Off-grid financing

Also, housing prices don't always go up. Maybe they do when you are looking at a 20 year time span, but you could get burned in the short term, as many found out in 2009. I learned this through observation by looking at where the housing prices in Denver went in the 80s...
 
Everskyward said:
Also, housing prices don't always go up. Maybe they do when you are looking at a 20 year time span, but you could get burned in the short term, as many found out in 2009. I learned this through observation by looking at where the housing prices in Denver went in the 80s...
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In the early 2000s, I rented a condo in CT for a couple of years that was worth 60% of what the owner had paid for it in the late 80s. At the time he bought it, the insurance industry and Pratt&Whitney were going full steam ahead, prices were rising and you were going to 'lose out' if you didn't buy your own place. Economic fortunes for the area changed and the market was saturated with properties people had to unload at prices below what they owed on them.
 
Everskyward said:
Also, housing prices don't always go up. Maybe they do when you are looking at a 20 year time span, but you could get burned in the short term, as many found out in 2009. I learned this through observation by looking at where the housing prices in Denver went in the 80s...
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Still kicking myself for not holding on to that condo, but we couldn't afford to keep it and the next place back then.

It would have paid for itself many times over with the increases in rent around here. Our mortgage on it was close to $1000/mo lower than what it's renting out for today.

But it's all relative. Salaries in this market were super soft back then. They're much better today which keeps the ratio of salary to housing fairly close, but they've been widening in Denver for a while now.

That's the real measure of housing in any location. It's all ratios. As long as you're getting more of the funny money they're printing, things are good. You're not getting a "raise" at 3-4% a year though. Not with inflation.
 
Joshuajayg said:
Not really much for collateral otherwise this would probably be a lot easier.

Thanks! It is an adventure. We are under contract until May 1 so it isn't going to drag on forever. Either we figure it out or we are out our earnest money and have to wait until we are in a better situation.
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I take it that you're in NM? There are many similar properties bought and sold in southern CO. I'm certian that not all of them are cash or owner finance.
Mabe you could take out a construction/perm loan to cover the cost of land, house, well, septic, and power. Once you get CO, and permanem mortgage, "cut the cord" with the power company.
 
When we had a fire in the hills, they discovered a house no one knew about. It was on Forest Service land and it had a piggybacked electrical off someone elses power. Guy claimed he "bought it" back in the 70's from some guy. He'd been there so long they actually let him have that.
The Forest Service bulldozed a whole shanty town like that up near Breckenridge back in 73. I think its name was Lincoln. A whole town of squatters. Then there is Ward. You go snooping around there and someone will appear in a racoon hat carrying rifle followed by a 1/2 dozen flower girls, half of them pregnant....or yuppies planting their garden in the easement etc. Never know fer sure....
 
Just talked to my Dad. He told me how his wife sold her place in Jasper. (also off the grid) The buyers went to the nearest town with a bank. (about 35 miles away)
Took out a loan, and bought the place. The local bank knows the area, and the type of housing in that area. Of course there were the usual hoops, such as appraisal, inspection, and whatall, but, they came accross with the bucks.
But he also went on to tell me that the majority of properties in that area, (100% of which are off grid) were bought with cash, either out of pocket, or using something else as collateral.
So, you may benefit by going to the same bank where the seller does his local banking, and inquire there. Of course your down payment will be considerably higher than it would be for a standard "spec" house in a subdivision (with HOA) in a major city. But remember, cash up front = equity up front.
My house here in GA, is not connected to any well, or city/county water, I do have power. I get water from rainfall on the roof, and a spring, which ends up in a cistern, to be used in the house. I had no trouble getting a loan, but I started with a construction loan, built the house, and
rolled it into a mortgage when the house was built.
Septic, and indoor plumbing, is handy to have, especially when it's "40 below" outside. (no need for a chamber pot) And you'll still be off grid.
I have an off the grid place in CO, where my Dad lived for about 30 years. (I say "off grid", it has a phone line) He gave it to us kids when his wife made him move to town. And now, he's gotten so many candles on his B-day cake, he's afraid it would burn down if he had another B-day there.
I doubt that we'll ever sell it. Even though I can only go there for mabe a week in 5 or 6 years. But my sister makes a week or so up there every year. And takes care of upkeep. But we all pitch in on the cost.
 
bluerooster said:
I take it that you're in NM? There are many similar properties bought and sold in southern CO. I'm certian that not all of them are cash or owner finance.
Mabe you could take out a construction/perm loan to cover the cost of land, house, well, septic, and power. Once you get CO, and permanem mortgage, "cut the cord" with the power company.
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Not in NM. Left there in late 2013. In Colorado at the moment. Property is in Utah.

To get power to the house would be cost prohibitive (think hundreds of thousands) plus there is the trouble of getting easements. Not the way I want to go with the property. But now it is all for naught. My last lead on lending fell off the proverbial cliff. Looks like we are going to rent and buy when we have enough to pay cash. It'll all be okay in the end. We have patience and plenty of gusto.
 
coloradobluesky said:
When we had a fire in the hills, they discovered a house no one knew about. It was on Forest Service land and it had a piggybacked electrical off someone elses power. Guy claimed he "bought it" back in the 70's from some guy. He'd been there so long they actually let him have that.
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I believe squatters rights in CO start at 15 years, but I'd have to go look it up. Might be 10.

Usually used for encroachment across property lines. Someone comes along 10-15 years after a neighbor built an improvement across a line and does a new survey and notices and then says it has to be ripped up... if the person who put it there can prove its been there longer than the statute, they get the property line moved.

Ironically, before the timeframe is up, or if the timeline can't be proven, and there's an over riding sub-division document -- you can't GIVE the property away. A friend tried to do that when he sold his house and found the neighbor had been over the line by a large margin on one end of the property for decades, but they couldn't PROVE when the fence and trees went up.

So the county wouldn't let them just sign away the 1/4 acre that was encroached claiming they'd need proof of how long it was all there so they could retroactively fix the property taxes back 20'years, and also that the subdivision bylaws wouldn't allow the "smaller" plot so there'd have to be a public meeting, and a variance issued, and yadda yadda yadda...

All both parties wanted to do was give the land to the neighbors and not worry about it. They're not the original neighbors, and nobody cares about the encroachment at all.

He ended up having to sell the place with warnings that the new owners were being encroached upon by the neighbors. The new owners didn't care, and as far as I know are also paying the property taxes for the 1/8 acre that was accidentally lopped off in the late 80s.

The only good part is the official clock is now ticking and someday someone will be able to file the squatters right paperwork to officially claim the land and then the county won't have any choice but to let state law override the subdivision filing, and start charging the taxes correctly.

I mention all that because I wonder if that's how the "found" house was allowed to stay. But I doubt the squatting laws apply to federal land.

Keeps a bunch of lawyers well fed, all of this, I'm sure. Ha.
 
I told the owner we're getting out of the contract due to financing. His reply was basically, "if you can't finance this place no one can and we will never sell it." So he offered owner financing. We've settled the details and we are closing February 15th.

Met with the well driller on the property yesterday. Chose a location and got a price for the well in writing. Met some good neighbors. All is working out now.
 
Joshuajayg said:
I told the owner we're getting out of the contract due to financing. His reply was basically, "if you can't finance this place no one can and we will never sell it." So he offered owner financing. We've settled the details and we are closing February 15th.

Met with the well driller on the property yesterday. Chose a location and got a price for the well in writing. Met some good neighbors. All is working out now.
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Congratulations! I think.

Make sure your contract allows you to pay off the note early. As you improve the place and you build an income history, you may be able to get a mortgage at better conditions. There is a way with owner financed properties to report your payments to the credit reporting agencies. Helpful if you need to deal with a bank down the line.
 
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Joshuajayg said:
I told the owner we're getting out of the contract due to financing. His reply was basically, "if you can't finance this place no one can and we will never sell it." So he offered owner financing. We've settled the details and we are closing February 15th.

Met with the well driller on the property yesterday. Chose a location and got a price for the well in writing. Met some good neighbors. All is working out now.
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Congrats!

Hand that dude a big wad of money and get him out of your life and your business in as few years as possible!
 
Joshuajayg said:
I told the owner we're getting out of the contract due to financing. His reply was basically, "if you can't finance this place no one can and we will never sell it." So he offered owner financing. We've settled the details and we are closing February 15th.

Met with the well driller on the property yesterday. Chose a location and got a price for the well in writing. Met some good neighbors. All is working out now.
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WOW!! Good to hear, and, to echo weilke, "I think".:lol:

Seriously, I've been following your thread with interest. I have a young niece who is hard core "off the grid" and I would be surprised if she and her fiance don't try to find a place just like this some day.
 
Good show on being able to close the deal!
 
Congrats. Now get to work on your manifesto!! Glad it worked out for you.
 
Regarding building equity, to realize the equity you need to sell the place. A potential purchaser buying the place from you will have the same problems you are having unless they are paying cash. Given the time currently on the market selling will be a big problem, and you'll likely incur a fair amount of selling costs.
 
scorpio said:
Regarding building equity, to realize the equity you need to sell the place. A potential purchaser buying the place from you will have the same problems you are having unless they are paying cash. Given the time currently on the market selling will be a big problem, and you'll likely incur a fair amount of selling costs.
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Once the place has solar power, a well and a septic, he will have far fewer difficulties selling down the line. Right now, the wife may be willing to put up with an outside ****ter, the day she is pregnant the OP will be out with a back-hoe and sticks of dynamite digging ditches to build a septic.
 
Joshuajayg said:
I told the owner we're getting out of the contract due to financing. His reply was basically, "if you can't finance this place no one can and we will never sell it." So he offered owner financing. We've settled the details and we are closing February 15th.

Met with the well driller on the property yesterday. Chose a location and got a price for the well in writing. Met some good neighbors. All is working out now.
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Congratulations! Glad to hear that it's working out for you.
 
Oh, and be sure to post pics of the new place. :)
 
Thanks, guys. I'll start working on my manifest soon enough, @mulligan . I'll post photos when I have things cleaned up and we are living there.

I agreed to an early payoff penalty since I got a much better interest rate than I had anticipated and the penalty in insubstantial. We have a nine year loan term so even if we make minimum payments, we'll own the place in nine years.

weilke said:
Once the place has solar power, a well and a septic, he will have far fewer difficulties selling down the line. Right now, the wife may be willing to put up with an outside ****ter, the day she is pregnant the OP will be out with a back-hoe and sticks of dynamite digging ditches to build a septic.
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We are not planning on a septic anytime soon. And as for having kids... good luck on that one. Haha.

scorpio said:
Regarding building equity, to realize the equity you need to sell the place. A potential purchaser buying the place from you will have the same problems you are having unless they are paying cash. Given the time currently on the market selling will be a big problem, and you'll likely incur a fair amount of selling costs.
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I realize the troubles in selling the place down the line. We plan to slowly improve the cabin so that it is possible to find a decent lender on the place. We would also consider owner financing when selling.
 
Very nice! Is the wood stove the primary cooking source as well?

Looks like the kind of setup my wife and I would like one day. For now, our 11 acres on-grid is sufficient.
 
Ted DuPuis said:
Very nice! Is the wood stove the primary cooking source as well?

Looks like the kind of setup my wife and I would like one day. For now, our 11 acres on-grid is sufficient.
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Wood stove is the only way to bake but there is a propane cooktop hidden next to the refrigerator. I don't typically cook on the propane because this time of year there is always a fire going if we are home.
 
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Joshuajayg said:
Wood stove is the only way to bake but there is a propane cooktop hidden next to the refrigerator. I don't typically cook on the propane because this time of year there is always a fire going if we are home.
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Makes sense, a good way of doing it.
 
I'm on the grid, but live like we're off in the bush, old habits die hard. I just got the combined heat and electricity bill for Feb timeframe, $95. Not bad for WI in the winter. It's usually 75 or better inside too.
 
That looks like a very comfy little pad. Nice. Got a chuckle out of the mason jars hanging under the cabinets. Grandpa did that for small parts in his garage for decades. Works good. Love all that pine, too.
 
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