Buying lake property 101

[B420]

CC,

What county are you looking in?

[BoxMN]

There are still plenty of very good and yes even great lots that don't have cabins/homes on them yet, on many lakes and rivers in the state. If you love the lake, you are half way there. 100' shoreline is about as common as it gets, so it is plenty. Ours is 100' shore x 300' deep and it is fine. Of course would like more, but you see folks with 75 and 80' doing fine too.

Since it will be split, I would assume that an official survey has been done and markers are in the ground already. If not, just put contingency on seller having survey done with markers laid, and you will be fine.

In time, you will find what you want based upon the land you have, and build/use accordingly. And you will like it Key thing is location, location, location - sounds like you like the location, and if the price works (and you can afford it, of course...) go for it.

Also, taxes are NOT based upon how much shoreline you have, or even how big your lot is - it is strictly based upon the value of the home/lot, and being on a lake simply makes it more valuable. While your place is simply a "lot" your taxes will be incredibly low. Once you build/improve it will go up. I gotta say, I thought my cabin taxes were going to be much more than what I am paying, but I don't have a real big place. Went from 400' shed ($800 taxes) to keeping said shed and adding 1200' (and 1200' unfinished walkout) cabin with 28x28 attached garage and taxes are about $23xx. That is about what my small place in WBL taxes are.

Rates are still on your side. What I found when we bought the "lot" was that twin cities banks would not touch it, but when I talked to a local bank, the banker knew the lake, the lot, ran credit, said I was getting a good price, and just said "when you want the money, let me know..." I never even met him, did all thru the mail. But since it was lot, it was a 3 year revolving loan with higher interest than home mortgage. Once we built (about 8 years later, and then refi'ed after construction loan) we have normal mortgage at 3.5%. Point being, local banks might be able to help you out even with land loans.

Anyway, good luck. I don't regret one bit getting the cabin, and if the carp hits the fan financially for some reason, it will be the "house" we sell not the cabin

[Tom7227]

I called the county and they said he could not sell this parcel and the county wouldn't approve of the split (he is splitting his parcel and selling half) UNLESS it was buildable. With that said, whats buildable....500sq/ft house, 800 sq/ft house, with garage, no garage, deck, no deck...

I think that "what's buildable" means zoning and building code sorts of things - setback from the water, wetland, bluff, would it likely pass a perk test. The list could go on and on. I don't think it relates at all to what you put up. There may be restrictions on what you can build but first it has to be determined if it is a buildable lot.

How long has the seller been trying to sell it? Can he give you an idea of what he thinks 'buildable' means? Is there a realtor involved and can that person help get it certified as buildable? You may have to go to the county and wander around for a few hours trying to get the answer yourself. DO NOT take the word of the seller as the correct answer - check it out yourself.

I suspect that some counties are tougher to satisfy than others. For instance Crow Wing County was soundly beat up in a series done by the Star Tribune about a year ago. That may, or may not, have caused them to tighten things up.

IF YOU GO AHEAD - get a lawyer involved or at least a good real estate agent and make sure that the entire deal is contingent on the approval of the property as buildable. I suspect even the mortgage company may have a say in what they will give out a loan on and have to prove that it is buildable.

[magicstix]

Another thing I'd like to add is building is fun cause you get your dream place but I think I'd keep my open for already built places that people need to or really want to sell.

Example there was a place a few doors down that went up for sale last year everyone knew it was coming so we watching just for curiosity of price and value. 10yr old rambler full finished basement, 4br., 2 car attached, perm ice house, dock, and boat lift. When listed price was very reasonable. We keep an eye on the listing for fun. Then the price started to drop a little here and there, then one week it took a huge drop. I told the wife we needed to buy that[don't why I'd want 2 places on same lake], I was calling family and friends and anyone that ever said they'd like a lake place and to get moving on it. Excuses were well we'd like to see, too far away[5hrs.] etc.

It only lasted a week and was sold. We've gone down and met the new neighbors[glad they bought it], very nice family w/ 2 teenage boys and 1 girl. They bought it because of there realtor said hey the price just dropped on this place and you should look at it. Was not even close to the area they wanted to be but after looking at pictures made the drive that night to look at it and said yes. I think I can safely say that place sold for less than what most of are regular homes are worth.

My point is maybe it doesn't hurt to keep an open mind and eyes.

After seeing this deal, I'd definetly try to buy this way in the future.

[Tom7227]

I suppose that a big part of the consideration in whether to buy an existing cabin or start from scratch has to do with the desire to build up some sweat equity. That can be understood. But the trade offs can be substantial. First IMO is the risks that are run when dealing with bare land. Zoning issues would be at the top of my list followed quickly by the ability to get utilities in place. Running electric service, putting in a well and septic or sewer could easily run into tens of thousands of dollars, assuming that water and septic would even be available.

Unless you are extremely handy you are then faced with the prospect of finding contractors to do things like prep the land, dig a basement if you are going to have one, do the block work and pour the slab. The list is pretty straightforward, but the real issue is can you find reliable people to do the work. No offense to any tradesman who works in lake country but friends have had some pretty bad experiences with no shows and shoddy work. If your a hundred miles away it's tough to keep tabs on things.

Then consider the cost in time to get the sweat equity. Again, you're going to have to travel some time to get there and most likely haul tools and equipment back and forth. Then you're going to work full tilt to try and get as much done as possible in the 2 or 3 days you have. Is that how you want to spend your weekends for the next year, or even longer.

Not trying to discourage anyone, just trying to put a realistic spin on things.

[Ufatz]

Tom speaks truth. Let me tell you. Bare land small home project. First $7000 for surveying. Then shoreline management comes in and TELLS you where you will put house. Then perc test ($1500) followed by well $2500)

Next comes big septic tank, dig it in and fill it and run lines to drain field; $3000.

Want a full basement? figure $20,000. Power lines run in (?) and small road built (?) Then ya gotta have a $3000 dock, nice power mower and weed whacker. Gonna go with sod for the first yard....several thousand. Nice rock fireplace?...$2500.

Money left over to build dreamhouse?....$4500.

Have a ball daddy Warbucks. Oh....and then $4-5000 a year in taxes.

But HEY!......its a place at the lake!

[Lip_Ripper Guy]

Lots of good advice in here, but the best post is the one "if you take all this advice you'll be 90 and wishing you'd done something". Here is some advice I can offer up being in the industry:

1) Financing-These days you are probably looking at 20-25% down on a 2nd/vacation home. Home equity lines are a really good option, and offer you the most flexibility (you are essentially paying cash). Get your financing figured out before you start anything.

2) Empty lots-There is probably a reason for this. Do your due diligence on all the things mentioned in this post already. The majority of the lots I've been seeing have FEMA, Bluff, or septic challenges.

3) Find a good Realtor-If I were buying property 3+ hours away, I'd pick a reputable agent in the area, look at 10 places with them in a day to communicate exactly what I want/don't want, and then let them go to work. Have them preview new listings for you, and send you their thoughts. This will save you and them a ton of time. As an agent I can go through a house in 10 minutes, upload 50 (un-Photoshopped!) pictures, get a good feel for it and communicate a good report on it to the client. No need for you to spend 6 hours on the road to find out it won't work for you within the first 30 seconds.

4) Inspections-Even if you think you are the worlds best DIY'er, get a professional inspection on the structure, as well as well and septic. When you walk in the door and the wife does the "honey...it's perfect..." you are probably going to overlook some things. The devil is in the details, and the $400 inspection could save you years of headaches. Like my neighbor who didn't catch the fact that his windows weren't flashed properly and had to tear out an entire wall.... Your bank will very likely require to you have the well & septic certified, but do this even if they don't.

5) Meet the neighbors-If you like to enjoy a book in complete silence while listening to loons at night, but the 10 neighbors around you gather for a fire and cocktails until 2am every night, it probably won't be a pleasant experience.

Good luck!

[MuskieJunkie]

On the topic of property taxes: MN charges a higher rate for seasonal rec property than a homestead property so don't go off what the current taxes are (unless it's already classified as seasonal rec), find out what they would be when it get's classified as seasonal rec. Your real estate agent should have a very good idea of what typical taxes are for a specific value, if they don't I'd question their merit.

Septic has come up a few times, I do not personally have any experience with this but I can say almost all the people I know that buy cabins have got burnt with expensive sewer/septic bills shortly after.

[NEANGLER]

We are looking at houses on lakes right now since we are moving and the septic would be the big one to look at. Regulations are changing and the type of septic you put in is more expensive or going to a community one IE Roberds. They are going to have to go to the new system in '14 so the cost is $20k, you can apply for the grant which is $10k but still out another $10k. And make sure to get it inspected, as amny will not pass and that screws up your purchase.

Taxes have seemed to vary for area to area or even to specific lakes but we are have since Neb is so high we are going to cut our taxes in half and live on the lake. I would also get a survey done since we are finding out many were downYEARS ago and are way off.

As for agents they are not all the same, we have found that out- we went to a new person now who specializes in lake properties in the area we are looking at and it is a big difference. More organized, knows regulations, set backs, which ones to stay off of, etc. As suggested you may want to look for already existing cabins since the hard and expensive work has been done, take it for someone who knows, unexpected costs come from everywhere which the affects your budget and building what you want. There are some deals out there especially if you are handy and don't mind the work.

[ClownColor]

CC,

What county are you looking in?

Cass County

[deerminator]

I second the Inspections suggestion by Lip Ripper. But make sure the inspector is a real hard butt. Meaning, they are looking for anything and everything. Our new neighbors just lost their entire roof to the storm this past weekend and have major water damage. I watched the previous neighbor roll out and nail gun down the cheapo roof right over the old set of shingles while he was getting ready to sell the place. Not sure if you need a permit in our county but I know for a fact he didn't obtain one. And now they're pretty much out of luck for the first summer they had planned to spend at the place, if they don't have to rebuild entirely, which is a real possibility.