Exploring Options

The place I was looking at all fell through because they wanted 20 grand down payment. I also got a letter today from my bank saying I was denied credit on account of not having a credit score and because my "obligations were excessive". I don't have any debt tho... I guess there is a downside to always living within my means. haha... ^_^; Back to square one eh.

I'm thinking I have to find a way to save up about 11,000 so they won't say no no matter that I don't have credit. I'm considering moving into an apartment for a few years to free up about 485$ per month. I'd have 11,000 saved in 2 years compared to this house.

If anyone's got other ideas I'm all ears.

You can build up credit with a secured credit card, if you want to go the credit route.  (They still might turn you down for some reason or other, though!)  It takes 6 months to a year.  You have to put down money for the card, and that's your credit limit.  Pay it off every month, get a second card when you can and pay it off every month, too.  After a while you'll have a credit rating.  The credit rating should be good, and climb steadily as long as you never go near your credit limit.  (I think 1/3 of your limit was as high as you're supposed to go?)  This was the advice I read when I was looking into building credit, and it worked for me.  I've since cancelled all credit cards and don't know if it's worth the bother to hang onto a credit rating or not.  But my rating is pretty good...at least for now!!


*edit* I should add I didn't have any bad credit to fix...I just always paid in cash or with debit before finding out that wouldn't give me a credit rating.

Lori Whit wrote:You can build up credit with a secured credit card, if you want to go the credit route.  (They still might turn you down for some reason or other, though!)  It takes 6 months to a year.  You have to put down money for the card, and that's your credit limit.  Pay it off every month, get a second card when you can and pay it off every month, too.  After a while you'll have a credit rating.  The credit rating should be good, and climb steadily as long as you never go near your credit limit.  (I think 1/3 of your limit was as high as you're supposed to go?)  This was the advice I read when I was looking into building credit, and it worked for me.  I've since cancelled all credit cards and don't know if it's worth the bother to hang onto a credit rating or not.  But my rating is pretty good...at least for now!!


*edit* I should add I didn't have any bad credit to fix...I just always paid in cash or with debit before finding out that wouldn't give me a credit rating.

I was turned down for 3 credit cards due to lack of a credit score. My brother is having the same issue. He's even bought 2 vehicles but doesn't have a credit score because he paid in cash.

Have you asked the bank that holds your savings? A big hint you might take your money elsewhere might help you to get a credit card 🤡

A secured credit card (I got one from the bank where I keep my savings) involves putting down a set amount of money.  It's not like a regular credit card.  You won't be turned down.

Mine cost $500 which I had to wait a year to get back.  And it turned out I had to close the card to get it back, too.  But I kept the credit rating.

The key to buying land is to stay away from realtors and the internet because that sort of presence means fees of some sort and the buyer has to pay that off.

People who are willing to self-finance land with little or no down payment are more likely to be the quiet landowners you have to go find, end up having a friendship with, and winning their trust. There are horror stories regarding this on both the seller and buyer side, but they are everywhere.

The problem today is, no one wants to invest that much time in buying a place. They want to see it, make a deal and be on it, yet it is exactly because of that the the best places are not advertised as for even being for sale. Today people are clamoring for friendships in this modern electronic world.

My suggestion to you is, instead of trying to join the system by gaining enough money to enter the world of farm ownership, spend your time trying to find land that can be had by being owner financed. That takes time and leg work, but you would be so much better for it. Not only would you see a lot of land and get ideas on what others are doing, you might even make some friends along the way.

Things to avoid:
(1) Farm Link type memberships: it is rather a scam. The number of sellers to people interested in buying land is so lopsided, people end up paying lots of money on memberships that never materialize into land. I honestly think they should be labeled an outright scam, but I suppose legally they are legal. Anyway, stay away from them!

(2) Land for sale that have signs that say "Will owner finance" as they are seller scam artists for the most part, just waiting for you to miss a payment and take it back. They also will have higher prices

Instead try:

(1)Asking around at LOCAL feed stores and eateries. It will take time, but investing in time always saves money. Since a lack of money is a problem, well invest in time and trying to meet people.

(2)If a lead on a place falls through, ask if they might know of another farm for sale. I am a 9th generational farm...I know tons of farms that are for sale yet are not advertised. No one asks so I never get a chance to say.

(3)Do not be put off by the run-down nature of the place. You can always upgrade dwellings after the purchase. Owners get tired of people telling them their Grandmother's house is a pice of garbage, when they look on it with fondness and good memories. I have seen so many farms that could have been bought by putting $10,000 into the house to make it livable, and acres of land be bought dirt cheap, yet people walked away. I know that because I have a place like this. Myself I would burn the old house to the ground, but my Father was born and grew up there so I can't touch it.

(4)Be sensitive. Most of the time people love nostalgia and want to continue what has been done in the past. Bank on that, not through deception...I would never advocate that...but even if you intend to go permiculture on a conventional farm, asserting that to a potential buyer right up front is going to lead to frustration. A better approach would be to understand that as you make the conversion, use it as an educational tool THEN...not before the sale...after a deeper friendship is made.

(I once had a woman who was going to move onto my farm on 30 acres I do not use and live in a house there. She kept insisting she was going to wild and crazy things, when in reality...compared to Permiculture...it was rather tame. I was not put off by anything she said, but had it been a true conventional farmer I am sure she would have talked herself out of a potential farm).

(5) Do not be put off by your age difference or appearance. The world is changing and even old duffers like myself who have farmed all our lives know that. Thinking up front your appearance or age difference will automatically disqualify you is self-defeating. Sellers want assurance, and while you may indeed wish to change the farm drastically through a friendship that can take place. It takes trust, and trust takes friendship and time. A great approach is not to gush with lies about keeping things the same, but rather saying, "I want my farm to work out, and I hope to use what has worked in eh past, with maybe some new ideas. Jesh I hope you can explain what your grandfather did because obviously he had a great farm." And then after purchase maybe include them up front in the discussion. "You know they used to use swales, and while I am not sure if your grandfather had any, I was thinking of installing one. Your thoughts on that?" No one likes change and surprises.

Will all this work?

I have no idea, but nice owner-financed farms are out their in droves, people just drive by them everyday not knowing because they are not advertised. Money is tight for everyone, taxes are due every year, and a little something is better than nothing to a farm owner not using it. Add in a little assurance of nostalgia, some kind words regarding the farms preceeding history, and you would be surprised what you might be able to buy. No $11,000 needed.

Best wishes on your quest!

That list is truly awesome!!

That sounds like really solid advice Travis. I hadn't even considered it. That said, my area (Fairfield co OH) is a mix of suburban areas and huge farms. Could I post notices in feed stores in the next county over where it is all rural and there is no development? Like:

"Family looking for land to start small farm, can pay 600$ per month, needs some woods and some clear, call 555-555-5555"

...or something like that?

Honestly, and I understand what you are saying, you can try it, but your chances of succeeding are rather low. It goes back to my main point...meet with people where they are. SOMETHING PERSONAL, a slip of paper tacked to a bulletin board isn't, and it is easy to ignore.

Did you know statistically speaking you are more likely to get a yes answer from a request by a staggering 630% if you ask in person?

Same thing with this. It takes guts, and you'll be turned down at times, but my suggestion is to invest time in that county one county over and see what is available. Then try to hone in on potential places. From there just try and be patient. people do not make snap decisions per se, most like to loll things over in their mind, like..."mmm, that family seemed nice. I would like to see Grandfather's place be used for something...maybe a little money for taxes...they seemed like a nice family..." It is hard to describe how to be tactful and not smoother them with sweet-talking sheep manure, yet also not offend them by thinking it will be a 1970's hippy commune either.

Just look at this as an adventure; a land quest, and that while it will consume a fair amount of your precious time, it is equally going to save you a lot of cash. Myself, I would rather buy a $2500 camper and live in that with my family on a farm that I own, then pay rent, working gobs of overtime, just to pay into a crazy land buying system where the middleman gets $11,000 as a commission. Just remember my mantra regarding middlemen: When you eliminate the middleman, yes you get to keep their fee, but you must also do the work they do. Going out and asking personally is doing that sort of realtors job.

My grandmother has been dead for many years now, yet I own her home, as well as mine across the road. The house could use work, but is livable, and has 30 acres with it that I do not use for farming just because I got so many acres on my own side of the road. In about 10 years time, I have had 1 person show up, look at my Grandmother's house, then drive off. Were they squatters looking for a house to barge into, or were they homesteaders looking for a place? If it was the latter, I might have allowed them an opportunity to have a house and 30 acres for lease since I am not exactly using it. Instead, they drove off without bothering to drive across the road and inquire about the place. Even if they disliked the home, they had no idea that the place has a trailer lot too with well and septic that they could have put in a house trailer or camper and farmed 30 acres. The point is, they never asked...

Ask, you might be surprised what the answer is. There is a 630% chance it will be a positive one over that of emails, mailings, or notes tacked up on a bulletin board.

Having a good credit score won't help much these days if you are self employed.  I have almost perfect credit and more than 20% to put down, in cash.  But, I have been turned down by every bank I have approached for a mortgage because I am self employed.   Being self employed, I limit my tax liability by re-investing in my business.  Current banking regs result in having to take fewer deductions and pay way more than necessary in taxes to show maximum income, in order to qualify for a mortgage.... and they still don't like to loan to self employed people.  They want your money in a savings account, not invested, not deferred.... maximum taxation and liability.  Even Ben Stein got turned down for a mortgage recently for similar reasons, and he is a millionaire!!    

Bottom line:  I do not view or even consider buying a property without first finding out if the owner will finance.  Owner financing works out great for the owner - they make the interest on the mortgage rather than a bank (which can mean making up to double to asking price on a 30 year mortgage).  Realtors often don't like this though, because they are either unfamiliar with it or unsure of how to collect their commission.   I usually have to pull up an amortization chart for the owner and educate the realtor.   So, far, most who are not over leveraged have been very willing to consider it.  A lot of farm land ends up being sold by heirs, who don't have loans to pay off.

Perhaps this will help -  why make bankers rich when you can make a deal with an individual?  You still sign the same contract - just remove the middle man.

If you decide you still want to go the route of getting a loan, try a credit union instead of a bank. Credit unions are basically financial co-ops and like other co-ops they're owned by the membership not by shareholders. This means they often have better deals for their members since their focus is supporting their members rather than generating dividends.

Going to the credit union tomorrow to apply for secured credit card. Been all over the place with no luck finding owner financed land for sale, though I did leave a calling card with several folk in the event they changed their minds about their down payment requirements.

Dave Ramsey has advice on buying without credit. One of the things he recommends is looking for a mortgage provider that still does old school "manual underwriting." That allows them to be more flexible than banks etc. that rely on formulas and fixed policies. I don't always agree with Dave, but he gives away a lot of solid advice.