OT: where to find financing to buy out Contract for Deed.

I need some ideas. My local bank not interested in using out my of state (Nebraska) farm land as security. Same issue with both postal credit unions I belong to, APCU in Atlanta, Eagle Legacy in Denver.

We are about 8 years in to a 10 year balloon on my 5 acres where I live here in IL. The deed holder is dying of cancer also, I want the deed done before he dies.

My 80 in NE is owned free and clear. So far I have contacted Janus Mortgage, Denver, CO. I can POSSIBLY do a cash out on the 80, but it would be around $114K max by their loan to value standards.

Whole story: We still owe +/- 45k on the 5 acres. 1987 singlewide trailer is junk, unable to insure because of age and condition, meaning water and hail damage.

We can purchase a BRAND NEW 28x56 delivered and set up for 59,995. In other words 60K.

45K + 60K = 105K. Need to pour piers for it, best guess from a dealer I talked to yesterday said 16x80 piers run 750. That is 2 rows, 5 rows would be 750+750+375= 1875. Same pier math works for a 32x80.

32x80, 2002 Southern can be bought for 42,500 + 5K labor and hauling IN WRITING delivered and set up.

That is the end of my necessary housing needs. Our other need is storage: hay, equipment, and all the odds and ends everybody has. 1.4 acres with 42x81 and 32x45 genuine Morton buildings are for sale less than 2 miles away for $48,500 with a house, single car garage and small storage shed. It is in foreclosure, and we think 35-40K would actually buy it. We would turn the house in to a rental, we just need the Mortons. NO, the wife has allergies that won't allow living in that house, that is one of the reasons we are buying nearly new.

Anyhow, ANY LENDER IDEAS for 80 acres in NE coupled with 2 IL properties for around 150K total? I don't want to tap my TSP (Thrift Savings Plan) for a down payment if possible. DOUG

Try Farm Credit Services. They may be able to put a mortgage against the land in Nebraska.

Gary

Doug, I got bogged down in your details but there is private money available in about any market. You just have to find it. The trick is to keep your loan-to-value (LTV) low. The mortgages I've carried were never over 40% LTV. Creditworthiness I could care less about.

Financing a $60k new doublewide isn't anything I'd look forward to, only consider if the land value carried the note. Mobile homes depreciate, not appreciate, everywhere I've lived.

I help folks interested in non-standard housing, often underground. With no direct comps, they're left out of the normal mortgage market. Appraisers won't touch them. Private money to the rescue. For anybody with a chunk of cash to park somewhere, a low LTV mortgage sure looks good at 6%, maybe less. Guy in Atlanta found 5%.

Another route is credit unions. Just got an ad from mine- they're looking for mortgages. No origination fee. Last I asked, I could get a 60% LTV with no documentation or closing costs, all based on the assessed value. That was on my unimproved land, worth far more than my house.

Regarding allergies, I a lot know more about that with housing. Air changes are the solution. Your new doublewide will be full of formaldehyde, like those FEMA trailers but with a lot more air to dilute it. Not a problem, just something that needs ventilation. My house gets a total air change every 2 hrs. More than necessary, but a great luxury. As my house self-heats/cools, not an expensive luxury.

It's the only way I was able to live with the allergens that come with the climate here and still do woodworking. Had to learn how to get a house that would let me live here. I filter the air before it comes into the house. Guests often notice that our indoor air is unusual.

Good luck.

I'd just walk away from the 45K you owe on the 5 acres. If it was worth it you could get a loan on it despite the value of the trailer you have on it. If it's not worth it the banks are doing you a favor by not loaning against it.

1987 single wide how junk is it, in some parts that is considered a newer model, spend 5k build a roof over it and barn boards with batten, the hell with insurance and stay (less) out of debt, like the other guy said if you walk your credit goes, what did you pay for it

Doug, I understand why you would like the Deed BEFORE the seller passes away (and so would I) but in any Contract for Deeds I prepare and like about any Ive reviewed (and can even be as a matter of common law regardless), its binding on the SUCCESSORS HEIRS AND ASSIGNS so you dont necessarily have to do anything right away even, dont get me wrong, its still good if you did.

Perhaps in another year your own and/or the mortgage availability might improve BUT WHO KNOWS???

Its also important what the Contract says about the balloon payment and what if you cant complete the deal ?? On ones I prepare I make that a plain old default and then the default provisions in the contract rule SUBJECT TO your states common law restrictions/provisions i.e. not everything in a contract may be enforceable as a matter of law.

In years past we used to do a lot of Contract for Deed sales but they have fallen out of favor and it makes a HUGE difference in ones I prepare depending on if Im working for the Seller or Buyer. My more recent ones (if I rep the Buyer) we either use Escrow agreements or the Seller delivers a deed but takes back a first mortgage. If I rep the seller its contract for deed and Id prefer the contract isnt even recorded.

So shop around,,,,,do your homework,,,,,,,and consult local trained professional attorneys if you have legal questions versus lay opinions, theres just too much at stake here,,,,,

Like you I would prefer to have a Deed and mortgage versus a contractual promise (maybe now from an heir) that you will get a Deed once all is paid!!!!!

Best wishes and God Bless

John T Country Lawyer in Indiana

Doug, I have to agree with VaTom. I'm afraid you may be digging a hole you can never get out of. Having been through a contract for deed which involved the death of the lein holder I know that it really doesn't change the end result as JohnT says but may extend it.
I don't think this is a good time to be taking on a lot of new debt. I sympathize with your wifes problem but surely there are other ways. Best of luck whatever you decide.

The 87 is a money pit, we had a 10 day power outage last winter. Too much water damage while the pipes were breaking. Generator picked a bad time to break the ears off the recoil, and all the neighbors were in the same boat as far as borrowing one.

The floors are ready to break thru, the tin roof leaks no matter how well I seal it, the air conditioner gave up this summer, the furnace has had two service calls already this fall. Insulation has all settled to the bottom of the walls, one electrical circuit pops the breaker if ANY load put on it. Just too far gone. It looks nice inside, but only the new carpet we installed before we moved in is keeping the floors from going clear thru.

Would like to have a house, but NONE are or will be available with enough room for the farm equipment and wife's horses as close to work and my mail route. Location is right, just need better living quarters with enuf room to store stuff.DOUG

DOUG,
GOOGLE FARM CREDIT SERVICES... I STUMBLED ON THEM WHEN TRYING TO FIND FINANCING FOR SOME LAND AND THEY SEEM LIKE A GREAT OUTFIT. BASICALLY, THEY'RE A "CREDIT UNION" FOR FARMERS AND WILL FINANCE ANYTHING YOU NEED FOR FARMING AT REASONABLE RATES. HTH, ...D