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Thread: Buying land now?

  1. #1
    Join Date
    Dec 2021
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    Southwest WI
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    Buying land now?

    A 7 acre parcel next to one of my properties came up for sale recently and im considering buying it. I am concerned about the market and I know I won't qualify for a traditional mortgage because I make no money on paper. For a little back story the parcel is connected to a building I own. The building is a old jail built in the late 1800's. I really like the history of the building and want to do something with it that others can enjoy. Im thinking a BNB. The jail needs a good bit of work but it is rented to a older couple that lives there full time currently. The idea with buying the parcel would add some walking trails and a place to have a fire or other outdoor activities since the lot the jail sits on is pretty small. The jail looks over the Mississippi River and does have a nice view, however the parcel goes up hill and at the top has a fantastic view for miles right on a bend on the Mississippi River. There is a road that separates the jail from the river so its not actually waterfront. The parcel is listed at 75k. I have approached the seller and they are willing to do a land contract with a 2 year term. I would give them 15k upfront and a monthly payment for 2 years. At the end of the 2 year term I would owe the balance. This makes me a little nervous with interest rates increasing i am not sure what the market will look like in 2 years. I also have many obligations of my time and won't get to actually doing this conversion a BNB for a few years. Its a long term play for me. Im just looking to see what a group of unbiased individuals think of this idea. I don't owe anything on the jail I bought it off market for cash a few years back. In my experience with the area I live in its pretty rare to have a seller agree to any form of land contract on vacant land and this it the only parcel that connects to the jail so it really could be a one time shot and doing this. What would you do if you were facing the same decisions? I have attached a few pictures of the views from the lot as well as the rough property lines. You can not see the jail in the aireal shot but it would be on the short side of the 90 degree angle. The hill is walkable but would need some work to make it safe for the average person to go up there comfortably.

    Screenshot_20220507-182002_Gallery.jpgScreenshot_20220507-182016_Gallery.jpgScreenshot_20220507-182049_Gallery.jpg
    Last edited by Mitch schiffer; 05-07-2022 at 7:39 PM.

  2. #2
    In our neck of the woods, $75K wouldn't even buy you a acre lot. House next door (on 3 acres) just sold for $555K, AS IS! Previous owner paid $185K for it in 2002. Your parcel has what is called a "million dollar view."

  3. #3
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    Is that Desoto by chance? Looks familiar to me. I worked on equipment there if so. I worked most of that line from Savanah Illinois to Prescott Wisconsin years ago. As for the purchase of the land. Everything we do is a roll of the dice in one way or another it seems.

  4. #4
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    That was a good guess from a few pictures! It is de Soto. I own the old grocery store there as well that I will eventually move my shop and house into. I really like the town.

  5. #5
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    Quote Originally Posted by Bruce Wrenn View Post
    In our neck of the woods, $75K wouldn't even buy you a acre lot. House next door (on 3 acres) just sold for $555K, AS IS! Previous owner paid $185K for it in 2002. Your parcel has what is called a "million dollar view."
    I understand it is a regional issue. There are several 500k and up houses on these bulffs most are on about 2-3 acres. The houses you see in the town are mostly around 150k

  6. #6
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    Schenectady, NY
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    Not an expert here but I think it would be wise to do whatever it takes to acquire this piece of property attached to something you already own before someone else does and does something you don't like with it. 7 acres for 75k to protect your long term plans seems like a good deal to me. Looks like a real nice area.
    Happy and Safe Turning, Don


    Woodturners make the world go ROUND!

  7. #7
    Join Date
    Sep 2008
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    N. Idaho
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    How would you feel if someone really unpleasant bought the property? That said, make sure you are fully protected ic you go the land contract route (get a good lawyer to rebut he agreement). That view is a good one!
    "You can observe a lot just by watching."
    --Yogi Berra

  8. #8
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    I was just looking on acretrader dot com, never had been there before, they were saying farmland in WI is pushing $5k per acre. Your guy is asking $10k per acre. That parcel could be developed, maybe, several houses put on it, and might be worth $10k per acre to the right buyer. There is also, as Christopher pointed out, the possibility of a bad neighbor moving in.

    If there is zoning possible, what about putting a couple or three rental properties where you can/may put in a road and then keeping the rest of the land for the BNB project?

    Just asking. It is more than I would want to take on this late in my life, but were I 20 years younger it would be hard to pass up. Also the question of how much of the $75k would you have paid off in two years? If you have the cash flow to own it free and clear in the 2 years of the contract I would be signing today.

  9. #9
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    Our house in Florida sits on only 0.15 acre and based on tax records the value of that 0.15 acres is around $80k of our total home value. $75k for 7 acres that have good location, view and usability seems like it could be a good price when compared to our deal.

  10. #10
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    Can you post a topo map of the area?

  11. #11
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    Southwest WI
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    Quote Originally Posted by Tom M King View Post
    Can you post a topo map of the area?
    I can figure out how to do this on Google earth but I did get a couple of 3d images that show it a little better.

    Screenshot_20220508-074519_Earth.jpgScreenshot_20220508-074454_Earth.jpg

  12. #12
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    Southwest WI
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    I can see the potential neighbor issue, but if someone were to build on it the structure would be a good bit away from mine. The top of the hill is the only build able area without a ton of dirt work. I guess my biggest issue with buying this lot is it would delay my availability of funds to work on my shop/house project. If the market falls if will be hard to get a loan for the balance, so I will have to save some of my extra cash over the 2 year period to pay it off.

  13. #13
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    I'm not seeing a great investment opportunity in that.

  14. #14
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    https://topobuilder.nationalmap.gov/

    I tried to do a screenshot but it's to large for posting.

  15. #15
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    SE PA - Central Bucks County
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    7 acres here would go for nearly a million and there would be no view of the river. For $75K, that would be a no-brainer for me, Mitch, if you can afford it. I like your idea for developing the property into something special, too. The one thing I'd look at very carefully, however, is the floodplain data, including 100 year and higher historic events for the entire property.
    --

    The most expensive tool is the one you buy "cheaply" and often...

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