For those interested I found a 25 year loan with 15% down @ 6% through Heritage Land Bank. About the best that I could find out there right now.

I'm under contract right now and am using Capital Farm Credit as well. Rates (15 year adjustable):

3 year reset: 5.8%
5 year reset: 6.4%
7 year reset: 7.0%
15 year fixed: 7.9%

I'm putting about 30% down and the loan has been approved, pending appraisal.

Did any of you have any issues with the land appraising at what you thought it would? That's really my only question now.

The appraisal is really nothing more than comparing what similar tracts of land in the area have sold for recently. In my area about 3k an acre depending on what the land looks like and what is on the land (electricity, water, and such).

Helo - Did you see the pics I put up of the place the other day? I bumped it a few times, but wasn't sure if you saw it.

I'm pretty sure I got the land for a steal, so if it doesn't appraise, I'm going to be pissed off.

No, I missed it. Where was it and what was the thread title?

Here it is.

It looks like you did find it. Land is right in between Caldwell and Lexington on the border of Lee and Burleson Counties. I'm trying not to think about it too much, because if it falls through I'm going to be depressed.

Yeah, just on the other side of Bryan. It will work out, might run across some problems, but that is how buying land goes. It seems to work out in the end. I took me about 6 months to close on mine.

This is a great topic. I just went throught this process this year, and it is VERY difficult to find information. Some suggestions from a guy who just went through it:

1) Get a good real estate broker that is familiar with the area to help you. I have bought homes without an agent, but this ain't buying a home. A good broker who is familiar with the area will provide you with a number of advantages:

a) He will know what is for sale out there. Unlike houses, not all land is listed for sale. A good broker will be able to show you things that you never knew were for sale.
b) He will know a great deal about the property you are looking at. Ownership history, bad neighbors, hunting history. These guys have lived there for years and have an amazing amount of knowledge about the history of most properties.
c) He will help you through all the things needed to be done to close. Loans, surveys, well tests, etc... things you likely do not even know need to be done if this is your first time.
d) He will have a ton of contacts to help you find local contractors/services. Want to build a home, fence, well, tank...a good broker can help you find someone.
e) Obviously he will understand the going rate for property in the area you are looking at, almost certainly, better then you do.
f) Finally, and this is BIG. He will help you understand all of the financial implications. I was shocked at how many financial surprises I had in the process were actually positive. Tax advantages of owning and improving your land are amazing, as mentioned earlier, ag exemption is amazing. Land loans are a bit more complicated/higher rates, but they can also have much more flexibile terms. Obviously, those advantages do not take the cost to zero (to be clear, no where close), but it may not cost as much as you think when you figure in tax savings.

Unless you really know what you are doing, get someone to help you, even if you think you know what your are going to buy.

2) Look at a bunch of places. Even if you love the place you are looking at now, look at some more. It will help you get a better feel for what you like/don't like, what you must have, want to have and must not have. I have been on a lot of places, but when I started looking at places from the perspective of this might be mine, I started noticing things that never really stood out to me before and seeing a variety of places helped me understand what was really important to me. You just start looking at things differently when it might be yours vs. just a lease.

3) If you have family and time with them is important to you, your family must LOVE the place too. I spend a lot of time on the ranch and I like being with my family, there has to be something there for my wife and daughter too. My son and I are more then happy being out there building fences, setting up feeders, walking the property. But the creek with the swimming hole attracts my daughter, a decent place to sleep makes my wife enjoy the place more. The final decision was a family decision, not just mine.

4) I would get a real estate lawyer to review all docs. It is really not that expensive and can avoid a nightmare if there are easement or access issues, mineral right issues. It is worth a few hundered dollars just to have a better sense of comfort that there are no surprises, and it is worth the cost of the ranch if the lawyer finds a big problem. I have been through legal issues on an easement associated with my house and trust me nobody wins, even if you win (I did), the cost,frustration, and the discomfort created with your neighbors (if they are involved) are not worth it.

5) Get a CPA or financial advisor and a lawyer (yea, I know that's two lawyers, but if the must exist use them to your advantage :-))who understands the financial impacts of buying property and setting up an agricultural business (if you are going to have livestock or lease grazing rights). Make sure you set this up right so that you do not lose tax benefits.

6) To directly answer one of your questions...Get insurance, it is very inexpensive and will help you sleep at night.

I am sure there is more, sorry this is so long, you just struck a cord with me as I just went through this and was surprised and frustrated by how little information is out there. I will also tell you that about six months into this, I absolutely love it. We use the property all the time, hunting, working, just being in the country it is all fun. I have a 10 yr old daughter and 11 yr old son, and this is just a great experience for them. We live in the city and I am really pleased that they are getting to experience a different way of life to some extent.

ttugmc, great post. thanks for all of your insight. this is a process I hope to experience soon.

You probably don't have anything to worry about. you'll probably be surprised about how close the appraisal comes into the selling price. Unless something is way off you should be fine. If it is way off, it is better that you find out up front.

Another thing you need to do is make sure you know who owns the property. In a lot of cases the land is in some kind of a trust or has several heirs with undivided interests. I say this because we leased 100 acres behind our place and then leased our farm and the 100 acres to a guy who worked the land. We cut three checks to the three owners. One day the family wanted to sell. We didnt buy it but and oil co. did and it turned out that there were 28 people that had an interest in the property. To avoid problems you need to have the abstract brought up to date. Abstracts show the ownership of the property going way back. When the abstract is updated then have an attorney review it to make sure everything is in order and you pay the right people.

Helomech, what is a veterans exemption?

I currently have a wildlife exemption and it seems to be no sweat. It just rolls from one year to the next. However, others have posted that they have to have annual plans that are big PITA's. I assume that each County can do what they want with their taxing authority. If I could change to some kind of veterans exemption, that wouldn't change (assuming again) from year to year.

The biggest factors on buying land are the ag exemption which you have to immediately continue or face huge taxes, NEIGHBORS, access, mineral rights, finances, etc.

If you're just looking for a place to hunt, leasing is usually a lot cheaper. I've often said that if I wasn't a landowner I could afford to hunt Africa and take guided fishing trips at the lakes of my choice.

Regarding land ownership, you will often hear that they aren't making anymore of it. They don't need to. There was a lot of it made in the beginning and it's still out there. And, right now, it's tough to sell. Not a lot of potential buyers have the credit rating, down payment or disposable income to buy anything used for recreational property.

If you are a disable veteran than you qualify, just bring your disabled veteran paperwork to the county tax office, and it is in addition to other exemptions. You don't have to pick one.

Looks like I may have a done deal. Just waiting on the final survey to split the property up so I can get my 65 acres. This is for recreational duck hunting land. 55 acres in bottom wetlands and 10 acres up top for a cabin later on. If you can qualify, rates and terms are really good right now.
Should be closing Dec. 1st.

Awesome, congrats to you. Hope everything goes smooth.

I just went through all this several months ago. What I learned:

I found a better rate and terms at a local bank than at the federal land bank (agcredit.com). Also was able to get a 15% down payment instead of 20, and the loan is fixed for 5 years and then re-negotiated. I used Jacksboro National Bank.
Insurance is not required without structures, but I took out a 1 million $ liability policy in case some yahoo sneaks in and hurts himself and tries to sue me. It's only about 130$ a year through Farm Bureau.
Electricity and water can be expensive. I'm in the situation someone mentioned above. I can pay 18k$ to run a line from the closest municipality, but that can't happen because they are at capacity. So it's water well time. Drilling a test well is 8$ per foot with a 70' minimum. That will be happening soon.
The AG exemption is worth it. My 115 acres is 180$ per year property taxes with it, 1800$ without it. If you lose an AG exemption, it can take 5 years to get it back according to the Appraisal District folks.
Talk to the locals before you buy. Nothing worse than finally finding a place you really want and then finding out they are getting ready to put in a motocross track next door (believe me, it happens).
You will hemorrhage money when you buy your own place, but it will be for YOU. No more worrying about losing the lease, etc.

have you tried getting a well witcher to find your ideal well location.

i know some dont believe in it, but i grew up watching my dad find water line after water line with a set of copper witches...

on my place, i walked around with the witcher for 30 minutes watching him do his thing. he marked spot after spot and then stopped the witching and went back and triangulated the two best spots where the water tables crossed or where the water source was strongest.

we drilled on that spot and got a nice flowing well out of it.
it was almost 300 feet down to get to water, but it has been a strong well so far.

that was only $200 for his services. he has since done around 10 other wells on the ranch with no "dry wells"

Hunter_Man,
I want to thank you for this thread and I want to thank everybody that has commented.
I have often wondered about every single issue brought up on this thread.
I will be creating a file just for this...
So, when the day comes...I'll have a good idea of the direction to go in.

Oh, one question...what are the qualifications for Ag exempt?

What type of closing costs do you hae to pay for this type deal? Just got my wife's support to buy land instead of leasing.

congrats texas_sooner! I got my wife's support a few months ago too so we are in the process of getting financially "ready" for this. We will need between $4000-$10,000 just for a down payment. Keep us posted on your progress, this will be a fun thread to watch!

Rates won't be great because of the risk associated with land loans that are not within a city's limits. Most Banks won't give more than 80% of the appraised value. From the Bank's point of view, if the loan defaults, what is their ability to collect the loan proceeds through liquidation of the collateral (the land).

thanks dr730. When I mentioned buying our own land, and she said she liked the idea, I spent half the work day looking through websites selling land. Funny how these things change spending priorities. I was looking at a new truck for next year, but now I'll gladly keep my paid off Silverado another few years.

I know exactly what you mean. I'm not even leasing this year in an effort to try to get to where we can actually do this. I'm gonna drive my silverado until the wheels fall off, and then fix it and keep driving it some more! AND, we are gonna stay in our little house instead of getting a bigger place. Priorities! LOL.

You got to have total buy in from the spouse becuase you think you spend a lot of time at the lease. Wait until you own the land and you just want to "go check on it". I took my wife around to see about 4 to 5 properties over the last 6 months. The only property she was happy with was the one that was only 45 minutes away from the house. It was great for me because this was also a place I have hunted for 4 years and know very well already.
The biggest hurdle for most people is the down payment. I'm not sure where the $4,000 to $10,000 came from as stated before you are going to need 20% of the appraised value (so hopefully the appraisal will be same or more as the purchase price). So if you are looking at a small peice of property for $100,000 (on the cheap end) you will need $20,000 just for the down payment. Your closing costs will be anywhere from $2,000 to $4,000.
I'm just very happy that God has given us the opportunity to do this without having to go into debt.