarStv

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Re: Is now the time to buy this lot?
« Reply #4 on: July 12, 2013, 01:51:17 PM »
Wait, the HOA fees on an empty lot are 300$ a month?  What do those fees get you exactly?

KingCoin

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Re: Is now the time to buy this lot?
« Reply #5 on: July 12, 2013, 02:56:34 PM »
To make a judgement, we'd have to know more about your plan.

What's of paramount importance is that you not use the $38k you paid for your lot as an anchoring point for the second lot. That is, $20k isn't necessarily cheap just because it's lower than what you paid. You need to do a thorough comparison to other lots not only in your town, but neighboring towns. Be sure to factor in the HOA fee, realizing that a $300/mo annuity is worth on the order of $70k. So you'd be much better off paying $60k for a lot with, say, a $300/yr HOA fee. In fact, with a $300/mo fee, it's entirely possible that someone should PAY YOU to take the land off their hands.

akajoe87

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Re: Is now the time to buy this lot?
« Reply #6 on: July 13, 2013, 03:04:44 AM »
The HOA fees really only get a paved road! Thanks everyone for your help. I am not going to buy it until I can get it for 10K or the market picks up around my area.