Questions about Buying Texas Land; location, finances, water

Hello there,

So after much waiting and working we think we might able to put a down payment on a piece of land at the end of next year. We have so many different questions.

Purchasing:

Should we just put %20 percent down and just chip away at the mortgage as fast as we can by working in the city or wait till we can buy the land flat out cash. No monthly payments will allow greater freedom. The downside is that it will probably take 4-6 years and by that time who knows what state of mind we will be.

The game plan right now is to either buy acreage 1 hour from Austin (more expensive per acre, less rainfall, proximity to affluent markets), Deep north east Texas (three times as cheaper per acre, way more rainfall, impoverished and depressed area - far from markets) or cherry pick the most water secure area in a more water affluent state (unfamiliar with options, I would assume the south east).

My biggest fear is the water situation; Central Texas is having major droughts (last year was Texas' worst rainfall in history). We could possibly try going north east to deep East Texas, which has better rainfall but is about 5.5 hours from Austin, meaning we could work on our land less frequently while living in Austin. But even deep east Texas could prove not to be water secure in 10-20 years as everyone tapping into the same water tables, desertification is creeping upward the us. I really like the south east weather and growing zones.

1 hour from Austin - Acreage as low as $6000 an acre.
5.5 hours from Austin (deep east Texas) - Acreage as low as $2000 an acre.

I realize that there are many added expenses to make a bare piece of land useable.

We are looking into buying 10-15 acres.

Possible Goals:
50 person CSA
1-2 acres mixed edible forest
1-5 acres orchards (figs, pomegranates, pecans, persimmons, black berries)

My dream scenario is buying a bare piece of land and slowly improving it by using funds from the city job for fences, water well, various infrastructure and etc. As the land matures some and income possibilities expand we will start spending more time on the land and less in the city until the ratio is reversed and we spend the majority of the time on our land.

My girl and I wwoofed a bunch, started our own farmer's market booths from scratch, we are aware of many of the challenges (financially) that we could face. We returned back to the city just for the purpose of saving money for land. Yet as longer and longer we stay here I feel we drift away from that dream and get tangled up in city life and its money spending lures. I think if we will have a concrete plan with dollar figures attached to them we could maintain the "flame".

So friends,

What would you do? What location?
What other components should I consider?
What was the best/worst thing you have done when buying your own land?
Any book recommendation about land purchasing? I am about to order "Mortgage Free!" and "Finding & Buying Your Place in the Country". Any other recommendations?
Any general nuggets of wisdom?

Thanks in advance for any input,
Have a wonderful day

I don't know much about the money stuff, but I do think that the location is very important. If you're closer to a city then you have a much bigger potential market, not to mention petroleum saved in the transportation, extra resources via wastes (wood chips, leaves, grass clippings, building materials ect) ect ect so I would go closer to Austin or some other city if I were you.

Isaac Hill wrote:I don't know much about the money stuff, but I do think that the location is very important. If you're closer to a city then you have a much bigger potential market, not to mention petroleum saved in the transportation, extra resources via wastes (wood chips, leaves, grass clippings, building materials ect) ect ect so I would go closer to Austin or some other city if I were you.

Even in the dire water situation? It will probably get worse with time.

For a 50 person CSA I would figure on about 1 acre of irrigated land...but you might already know that. I would also try to stay a bit closer to Austin. However, I've never done any of the things you are talking about except I do work for an urban CSA that farms big back yards. Also, the north west and parts of the mid west are all relatively water secure. Good luck!

Salinger7 McCoy wrote:
What other components should I consider?

Beware of any areas with oil or gas drilling. These can contaminate groundwater. This is something which could be avoided through permacultural design for rainwater harvesting but not if you're depending on a well for irrigating.

What was the best/worst thing you have done when buying your own land?

The worst thing we did was ask a lawyer if we should buy this land, he told us "no," we ignored him and went ahead and bought this extremely challenging piece of land, which if we accept the permaculture concept "the problem is the solution" is a blessing in disguise. Asking the lawyer was a waste of money. Can't remember why we thought that was a good idea at the time.

Any book recommendation about land purchasing? I am about to order "Mortgage Free!" and "Finding & Buying Your Place in the Country". Any other recommendations?
Any general nuggets of wisdom?

A permaculture design book such as the "Designers Manual" so as you look at parcels you can think about how to place your house and other features in the landscape.

Try to look for a place with potential for water harvesting earthworks, such as some sloping land, maybe a seasonal creek. Avoid land which has the potential to flood catastrophically (that's our problem, extreme flooding)

Forgot to mention we bought our land for cash and I would personally advise against buying land on a mortgage.


I keep thinking of more things to say: Regarding location, move to a place where you think you might feel comfortable, either it is beautiful to you, has nostalgic associations, you like the people, have relatives there, something besides just "it's cheap." Moving to the country can be stressful enough without it being a place you don't like much. If you're used to doing city things, like a social life, don't move so far away that you never have a social life again. Local prevailing politics might be somewhat important, depending on how political you are.

Tyler Ludens wrote:

Salinger7 McCoy wrote:
What other components should I consider?

Beware of any areas with oil or gas drilling. These can contaminate groundwater. This is something which could be avoided through permacultural design for rainwater harvesting but not if you're depending on a well for irrigating.

What was the best/worst thing you have done when buying your own land?

The worst thing we did was ask a lawyer if we should buy this land, he told us "no," we ignored him and went ahead and bought this extremely challenging piece of land, which if we accept the permaculture concept "the problem is the solution" is a blessing in disguise. Asking the lawyer was a waste of money. Can't remember why we thought that was a good idea at the time.

Any book recommendation about land purchasing? I am about to order "Mortgage Free!" and "Finding & Buying Your Place in the Country". Any other recommendations?
Any general nuggets of wisdom?

A permaculture design book such as the "Designers Manual" so as you look at parcels you can think about how to place your house and other features in the landscape.

Try to look for a place with potential for water harvesting earthworks, such as some sloping land, maybe a seasonal creek. Avoid land which has the potential to flood catastrophically (that's our problem, extreme flooding)

Forgot to mention we bought our land for cash and I would personally advise against buying land on a mortgage.


I keep thinking of more things to say: Regarding location, move to a place where you think you might feel comfortable, either it is beautiful to you, has nostalgic associations, you like the people, have relatives there, something besides just "it's cheap." Moving to the country can be stressful enough without it being a place you don't like much. If you're used to doing city things, like a social life, don't move so far away that you never have a social life again. Local prevailing politics might be somewhat important, depending on how political you are.

Thanks Tyler. Where are you located? Would love to see your place and talk with you some more.

I'm 110 miles or so southwest of Austin.

Florida has much lower property taxes and much higher and consistent rainfall. We have large markets. We can grow a lot more things and have a year-round growing climate. Land is cheap. Since interest rates are historically low, it makes sense to borrow.

A friend of mine bought land on credit and because he already has a loan on his land, can't get another loan to build a house. Now he is stuck paying for land he can't live on.

Credit is like everything except compost tea- best in moderation.

Yep. We weren't able to get a loan to purchase land (can't remember why, something about the size parcel we wanted) so we paid cash for the land and got a mortgage for the house. But the mortgage market has changed a lot since then, I think.

As far as the lawyer, I think you want one to review the title, deed, and land history for you unless and advise you of the issues with it unless you are comfortable making that assessment yourself. You don't want to buy something and find out that the mineral rights are owned by somebody else, that the oil company has an easement through your land, or there's a mechanic's lien against the property.

Property taxes are something to think about, vs other locations. I understand Texas is on the high side.

Personally, I would not choose an arid climate unless compelled by other factors (eg proximity to family). Farming is really hard work. Why add in drought if you have an option?

Debt - interest rates are low. Talk to your local Ag Credit lender to learn your options, esp. about buying land and building vs buying land with an existing homestead. There are various programs such as new farmer and under 35 farmer. Plus, I'd throw out there that if you decide to work in the city and start the farm on the side, its perfectly ok to have a mobile home on the property initially.

Utilities - are you going to be on the grid? It can cost a chunck of change to get electricity to a remote property.

Fuel - if you have to drive 1 hr each way to get product to market, how will fuel prices effect you? Do you have an alt source (home ethanol or biodiesal production)? Salatin says 4 hrs drive is the max for customers, btw.

I am looking at land now and will end up buying in eastern Alabama. That's where I grew up, it gets plenty of rain, has a long growing season, and has two large cities (Atlanta and Birmingham) within 2 hrs. Land prices in the Deep South are depressed b/c so much land is devoted to pine production, and the bottom fell out of timber pine prices when the housing market collapsed. I can buy for $1800/acre with $300-500/acre standing pine. I'll sell off a few acres of pine per year then convert that land into savanna food forest.

Great plan to homestead in Alabama. Very low property taxes there too. War eagle!

J D Horn wrote:You don't want to buy something and find out that the mineral rights are owned by somebody else,

In Texas, mineral rights are almost always owned by somebody else. Title search can be done by a title company for a fraction of the cost of a lawyer.

If I were moving, I'd move to Florida, because my husband has family there and the reasons Nick gives. Texas has high property taxes and land is overpriced.

Tyler Ludens wrote:A friend of mine bought land on credit and because he already has a loan on his land, can't get another loan to build a house. Now he is stuck paying for land he can't live on.

Getting a home loan on a large parcel is hard to impossible regardless of who holds the deed to the land. I had to subdivide my own land to get a mortgage because no home mortgage would attach to more than 10 acres.

If I had it to do over, I would not have built the house on a note. Land, maybe--depending on the deal. But the house would be built on cash.

We were able to get a home loan in spite of owning 20 acres, but that was over a decade ago. Things may have changed.

Nick Garbarino wrote:Great plan to homestead in Alabama. Very low property taxes there too. War eagle!

Roll Tide Roll!

But if I make a go of this I'm sure I'll be working some with the good ag folks at AUbarn, and teaching them how to leave their chemical farming ways behind!

R Scott wrote:Getting a home loan on a large parcel is hard to impossible regardless of who holds the deed to the land. I had to subdivide my own land to get a mortgage because no home mortgage would attach to more than 10 acres.

Did y'all try to work with someone in the Farm Credit Network?
http://www.farmcreditnetwork.com/

"The Farm Credit System is a nationwide network of borrower-owned lending institutions and specialized service organizations. Farm Credit provides more than $174 billion in loans, leases, and related services to farmers, ranchers, rural homeowners, aquatic producers, timber harvesters, agribusinesses, and agricultural and rural utility cooperatives.

Congress established the System in 1916 to provide a reliable source of credit for the nation's farmers and ranchers. Today, the System provides more than one-third of the credit needed by those who live and work in rural America.

Farmers, ranchers, agribusiness, rural homeowners and rural utilities depend on the Farm Credit System’s funding and services to produce the high quality food and agricultural products enjoyed in the United States and around the globe.

The Farm Credit mission is to provide a reliable source of credit for American agriculture by making loans to qualified borrowers at competitive rates and providing insurance and related services."

The farm legistation has specifically created programs for young and beginning farmers in the Farm Credit System.
As an example,
http://www.alabamalandloan.com/young-beginning-farmers.aspx

You cannot go to a conventional lender b/c Fannie Mae/Freddie Mac will not buy a mortgage on more than 10 acres, and that may be down to 5 now.

But the GSE for the Farm Credit System, called FarmerMac, does not have that restriction.

I forgot to mention our loan was through the builder, so that may be an option if you choose not to personally build your home, but have it built. We picked ours from a catalog....

I think about this stuff a lot - though we are fairly committed at this point to the land we have, at least for the next 5-10 years. Here are things I consider...

Priority #1: I would have to say family/community is the highest consideration. Permaculture techniques will allow lots of flexibility in other factors (even water, which is #2), but what happens to your project if one of you gets hurt? The first rule of resilience is redundancy - if I had a blank canvas to paint my perfect permaculture project, I would get at least a few households together who shared my goals.

Priority #2: Water. I agree with the concerns about groundwater contamination. In addition to coal, oil, and natural gas, be aware of nuclear power plants or processing facilities. A friend of mine spent over 30 years pouring his heart and soul into his land, only to find out that the adjacent river and pond were contaminated by plutonium from a nearby nuclear fuel processing facility.

Other stuff that is all important:

Location with respect to cities, markets for goods produced, other friends and family, and hopefully someplace with the least regulations and restrictions, awesome neighbors are priceless and bad ones can make your life a living hell.

Affordability, getting as much land as you can manage, including a fair amount for Zone 4 and 5 for forestry and habitat.

Geography (I love hills and mountains, not fond of my central VA coastal plains), climate, etc.

Helpful features on land, trees, buildings.

Almost 20 years ago I (and my ex) were buying a gorgeous 40 acres in SE Ohio for $200/acre. I kick myself for giving it up sometimes.

Three years back my current husband and I started looking for something to settle down on. We traveled across country and camped on federal lands for about a year. I fell in love with Georgia despite not being used to humidity anymore, but it was way too far from anyone we knew.

We both fell in love with the globe area of az but quickly discovered it was way out of our budget. We ended up settling in an area that's cheap and close to family. Near tucson, which makes things difficult because of the heat and lack of water.

Our priorities were cost, zoning and proximity to family. Tucson has been "home" of sorts for about 15 years so it made sense. We did choose a rough path though. We bought the land in march 2010 and we're still working on getting a well. We also can't go anywhere when it rains. I work from home online tho so access to town is not critical. We go a couple times a month.

Mistakes are numerous but not related to acquisition and location that I can think of (i.e planting food without fences )

J D Horn wrote:

R Scott wrote:Getting a home loan on a large parcel is hard to impossible regardless of who holds the deed to the land. I had to subdivide my own land to get a mortgage because no home mortgage would attach to more than 10 acres.

Did y'all try to work with someone in the Farm Credit Network?
http://www.farmcreditnetwork.com/

"The Farm Credit System is a nationwide network of borrower-owned lending institutions and specialized service organizations. Farm Credit provides more than $174 billion in loans, leases, and related services to farmers, ranchers, rural homeowners, aquatic producers, timber harvesters, agribusinesses, and agricultural and rural utility cooperatives.

Congress established the System in 1916 to provide a reliable source of credit for the nation's farmers and ranchers. Today, the System provides more than one-third of the credit needed by those who live and work in rural America.

Farmers, ranchers, agribusiness, rural homeowners and rural utilities depend on the Farm Credit System’s funding and services to produce the high quality food and agricultural products enjoyed in the United States and around the globe.

The Farm Credit mission is to provide a reliable source of credit for American agriculture by making loans to qualified borrowers at competitive rates and providing insurance and related services."

The farm legistation has specifically created programs for young and beginning farmers in the Farm Credit System.
As an example,
http://www.alabamalandloan.com/young-beginning-farmers.aspx

You cannot go to a conventional lender b/c Fannie Mae/Freddie Mac will not buy a mortgage on more than 10 acres, and that may be down to 5 now.

But the GSE for the Farm Credit System, called FarmerMac, does not have that restriction.

Yeah. At the time (before the housing bubble/crash), you could get financing for an existing house and ag land through farmermac, but you couldn't buy land and build a house. I can't remember if it was completely impossible or just a PITA that was logistically impossible because of comp's and loan conversions.

Salinger7 McCoy wrote:Should we just put %20 percent down and just chip away at the mortgage as fast as we can by working in the city or wait till we can buy the land flat out cash. No monthly payments will allow greater freedom. The downside is that it will probably take 4-6 years and by that time who knows what state of mind we will be.

Yes. Paying a mortgage for your own land is far better than paying someone else's mortgage for them (renting). Live frugally and put everything you can towards paying it off as fast as possible. However, keep aside several thousand dollars for emergency times and know that you're also going to need to invest in infrastructure, tools, equipment, seed, etc.

Salinger7 McCoy wrote:My biggest fear is the water situation

Water is key. No water, no buyie.

Salinger7 McCoy wrote:We are looking into buying 10-15 acres.
Possible Goals:
50 person CSA
1-2 acres mixed edible forest
1-5 acres orchards (figs, pomegranates, pecans, persimmons, black berries)

All reasonable things to do on that much land. Add some livestock to the mix and they help with weeding, fertilizing, organic pest control and provide meat and other things.

Salinger7 McCoy wrote:What would you do? What location?

I wouldn't buy in Texas but that is just me.

Salinger7 McCoy wrote:What other components should I consider?

Solar orientation
Water
Soils
Wind
Distance to markets

Salinger7 McCoy wrote:What was the best/worst thing you have done when buying your own land?

I had a beautiful property with awful neighbors. I sold it (hard decision) and bought other property (very good decision). No need to live next door to nasty people.

When considering land I checked the zoning, easements and all those sorts of things. Make sure you own everything you need on the land. e.g., water and mineral rights... Don't be surprised. Know what you're going into.

Cheers,

-Walter Jeffries
Sugar Mountain Farm
Pastured Pigs, Sheep & Kids
in the mountains of Vermont
Read about our on-farm butcher shop project:
http://SugarMtnFarm.com/butchershop

I have 18 acres of land in Delta County Texas, I've been told that if I sell it, the people that would buy it cannot farm on it for 7 years which would make it very hard to sell. Is this law true?

Howdy Kelly, did someone in a government office tell you that? Why would there be such a law?

I was told this by the real estate agent who is selling the land. This law might have kicked in January 1 2013. I'm not sure. The small piece of land we had was sold last year. This is the difficult piece of land to sell. 18 acres.