at 29, your doing pretty well. first thought is buy the land. if sold, you very well might have a house built there, with neighbors.
my second thought, pay off your mortgage on your home. 100k in a 401 is nice, but no mortgage is better. do the math, the early withdraw penalty, verses the interst your paying on the mortgage. it might suprise you. with say 10 years on the home note, figure what your 401 k would be back up to in 10 years, and then run the interest on the home note for 10 years. factor in how much you could additionaly save with no mortgage to pay every month.
most people i know, have cashed down the 401 k paper, and paid off the dirt and bricks. @ no interest on a note, plus $$$ freed up every month from a mortgage payment......

 

I would buy it. 8 acres is not enough if you look at being self sufficient.
-How much would need to be cleared to grow things, cutting firewood perpetually on the remainder, etc.

You've got the money, even though you'd be more comfortable taking out a loan from yourself (No issues with approval) , you expect to pay it off in short order (And if it's 2x that time it won't wreck you)

As you said, may never come up again...

And the biggest reason:
You can build in the middle and have a bigger "Buffer" around your house.

I'd do it in a heart beat.

I ended up buying 80 acres. I had originally intended to buy between 10 and 20, but I have NEVER heard anyone say "I wish I had bought less land"
I HAVE heard the reverse often though.

 

Hi 191185,

If I read your post correctly, you own your land and have a mortgage (which is prepaid up until Sept, congrats). If that is the case, personally I would talk to my lender and see if you have enough equity in your current land to take out a home equity loan for the $12-$14k the other land would cost you. There are tax breaks for home equity interest payments.

This would potentially save you from 401k penalties. Financial analysts will always say not to pull out of retirement to buy a house. You are in a position where your already owned 8 acres is a nice chunk for you and your little family, so I wouldn't be overly concerned. But I do understand the draw to additional land.

Let us know how it goes!

 

Thanks everyone for the replys so far.

I think I should have worded it better, let me clear up some of it.


I have a mortgage on my house, which is near St paul, Minnesota, in the suburbs. I owe $148,000 on that mortgage.

I own the 8 acres 90 miles from the cities free and clear.

the 5 acres in question is butted up next to my 8 acres of land.

If I do buy it, I would "borrow" from my 401k, which is taking a loan out against myself. I would not be taking the "early withdraw" and paying the extra penalty.

The way Fidelity explained the 401k to me, I can take up to a 5 year loan, up to half or 50k max against my 401k, then pay it back with after tax dollars. the interest is around 3-5% and that goes into my 401k as well.

My understanding is I can only "cash out" or "withdrawl" from my 401k if I am no longer employed with my current employer. Which I have to plans to do..

 

Also, so far on that land, I have a 26ft camper in decent shape, a couple honda generators for power. and some 6 gal water containers for water when I'm up there.

I'm currently cutting down trees to clear an area for a cabin which I hope to start building in a year or so.

The camper is currently near the road, which isn't my ideal location.

Water is 113 feet down, which puts my well, when I end up doing it, at around $5,000 to have dug. Does that sound close ?

Power is under ground at the road, which I may or may not use. I also want to have some solar at some point.

 

Also, so far on that land, I have a 26ft camper in decent shape, a couple honda generators for power. and some 6 gal water containers for water when I'm up there.

I'm currently cutting down trees to clear an area for a cabin which I hope to start building in a year or so.

The camper is currently near the road, which isn't my ideal location.

Water is 113 feet down, which puts my well, when I end up doing it, at around $5,000 to have dug. Does that sound close ?

Power is under ground at the road, which I may or may not use. I also want to have some solar at some point.

Thanks for all the advise guys . The land has been for sale for around 7 or 8 months I would say.

It is only advertised by the sign on the land near the road. I checked landbin, landwatch, and some others, and it is NOT listed on there. Makes me wonder if he cares if it sells or not?

My biggest reason for buying would be the "choosing your neibors" I would hate to not buy it and a family man with ATV's and a toy hauler are up there every weekend.

Then on the other side of the coin, I would hate to have all this land, and not any money to do anything with.

I'm leaning towards buying it. I'd say 80% sure I want to offer 10K . . .. the fact he's not advertising it for sale, makes me thing he's just fishing for a high price sale, or truley doesn't need the money.

Wouldn't he have it listed on craigslist, landwatch or something if he wanted a decent sale ?

I highlighted a couple important points above.

I have owned land since 1987 when I was 29. I have never had too much money but plenty of land to work with and a million plus national forest all around.

100 or more acres of that national forest I can act like it is almost my own since I never see anyone but me or some of my visitors hike on it.
Since 1987 I have come to the conclusion that Land is much more important than money.

As long as I have enough money to pay the no good property taxes which are $210 a year, I have plenty.

And you wrote that you: "so far on that land, I have a 26ft camper in decent shape, a couple honda generators for power. and some 6 gal water containers for water when I'm up there."

Which is much more than many people have. And if you have even 4 acres with that camper, generators and some other things, you are almost set. Although if you Need a cabin and more conveniences then you will likely need more money and must know how to be very frugal to make your money go far.

I have done much with little money, on my mtn retreat and in other places. Mainly on the mtn retreat where I built a bunker, 4 sheds and so far a half finished cabin. I pay as I go. I have not been in debt since 1990 when I paid off the $8,000 for my land. I paid it off in 3 years and today that land is supposed to be worth over $50,000 not including my buildings or 2 springs of good water.
It is "only" 3 and 1/2 acres but as I have told before I do have the million plus acre national forest for Much privacy and use. I will not build on the national forest as long as there is a government and I could go on and on but maybe I have enough for now.

I have also experienced some not very friendly neighbors ( most who live more than a mile away ) and they are only up there some weekends in the summer. Some have tried to tell me what to do and then wonder why I am like a hermit so much of the time.

I also plan to build a ten foot high log pole fence around the central acre of my land and No one will get past that or hopefully be too scared to even try to trespass anymore.

Hope it all works out for you 191185 and hope you make the right decision. I just told you what I have done and what I think of owning land. I have and I advise people to get as much land as they can afford. Do without fancy expensive stuff and maybe live more frugally than you ever have. It is worth it, to me anyway since 1987.

 

5 acres is nothing, especially out in the middle of nowhere. What I would do is maybe give them a lowball offer of $10k that you have no intention of negotiating away from, and if they are desperate enough to accept it then you win. If not, no big deal, forget about it.

If you had the money to throw away it wouldn't be a problem, but you have a lot of financial question marks it seems, especially with a young child.

 

They don't make much more land, instead making a lot more people (which will be buying land).
I would make them a realistic, but lowball offer.

 

Im not seeing how you are making money form this. Are you going to build and rent on it?

 

Thats not the OPs intention.

 

Whats the extra property tax going to run you?

What about closing cost? Do you have to get another survey, what about title, deed.

 

Buy, buy, buy!

God keeps making more people but he doesn't make any more land. Basic fact - and if you can get the property below market, do it. I am assuming you have done your due diligence and its a good value in the current market. Negotiate it as low as you can. Think of it as investment. What will it be worth 10 years from now? Real estate goes up and down but over the long haul nobody ever loses by buying it at a good price.

One of the advantages of being older and having a good credit rating? I have three different credit cards I could charge that much on right now, while I looked around for a better financing deal. Mortgage rates are incredibly low right now and you might want to refi thru a bank.

Worst case scenario? You have to sell it later. If you got it below market, it should move quickly.

 

Buy. My brother bought 20 acres. Had a nice quiet place. Dirtbag bought the land next to him. Ten acres but my brother did not "want it" even though the owner offered him a great deal. Mr. DB was fighting chickens, selling beer during matches. He would have around a hundred show up for the cock fights. Things started disappearing, his cabin was broken into several times. Someone got mad about losing money and shot up the area, including several into brothers cabin. Then he found squatters in the cabin. Junk started piling up next door including junked cars and appliances. You get the idea. This was within 30 miles of Dallas. Me. I was on the home place. Hundreds of acres surrounded by large ranches. Unfortunately it was only ten miles from the border. Control the area around your BOL as much as you can. Who knows, that money in the 401K could disappear before you can get it out. Bird in the hand is worth two in the bush. Buy it. Then find a copy of Gene Logsden's book "5 Acres and Independence". Still a lot of good info. BTW, you know it gets really really cold up there? And that white stuff? Snow all over the place. No Way!

 

What does your zoning say about frontage needed for dwelling and Do you currently have enough? What's on the other side of the 5?

I'd buy just like you want to with a loan on the 401k but haggle hard for it.

 

If I bought the property, that would push building a cabin, or digging the well for water back another year or two...

How long has it been on the market?

How does the price compare with others nearby?

My gut is to say don't buy it. You are remote enough and it would be better to be financially secure then dancing on the edge.

 

How long has it been on the market? About 8 months, but its not advertised online anywhere I could find.

How does the price compare with others nearby? oddley, I can't find much land over 1 acre for sale nearby.

My gut is to say don't buy it. You are remote enough and it would be better to be financially secure then dancing on the edge.

Do you own land currently ? if so how many acres do you have ? how many acres is considered enough to stop looking ? 20 ? 40 ? 100 ?

Are there many people on this forum that have 5 acres or less, and are doing just fine ? with a complete setup ? cabin, well, electric, everything ?

 

I say buy it. Someone else that you don't like might end up buying it.

 

Thanks for all the advise guys . The land has been for sale for around 7 or 8 months I would say.

It is only advertised by the sign on the land near the road. I checked landbin, landwatch, and some others, and it is NOT listed on there. Makes me wonder if he cares if it sells or not?

My biggest reason for buying would be the "choosing your neibors" I would hate to not buy it and a family man with ATV's and a toy hauler are up there every weekend.

Then on the other side of the coin, I would hate to have all this land, and not any money to do anything with.

I'm leaning towards buying it. I'd say 80% sure I want to offer 10K . . .. the fact he's not advertising it for sale, makes me thing he's just fishing for a high price sale, or truley doesn't need the money.

Wouldn't he have it listed on craigslist, landwatch or something if he wanted a decent sale ?

 

Then on the other side of the coin, I would hate to have all this land, and not any money to do anything with.

You said:

If I bought the property, that would push building a cabin, or digging the well for water back another year or two...

1-2 years vs not kicking yourself for the rest of your life for NOT buying it and having the "Neighbor from hell" move in!

You choose!

 

How much did you pay for what you have? Does this one have any interesting features on it that would be valuable? Does it complement what you have?

This doesn't seem that it would cause you a real hardship to buy, paying it off in a year or two sounds OK. If you had zero savings and no retirement I'd be concerned, but I doubt many your age are in such a good position.

Nice to know you have a trailer that you can use when you go up there because with a baby/toddler it makes it much easier.

 

What are the taxes like? That could be a yearly drain that you don't need.

 

taxes are $289 / year on the 8 acres .

I paid 3k / acre 3 years ago so $24k for all 8 acres. Seemed like the best deal/location at the time. Even today I don't see land in my area that I would prefer over what I have.

He is asking 18k for 5 acres, has a gate, 5x8 shed, and dirt driveway maybe 40ft .

I think 12k would be a good deal for me, 10k would be a steal .

I don't think I would pay a penny over 15k

I did a survey, title insurance, and everything else on my 8 acre through a trusted title company for around $450 ?

So if I pay another $400 or so to ensure the title ins, and survey is what they say it is, that's fine by me.

 

taxes are $289 / year on the 8 acres .

I paid 3k / acre 3 years ago so $24k for all 8 acres. Seemed like the best deal/location at the time. Even today I don't see land in my area that I would prefer over what I have.

So am I correct that you have paid off the $24,000 in the last three years?

I'd offer $10,000 and see what he says. You can always up your offer. He's most likely seen your trailer and that you haven't drilled a well. So it is likely that he knows you aren't rolling in money.

 

Grab a fixed rate mortgage with the ability to pay off the FULL amount at any time without penalty. Rates are so low right now and will only head up in the future so its a good time now to do it and you will have the financial wiggle room without pulling money out of your retirement savings and paying penalties/fees.

As long as you got a good deal on it of course..

 

Oh just buy it already. Always jump on the opportunity to chose your neighbor, and in this case, you are chosing yourself.

I would hate to have all this land, and not any money to do anything with.

1) 13 acres is not "All this land"
2) That little bity 14k won't suck you dry.

 

I borrowed about $10k out of my 401k 6 years ago to help me secure my primary residence at the bottom of the housing dip in 2009. (Managed to also qualify for the one time - first time home buyers $8k tax credit as well that same year). I just paid off the 401k loan in about 5 1/4 years. I see no issue with you taking 10% of your 401k out to finance this purchase. Go get er done - maybe I'll wave on my way past up to the BWCA next summer.... Good luck!

 

I remember one item a banker (head of the bank) told me many years ago. Buy adjoining land when available, when you want it, it might not be for sale. Done this a few times, never looked back. Right now, a $13,500 offer would get you close to that land. I've seen the $18,000 5 acre lots drop some. Area means something, but paper companies selling land off nearby lowers prices.

 

I honestly believe you can be totally self-sufficient on 5 acres. You already have 8, which should be more than enough land to keep you busy & broke. I would suggest you focus on paying off the debt you have. The tax issue is also a very good point. When you start getting into large land ownership, small tax increases for the average person can be a big deal to you.

 

Alright. I ran the numbers for the land. If I borrow 15k it's $64 week, I'm currently saving $100 week.

So I think I am going to offer 12k . And if it works out, I will just save less for a while till it's paid for.

 

Alright. I ran the numbers for the land. If I borrow 15k it's $64 week, I'm currently saving $100 week.

So I think I am going to offer 12k . And if it works out, I will just save less for a while till it's paid for.

Offer 10, then 12.

You can always go up, it's MUCH harder to offer less after they say yes!

 

The question is, do you need more land to accomplish your goals? Buying land because it touches yours is a never ending process.No matter how much land you have somebodies land will always touch yours. More land can serve to place your home and stuff further away from prying eyes.

 

Here in this town, maybe half of the homes are placed right up close to the road. Every car going by can see the house. Then the other half of the homes are back in the forest, so you can only see the driveway. For those homes, the residents can not see any other homes.

That is how it is with my house. I put it just about in the center of a 40-some acre parcel. Even with a few acres of clearing near the house, it is still dense forest in all directions. We can not see any other houses, and nobody else can see us from their properties.