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To clarify the situation. We own 5 acres and the neighboring property in question is 5 acres adjoining ours. We share the driveway, which runs right through the center of this elongated property, until it gets almost to the end of this property, then curves over to ours. We have a perpetual filed easement with the county, where we are the dominant estate, so there is no worry that the easement can be taken away.
This property has been for sale for a few years now, and the landowners are absent (there is no building on it either), so we have been able to almost think of it as our own in a sense. We didn't imagine that anyone would want to buy such a property, particularly for the price of $35,000 when there are similar properties with similar views but without someone's driveway going through the center.
We planned to buy it someday.
The new buyers (they close at the end of Sept) have expressed concern that we operate a vacation rental from our cabin, claiming it is a commercial venture, but in fact under Colorado law, it is not in this case because of the language of the HOA covenants. I saw my attorney yesterday to make sure, and let the new buyers know this yesterday.
So, I'm thinking perhaps they will back out now, but not sure. If they do back out, we want to be ready to buy it before someone else comes in and tries to. Therefore, the question about the financing. I believe we can get a HELOC for $60,000 or so at this point, and probably get the property for $30,000. We would pay it back pretty quickly, but the concern is I believe most, if not all HELOCs are variable interest correct?
We may be able to get a conventional loan, although, from my understanding, a conventional loan on vacant land usually carries a higher interest rate correct?
the lender will a)require a big downpayment (25-50%) on the land and b)not likely interested in the loan amount
take a HELOC on your primary. buy the land. pay it back as quickly as possible, since it's of little real value. then use the HELOC to redo your kitchen (you might even squeeze both in concurrently)
the lender will a)require a big downpayment (25-50%) on the land and b)not likely interested in the loan amount
take a HELOC on your primary. buy the land. pay it back as quickly as possible, since it's of little real value. then use the HELOC to redo your kitchen (you might even squeeze both in concurrently)
Thank you. This is exactly what we were thinking, including the kitchen! Will see what a few finance guys have to say tomorrow, but wanted to get some input first, so thank you, everyone!
Maybe you should rent out the place to a rowdy fraternity soon. Invite the purchasers to their party! Of course, the damages may not be worth it.
Or...maybe you should talk to the purchasers. If they're on the fence, maybe they would assign their contract over to you for a price. It might cost you more that way, but it might be the best way to secure the property.
Maybe you should rent out the place to a rowdy fraternity soon. Invite the purchasers to their party! Of course, the damages may not be worth it.
Or...maybe you should talk to the purchasers. If they're on the fence, maybe they would assign their contract over to you for a price. It might cost you more that way, but it might be the best way to secure the property.
Well, the purchasers and I have been talking. When I told them we operate a vacation rental, they sounded their concerns and gave a veiled threat that they’d ‘tell the HOA’ Of course, before we bought ours we checked with an attorney and I wanted to check to make sure the law hadn’t changed since we bought ours before I responded to them. It hasn’t, so I’ve noticed them with no response.
So, I think they might back out of the deal. They’ve only been under contract 12 days, so hopefully they have some contingencies remaining and if not, the earnest money can’t be too much on $30 something,
I did a HELOC about 2-years ago (similar credit scores, paid-off mortgage). I don't really need or plan to use the money immediately, but, had a potential need for liquid funds and didn't want to liquidate pre-tax funds -- A few thoughts:
1) One can maintain an open HELOC for 10-years (mine at prime minus 1-percent)
2) The HELOC cost is only some initial closing costs (and whatever one might use along the way).
3) With a second mortgage, one begins paying immediately and continues for the length of the loan
4) These days, the closing process for a HELOC is about the same as for a first mortgage (years ago, one could practically do a HELOC on a signature and a handshake).
5) A mortgage shows up as a fixed lien against the property; - A HELOC is more liquid
6) With a HELOC, one can take as much money as one needs (up to the limit) and pay it back flexibly
We have the income to pay it off rather quickly but have been putting much of it in investments at this point. So, we aren't concerned about being able to pay it off, but just need cash quickly. Therefore, looking at the best option to get the money quickly. We will also look at a conventional loan.
Maybe I'm not seeing all this clearly, but if time is of the essence and you need the cash, why not sell an investment, buy the easement and be done with it? No loan at all; no hassle.
Maybe I'm not seeing all this clearly, but if time is of the essence and you need the cash, why not sell an investment, buy the easement and be done with it? No loan at all; no hassle.
We have the easement as it is, so no need to buy it. The issue is we don’t want people having the neighboring land so they won’t be able to complain or give any trouble.
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