Lending rates

Twodogs · #1 08-26-2012, 06:08 PM

Got a question folks. With property lending rates at an all time low, would it be smarter to pay cash, or get a loan, and keep the cash invested? I just got a great deal on a 1.7 acre lot that connects to my property and it too has lake front. Seven years ago, this would have sold for around 175k, but I got it for a cool 56k.

I just can't decide whether to pay cash, or finance it. The rates for land only are higher than home loans, so it might cost me 5% or so to finance, and I don't think I've had an investment return that high for awhile. However, things could change, and investment opportunities could get significantly better. I'm torn. The other thing is, if we pay cash, the wife will pay for it, and if we finance I will get the payment book I'm sure. I know they say real estate is a terrible investment right now, but I'm not so sure. I feel confident that this property will go back up in value when home building comes back. It has water, gas, and will have sewer in 2 years. I guess like a lot of folks, I want at least a few investments that I can touch with my hands (gold) or set foot on (land). Another option might be to get a home mortgage and build a small "home" on it, to get down in the 3.5-4 area. I'm mainly buying it because it's the only piece of land left on this Lake Road that's build-able, and I don't want a family with kids or something buying it. The three homes on my road now are all adult owned and occupied (no kids). So, whatcha think fellas? If it makes a difference, I don't have a mortgage now.

Rex E. · #2 08-26-2012, 06:19 PM

Whatcha got against kids? Couldn't be worse than the bomb making neighbors

Twodogs · #3 08-26-2012, 06:29 PM

Quote:

Originally Posted by Rex E.

Whatcha got against kids? Couldn't be worse than the bomb making neighbors

Hey that dude blew his brains out with a 12 gauge last winter. I ended up with a 700 dollar Lab out of the deal. I never knew the dude had issues, but he borrowed some magnum turkey loads from me one day (he was a dove and quail hunter and only had low brass stuff), and that Friday night, blamo. Bad JuJu in the neighborhood man. Guys wife was right in the next room and had to step over his body to get the phone to call 911.

The land I'm talking about is that big chunk on the left as you drive down my rode.

BTW, I love kids, as long as they are somewhere else.

bobabode · #4 08-26-2012, 06:29 PM

I assume building costs,(materials & labor) are at an all time low in your area. Money is cheap but going up. They've been stagnant pretty much here. If you can afford to sit on the investment i.e. build and rent the property, you'll make a goodly amount more than buying munis or other investments I would guess but shit I need to take my shoes off to do higher math so don't take any advice from me. Dagnabit, I need vocational re-training! I forgot how to tie up my Redwing STs...

Rex E. · #5 08-26-2012, 06:31 PM

Quote:

Originally Posted by Twodogs

Hey that dude blew his brains out with a 12 gauge last winter. I ended up with a 700 dollar Lab out of the deal. I never knew the dude had issues, but he borrowed some magnum turkey loads from me one day (he was a dove and quail hunter and only had low brass stuff), and that Friday night, blamo. Bad JuJu in the neighborhood man. Guys wife was right in the next room and had to step over his body to get the phone to call 911.

The land I'm talking about is that big chunk on the left as you drive down my rode.

BTW, I love kids, as long as they are somewhere else.

Ah, I didn't know it was that guy that was making those bombs that were going off at 3-4am

What does the wife think? I'd say buy it outright that way no loan in case summin goes south for ya. On the flip side if summin goes south you have land but are out $56K in reserves. tough one.....

Twodogs · #6 08-26-2012, 06:35 PM

Quote:

Originally Posted by bobabode

I assume building costs,(materials & labor) are at an all time low in your area. Money is cheap but going up. They've been stagnant pretty much here. If you can afford to sit on the investment i.e. build and rent the property, you'll make a goodly amount more than buying munis or other investments I would guess but shit I need to take my shoes off to do higher math so don't take any advice from me. Dagnabit, I need vocational re-training! I forgot how to tie up my Redwing STs...

Speaking of building something, my Paw in Law is getting up in years and having a hard time taking care of his huge house and 75 acres, what with all the traveling he does. Sue thought maybe we could build him and his wife a little one level home with a double garage where he and I could hang out and do some gunsmithing and stuff. He worked for Winchester before he started his own printing company years ago. I think he's 78 now, and his land will surely be sold and monies divided when the time comes.

I've killed a lot of deer and turkey up there and have lots of good memories of him and I hunting.

Rex E. · #7 08-26-2012, 06:45 PM

Quote:

Originally Posted by Twodogs

Speaking of building something, my Paw in Law is getting up in years and having a hard time taking care of his huge house and 75 acres, what with all the traveling he does. Sue thought maybe we could build him and his wife a little one level home with a double garage where he and I could hang out and do some gunsmithing and stuff. He worked for Winchester before he started his own printing company years ago. I think he's 78 now, and his land will surely be sold and monies divided when the time comes.

I've killed a lot of deer and turkey up there and have lots of good memories of him and I hunting.

Same age as my dad. Course I have sisters in your and the little womans age bracket

Twodogs · #8 08-26-2012, 06:51 PM

Quote:

Originally Posted by Rex E.

Same age as my dad. Course I have sisters in your and the little womans age bracket

My Dad's 93, and drank, smoked, ate fired chicken 4 times a week, and generally raised hell for most of it. It gives me hope, ya know.

Boreas · #9 08-26-2012, 06:55 PM

If the mortgage rate is below the rate of inflation it's a no-brainer.

Also, whether you finance or pay cash would depend on what your cash is earning now.

Twodogs · #10 08-26-2012, 07:07 PM

Quote:

Originally Posted by Boreas

If the mortgage rate is below the rate of inflation it's a no-brainer.

Also, whether you finance or pay cash would depend on what your cash is earning now.

Unfortunately, like most everyone else, my cash is pretty worthless, but the election being so close sort of puts another variable in the equation.

Speaking of American cash, I was looking to buy some back up EL37s for my Fisher AZ80s today on epay, and found 5 NOS ones in GB. They were 150 each in GBP, and 270 dollars American! When did that happen? I nearly fainted.