Saturday, September 19, 2009


I have been living off grid for about 5 years now and through that experience I have learned more than I could have ever imagined. Some mistakes were expensive, some success were cheap.

I have been self employed for most of my life. I continued doing business living off-grid. My home is my office/shop.

I am not even going to attempt covering it all with this post, it will require many posts and several days to even scratch the surface.

First off you need to find land!

Don’t try the local Real Estate Office expecting to find dirt cheap land, or even land on a contract for deed (C4D). The real estate agency needs to make money so there fees are needing to get paid before you could enter a contract with the owner, like a C4D. The owner may need money to pay an existing loan on the property allowing a clear title for your contract.

Lets say you find a property listing for 100k a common percentage for real estate agency is 6% (depends on the state). It’s a shot in the dark but if the owner only owes say 20k then your still needing at minimum 26K plus payments. The owner may not be willing to enter a C4D with out cash in his pocket (he spent his 20k to pay of the loan). The other problem is the owner probably will not be willing to discuss his debt on the land to a potential buyer (if you can talk with him at all, remember there’s a real estate middle man). Sometimes the Agent my have this info and share it with you. But before you start calling everybody with land for sale you will need to invest some time in your own finances.

To quote Clint Eastwood: A man has got to know his limitations. Do some realistic figures; how much money do YOU have?, how much can you come up with in time for closing.
I deal with people every day on land I have for sale, The honest truth 99.9 percent of these people are full of shit! They say things like “I will be paying cash” or “oh I have that much, no problem” and then they want a bunch of pictures, sometimes it’s a big tour, or endless phone calls they repeat the same question (indicating their not paying attention, and there interests are only to get attention) then it turns out there just another broke dick with no money and no respect for my time. Don’t be one of these people! We have other names for these people: Shit birds, Fender lizards, and Daydream believers, Scammers, Whistle dickers, among others. Be honest with yourself, and honest with the sellers regarding how much you can pay.

Don’t misunderstand, I am not recommending the real estate agent route. Sometimes opportunity will make a possibility for a deal. I am also not recommending debt.

With any real estate route when calling, introduce yourself (especially in rural areas) and reference where you saw the ad: Hello, this is Buck Sexton from my town, Montana. I saw your ad in the Billings Gazette. (Don’t waste your time or theirs by saying “I’m very interested” they know your interested that’s why you called. Also don’t ask “why are you selling it” Its none of your business. Obviously they would rather have the money than the land. And please don’t say “I’m calling to inquire regarding…..” I hear this all to often.
1, Its not grammatically correct.
2, Your probably not from England nor are you a reporter.
3, It just sounds stupid.
4, it’s a dead giveaway for a rookie.

After your polite introduction, (Always make it a point to start off politely, if they decide to be an ass then act accordingly) Your not going to improve your situation by insulting there property. Don’t say things like “junk land” or “its not good for anything”. If your calling for a price, don’t say “WHHHHHAAAAT” like you’re flabbergasted. If the price is to high, YOU need to decide whether to move on or work on lowering the price. If your counting on owner financing don’t expect to get both. To get a price lowered CASH will work wonders.

Try something like this;
You :It says in your ad your asking 20k for your parcel.

Seller: yep!

You: Well could you take a down payment, with terms? ( if you don’t have money for a down just say “terms”)

Seller: Well maybe what kind of terms were you thinking? I can’t wait forever for MY money.
(ok here’s the thing, he knows the market sucks. The property is costing him money, And if he is like most people he needs money too. He also knows bank loans are tough to come by, especially on raw land. Also if its been for sale for a while he is probably tired of talking to whistle dickers).

(Do you remember I said to figure your cash situation first?
This is why, He wants to here about money! How much are you going to give him!)

You say: (try to keep it general) Well I could do something like, 2k down and a Balloon in 5 yrs.

Seller says: Well, what kind of of interest are ya thinking?

Now at this point you need to decide weather to keep punching numbers or stop and do some figuring. The norm on a C4D is 10% give or take. But honestly the interest rate on a short term note wont make that big of a difference.
The thing that will bite you is the amortization term. Its sad to say but any payments you make in that five year term will be lost to interest (front-loading). The trick here is to make the amortization term as long as the seller will allow, There-by lowering your payments and lessening your loss.

Remember you will need to pay your balance in 5 years it will be slightly less than 18k. If you don’t; you will lose it all!

To be continued: in part II

No comments:

Post a Comment