Is now the time to buy this lot?

[akajoe87]

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

[akajoe87]

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]

Why is the first house you build not good enough?  That is, why do you want this lot?

[GuitarStv]

Wait, the HOA fees on an empty lot are 300$ a month?  What do those fees get you exactly?

[KingCoin]

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]

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.