Financing Home Buying Status Updates

It closed! It closed? Officially a land owner!!!!

I cannot belive that this deal has finally closed. I have had dreams about owning this property and I am not one to dream often. I am incredibly excited and cannot wait to get everything setup at the property!

I spent about 3 days out there so far testing out the tractor (so much fun) and starting to work on the house. At the final walk through the kitchen sink would not turn on; but the sprayer worked. At first I thought it was a problem with the plumbing (which would have delayed closing) but my realtor who was there helping with the final walk through pointed out the sprayer worked fine. Similar problem in another bathroom, low flow but other places were fine. I finally twisted the aerator off in the bathroom and it had a ton of debris in it. Once that was cleared it ran fine. I tried to do the same with the kitchen but ended up breaking the who thing.

There is also another issue with the pressure tank short cycling. This could mean that the inner bladder has ruptured or the tank has lost air and needs to be pumped back up. I was able to find some excellent YouTube videos on how to solve short cycling of the pressure tank pump. I followed them and for a while it seemed to be working fine, but then before leaving I noticed it was back to short cycling.

There is a ton of electrical work that needs to be done as well but can wait for the short term. While speaking with a plumber about getting them out there I mentioned the tank issue and he said it sounded like it needed air – I skipped that step before, so I ordered a digital hand held air pump. I have a normal air pump but getting it to the well will be too difficult, and then also getting power to it is just not going to be easy. For $35 it is just easier to get one of these nice hand held air compressors with digital gauges so it shuts off when it reaches the right pressure. that I will use to test the pressure and add as needed to the tanks spec. I really hope that this works to correct the issue because the problem really gets bad when you try and use the hot water; it appears that the tankless hot water heater only kicks on when it has enough pressure, and if you want to use hot and cold at the same time it does not have enough pressure so the hot kicks off. It looks like the cost to replace one of the pressure tanks runs about $1,000 with service. Oddly the previous owners left a brand new tank behind, so part of me thinks that they knew there might be an issue with the tank but they also left behind easily a few thousand dollars in other equipment too; some looks brand new (like a huge post hole digger, or pressure washer and air compressor).

In fact when I started to really go through the buildings I kept finding all kinds of goodies. Tools, lawn care equipment, paint, hardware. Tons of stuff left behind including all appliances in the house including the smaller stuff like a nice toaster oven and basic microwave. Also a really cool electronic touchless trash can, a window AC unit, several new looking doors, a folding table, dresser, shelving units… lots of little bonuses.

I gathered up a list of things I need immediatley and started ordering. Most of the “right now” stuff will be here this week (I am back in Houston). I placed a service request on American Home Shield’s warranty portal to get the faucet fixed. I went ahead an purchased another faucet (thought I kind of wonder if that was a bad idea since the warranty would probably have covered the cost (it was $100) but because of the ice / winter storm situation in Texas it is going to be several weeks before anyone can come out to fix it. I had planned on doing it on my own, but I found out that the lines under the counter are nothing like the lines on the new faucet. I should use this as a learning opportunity but I have so much going on right now it is just not worth the stress of it. Plus I can have the service guy look at the pressure tank if I cannot get that working.

I am still looking for a electrician; which will be a much bigger job.

I know it has only been a few days of owning this property… but I am in love. From the trails to the huge lawn to the insane tranquility of it all. Its amazing. And kind of scary, but more amazing than anything else. I am so excited to get out there as soon as possible, though it will be weeks realistically before that happens full time.

Status Updates Tools

Tractor Secured

One of the things on the long list of things that I need to buy as soon as this deal closes was a tractor. I knew going in with this much land your typical riding lawn mower was not going to cut it (lol). I had used one of those on a house I had with just 1/2 an acre, and it still took hours to cut a full law. The lawn on this property is several acres easy. Most of this sits in front of the house, tons of trees and what will become, with a little love beautiful green grass.

The previous owner had a houmongous tractor; I honestly did not think I needed that much tractor, but they mentioned they were going to sell it and gave me first offer. I still think it might be a bit much, but having more tractor seems like better than not having enough tractor.

Once the offer was given, I reached out to friends and the internet to make sure it was a fair deal. I know nothing of tractors and man, what a world. One thing I learned quick was that tractors hold value… like really hold value very well. Discounts on good brands (usually the green ones and orange ones) are not much. It also seems that there tends to be a million versions of the same tractor with just a tiny difference making it a completely different model.

Needless to say I have learned a lot about tractors over the last week. I must have watched about three hours straight of Messick’s YouTube videos just going over tractor types and appointments and 8+ hours all together. The videos are so well done I even feel confident jumping on the tractor and running it and am excited instead of intimidated.

This deal is of course dependent on closing the house deal… but right now my confidence is at an all time high that this sale will finally close.

The tractor is a Kubota L3901. This is an extremely popular model and includes a front loader, quick hitch, 65″ cutter and 60″ scraper. The cutter should make easy work of the lawn and trails. The scraper will come in handy for regrading the gravel drive. The most exciting part for me is the loader. Having a loader means I can order up a full dump truck of gravel, soil and rocks at a time and use the loader to spread and transport the material to where it is needed instead of breaking my back with a wheelbarrow going back and fourth.

Financing Home Buying Status Updates

It’s back!

I have not been totally transparent on the number of things that have seemingly killed this deal only to have it spring back to life. Like a cat it must have nine lives and it has all but chewed through 8 of them at this point. After thinking it was dead and gone for certain last week and going as far as to have my realtor draw up the cancelation for the contract to get the earnest money back — once again the sellers and both realtors have come together to find another way to close this deal.

Its not that this avenue was not tried in the past — it just did not pan out very well in the past and was avoided due to a bad initial experience.

The biggest issue that has come up with buying this property is the type of home that it is or is not. See, when you look at the pictures without going inside you might think that this was just a normal pier and beam home. In fact even going in side you might not really tell sometehing was off right away, but it is there. In the front of the home it is basically a full width living room with vaulted ceilings and a fireplace. Going from the living room to the dining room you notice immediatley that those vaulted ceilings are now only about 6.5′. This was the first give away that this was not a normal pier and beam home, but none of the paperwork we had told us otherwise.

It eventually came out during the insurance (or even before then, I forget) when they found paperwork on a mobile home being the primary residence. This is of course in stark contrast to what you see when you get there. There is nothing mobile about this piece of property as it has been so heavily modified the only thing that remains is a small piece of the structures metal framing. The rest is all add on including the front living room, possibly one bath room and one bedroom, the carport and shop area, breezway and prorches. Now I am not saying you cannot finance a mobile home. There are tons of people that will finance mobile homes. But there are very few people who will finance a single wide mobile home. The ones that will charge an arm and a leg for the privilege. Mind you – that is only if you have a single wide.

If this were a double wide mobile home then everything would have been fine. Nobody was sure what it was any more. My personal belief was that it was modified so heavily that it was more of a regular single family home than any mobile home. My realtor though the same, as did the broker and pretty much everyone else that had been there. At worse we though it would be classified as a double wide mobile home which was still fine for financing and insurance purposes.

The person that determines what kind of structure the property is lies in the hands of the appraiser. I ended up paying for this to be done early – right after inspections so underwriting would not get hung up. We were all blown away when he came back and classified it as a single wide mobile home. I ended up calling to see what was up with that and he explained that it was industry standard. Once a structure has been classified as one thing, it is always that thing. So even if the previous owners built a hotel off of that, it would still be a single wide mobile home.

This is what killed the deal last time. Once it was classified as a mobile home it ruled out any investors from the broker that I was using, meaning getting a snazzy 2.50 – 2.65% rate was out of the window. That was it for me. I was done, I am already kind of numb by this entire rollercoaster to be honest. I asked my realtor to draw up the cancelation so I can start looking again. This sparked a fury of work behind the scenes (honestly this is where my realtor starts to earn that commission (aside from crawling under houses in full business attire).

I was presented with an offer from a Farm CoOp financing offer that was better than the one I had pursued when all this mess about the mobile home started (to make sure I had a backup plan if my broker fell though and meet the 1/31 contract deadline).

Originally when I checked into this option the rates were 5.85%, but being a co-op means you do get some money back at the end of the year. The amount was not explained, honestly I was so put off by 5.85% when 2.5 – 2.75% was the norm (and with my credit I qualify for easily). Why would I pay double, the money did not make any sense. The P&I payment at that rate is nearly 50% more cutting into my savings goals for moving to this lower cost housing.

Anyway the new rates were only .85% less (4.99%) but the co-op side of it was explained more. Average is 1.1% over the last 14 years with one year being 2.5% back. 4% is high given current rates (shit is is higher than what I have currently for the McMansion) but in the end it is about $80/month more than what I had planned on — for the property I can live with that. So we are back on.

This deal can still die (again) and I will not resuscitate it again — its too much for me. Also the owners are kind of fucked now for selling this property. It would take another person like me willing to jump through all these hoops and pay more to close it. I also understand that I will be in this same position when I go to sell it (if I sell it) but I do have plans to improve the property and get the value off of the primary house (by adding another regular modular home).

It should be clear if this deal is going to close in about 3 weeks once the CoOp does their appraisal – which is not necessarily based on the house but more on the land (probably should have explained that this is why this option works — its basically a farm loan).

Financing Status Updates

Its dead

Welp. Its is officially dead. After calling 6 local banks and two national manufactured home lenders it is as dead as a doornail. There was one local bank that was possibly on board, but I would need to toss another grand at it to have the honor of having a high mortgage rate. I also called two national mobile home mortgage companies and the rates started at nearly double the going rates (around 5.75%).

So there it is. Dead. A very expensive lesson learned. The search for some woods for this geek continues!

Status Updates

This dream is dying. I am crushed.

The financing for this dream has fallen though. The broker that I am working with does not have any investors that will finance a single wide (though this is certainly not a single wide). Finding easy financing for this deal has ended, but it is not over. I am still going to be calling local banks on Monday (as recommended by the appraiser) to see if they can finance this deal as they are more than likely used to seeing property like this in their local area. The problem with the smaller banks is that they are typically not going to be offering industry low rates, even with my amazing credit, down payment and income to support the deal.

Right now the options are to either take a agricultural loan at nearly 6%, or end the contract. I will still get my earnest money back, but I will have lost the price I paid for the inspections, appraisal and option fee (about $2,000).

Part of me is in – do what ever it takes to make this happen, you are not likely to find a setup like this again. The money side of me says — while you would still save about $400 a month moving out there, this is not what the plan was. The original deal was to take advantage of the cheap money that is out there and save $1,000 plus per month. At 6% the P&I is actually more expensive then where I currently live, the difference only comes into the taxes.

At this point I am willing to take a bit of a hit on the cost of the loan (and save a little less), willing to go up to 4% basically to make this happen. I would have never in a million years thought that I would be obsessing over this land the way I am. Everything about it feels right (other than the mildly terrifying part about moving into the woods and all that). I can see in my mind me living here for a long time, something I have never ever really done in any of the homes that I have owned. They always seemed like temporary investments I get to live in for a while before I move on.

Monday will be a calling frenzy. There are about 3 super local banks and 3 other banks I want to give a call. The plan is to just put it all out there on the table since my contract time only last to the end of the month. If it can happen I should know on Monday.