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We did what you're trying to do 2.5 years ago. We basically wanted to grab the land before anyone else (great asking price in a good area. The owner was the developer's estate.) A regional bank mortgaged the lot for us with 30% down. If the land is subject to an HOA make sure there are no time to built limits just in case you're not ready to build next year and have a plan to maintain it.
We're scheduled to break ground in two weeks. There are a few benefits to the way did things: A) because we were in no rush we had time to really figure out what we wanted, choose a home that would highlight some of the features of our lot, and find a good general contractor; B) we've since paid off the land loan, so we're only financing the construction of our new house. That allowed us to do some of the things that we wouldn't have been able to do had we started earlier or had to finance the land into the construction. We're able to finish the man cave and have a separate rec room for the kids, and still have a lot of equity and C) we've gotten to know many of our neighbors. So when we move I don't think we'll feel like the new folks in the 'hood.
My husband and I bought land in 2004 and it took us 7 years to start building (almost done). I am glad we waited so long. It is in a rural area but over the years of visiting we have gotten to know the neighbors on the road, have friends in town, and the area is now like home even though we haven't moved yet (we are currently 600 miles away) However, like everyone said....be warned that you will go over budget. Doing a custom home is so different from doing a cracker jack box.....it's been a long road but almost finished!
We bought a piece of land in the Hamptons many years ago and did very well. We took out a home equity loan to buy it, so there were no strings attached. Several years later, we refinanced and wrapped both mortgages into one. Of course, we sold it just before a big boom occurred out there. While we did well, we probably could have sold it for triple the price if we had waited two years later.
Find a knowledgeable agent who can steer you to the proper government authorities to find out about rules and regulations governing the land. I agree with another poster who said looks mean nothing. You have to find out everything you can. For example, we were surprised to learn that the town planned to install a walking trail not far away from the border of the property. So, although a selling point was its seclusion, anyone could go in there and walk or ride on horseback as long as they stayed on the trail. It turned out to not be much of a negative, but you want to clear up any surprises before you buy.
Went through this to see the possibility, it seemed a ridiculously difficult process. It's funny that you can get a mortgage for a house that could be 3-4 times as much as a piece of land but if you just want the land your SOL. We looked into plots that were $150k and less and basically were told you would have to possibly put 50% of the land in cash up front. It was just a lot of hoops and holes to jump through and over and around here they push land towards developers and try to keep it parceled together (i.e. 25 acres for up to 30 lots) and sell it for $800,000. Rare to find a lot by itself here, and when you do they require septic, well, oil/propane which are big no no's on our list. We are trying to hard to find city water/sewer and natural gas but it's not so easy in CT.
You ever wandered why it is so hard? Why it is easy to buy a house and not so with land? Because banks are not into land owning business. Or house owning, for same matter. But thing is, house is much easier to liquidate, than land. Fluidity of an asset is quite different. Hence, in case sheat goes sour, and chances are high to, bank does not want to get stuck with a piece of property that either can not be sold, or sold at loss. That's why they want it backed by high down CASH payment.
I have same dilemma, as one hand, we have over sized neighbor's lot that is basically completely neglected and is a jungle, except their right around the house area and drive way. We seriously consider buying an acre back from them. But what always holds me is this - in case, yes, you know what, goes sour, and life is full of it - wdf will I do with that land? And in our case, we can simply buy it cash. It's very low liquidity asset, so one needs to think ten times, before getting into one.
It's funny that you can get a mortgage for a house that could be 3-4 times as much as a piece of land but if you just want the land your SOL.
There's a reason for that. Unentitled land is close to worthless in the eyes of lending institutions. You can't build on it, there is no securitable asset and you're ~12-24 months out from being able to dig. A lender doesn't want that responsibility if you default.
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