Specialist · Lakewood, CO · Member since 2014 · 1k+ posts · 1k+ votes
Hi all,
I just had the thought to purchase some land out in the woods and build my own personal home on it in 2-3 years when I've saved up enough and had plans drawn. Does anyone know about land deals? I spoke to a banker and they said they have pretty bad land loans and they are only for 2-3 years. Specifically, I'm looking to find out: what are the loan types that exist for land, what kind of water considerations (and cost estimates) are there, and likewise for power (solar vs. running electric), and access (a road to the home). The land I am looking at is around 5-15 acres.
I'm in Lakewood, Colorado looking to buy in Jefferson County, but I think some of these issues apply to the broader land buying audience. Thoughts?
I had the same thought. I suggest saving the money and paying cash. It will be cheaper in the long run (no interest paid out), and if you save the money, you will earn some interest on your money in the mean time. It would be best to buy and build mortgage free. As an option, you might find some owner financing. I bought 10 acres down in the Westcliffe area (8400' alt). Its a great area. I wanted to build a 2b/2ba/2 car garage "cabin" and I would have started that actual building in 2009, but I ended up getting married that spring, and the cabin is still isn't built (major change in my bachelor house design)... You gotta watch out for that pitfall :)
Unfortunately, the land I'm looking at is a bit out of cash range (it's $180k). I wouldn't mind grabbing a loan for it if it was long-term conditions. I haven't had a chance to do much web searching, but it seems like 2-3 years is all a bank will finance without rolling it into a construction loan. I still need more information on water, sewage, power, and access before I'm ready to really move forward. I'm wondering if land is one of those that creative financing become much more important with...
Typically land deals are done with 2-5 year terms, and often owner carry financing. Land has little to no collateral value to a bank, so you can get as creative as you want, but without another form of collateral its going to be tough....