by Mark Bingaman
We get it, we really do. If you’re a younger person (like, say, in your twenties) investing in land probably doesn’t seem crazy sexy. (Hey, we used to be twenty-something too, and it really wasn’t that long ago. Well, not really.)
But we’re not going to be condescending by making snide remarks about how most millennials are probably too busy playing Halo or using Tinder to spend any time thinking about their financial future.
If you’re reading this, then it’s most likely that you actually do care and are making plans to get ahead right now. Maybe you’re contemplating the advantages of playing the stock market versus buying land in the U.S. or elsewhere. Well, of course we’re a bit biased, but to us, the positives of searching for land for sale are rather strong. It’s like this famous quote you may have heard:
Mr. Twain was correct. And so was Mr. Rogers.
“Don’t wait to buy land, buy land and wait.” – Will Rogers
So, let’s clear up a couple mistaken ideas you may have about how to find land for sale and buying land.
I Don’t Have Enough Money Yet
Well, yeah, money is important, but you’re probably much closer to buying land as an investment than you might think. It’s possible for a first-time land buyer to nail down a loan for as little as 5% up front. That’s the kind of money that can easily come from an angel investor like a parent or grandparent. Or, if you have enough friends and relatives who think you’re responsible and diligent, a down payment to buy your first piece of land could potentially come from a crowd-funding campaign. Heck, if you’re really awesome, you may even be able to nail down a HUGE down payment via crowd-funding.
Hard Money Loans
A little bit of labor and perspiration can go a long way as you look into acquiring a hard money loan. These hard loan investors are not banks, but individuals or investment companies who offer loans to buy land with the land itself acting as collateral. The typical loan they’ll provide is normally around 65% to 75% of the value of the property. Of course, this asset-based loan financing means the interest rate on your loan will be much higher than that of a traditional bank and the duration of the loan much shorter.
The hard money loan typically is offered for a distressed property (one in foreclosure or otherwise) or property or land in need of repairs. These lenders will also provide money for materials to improve the property, with you providing the muscle and work. The trick here is to get out from under the loan as soon as possible by improving the property quickly via your labor and then refinancing with no money out-of-pocket.
Source: Hard Money Loan
You don’t need us to tell you, but we have to anyway. Keep that credit rating as sparkly as you can! If you’ve already dinged it a bit through youthful indiscretion, put effort into cleaning it up. The damage will go away provided you don’t dig the hole any deeper and show responsibility going forward. An exemplary credit rating will make a huge difference in allowing you to invest in land cheaply and with ease.
If you’re young(er)(ish) and looking for land to buy across the United States, you’ll find a number of properties here on LandHub.com that will be ideal for your initial foray into land ownership and growing your financial future. Welcome! We’re sure you’ll find your efforts rewarding and best of luck!