http://www.RobertKing.net

70 Acre Farm and Home near Fayetteville, Alabama and Lay Lake in Talladega County.

Check out the Virtual Tour available below!

Beautiful farmhouse, shop building, pasture, timber, pond…wow! If you are looking for your quiet place in the country to farm, hunt, or just have room to stretch, you owe it to yourself to look at this one… It’s the kind of place that once you sit down on the porch, you don’t want to leave. Easy access to the southern side of Birmingham, AL. 1 hour to the Birmingham International Airport. Approx 25 Acres hay and pasture land with a good stand of bahaia. Great hay production for horses or cattle. Approx 45 acres in timberland. Mature mixed timber with several trails and openings. Pond on the SE corner of the property. The house has been completely remodeled with a keen eye towards original architecture and country living. Just right for a retired couple with 1 bedroom, and 1 bath. Open kitchen/dining/living area and lots of porch space! There are guest quarters at the shop building too! Shop is 30×60 with a concrete floor and is fully insulated. There’s an irrigated garden that is just beautiful, pecan trees, all types of fruit trees, and it still has the modern amenities too!  Listed at $399,000

Also there is a nearly new, New Holland tractor with front end loader, hay cutter, and another Allis Chamblers tractor with several pieces of equipment that can go with the property at $429,000. Great Opportunity!

MANY MORE DETAILS at the “FARM DETAILS” tab above.

The Kymulga Grist Mill and Bridge is listed on the National Register of Historic Places.  It is a historic site on Talladega Creek where it has stood for over 140 years.  There are trails, beautiful scenery, hiking, fishing, canoeing, the grist mill, and the covered bridge.   Guided tours are available.

Come on over to look at this land and home for sale. Bring the family and spend the rest of the day exploring these two attractions.

Kymulga Grist Mill – http://kymulgapark.tripod.com/
DeSoto Caverns – http://desotocavernspark.com/history.htm

Those beginning the process of purchasing land usually have a general idea of how they plan pay for the investment. However, I have seen many buyers change their method of funding because they became educated on an option that was previously unknown to them and offered them some distinct advantage. Some may simply not understand the process or what they can afford. Following is a brief explanation of the most commonly used methods to fund land transactions.

Cash – Most land transactions that I work with are cash transactions. This is not to say that I work with only the independently wealthy. Most people that pay cash for a property have recently sold some other type of investment and are simply moving that investment into a property that works better for them. Many investors prefer this method as it is the most hassle-free and gives the buyer a negotiating advantage—The general thought is that a cash offer is stronger and that because the terms of the offer are stronger, the investor can offer a lower price.

1031 Exchange – 1031 exchange, Like-kind exchange, Starker exchange, Tax-deferred exchange—all refer to a method of exchanging a property or properties for other similar properties without the realized capital gain being recognized as taxable by the IRS. This is only available to those who hold the property for a business purpose. In the past few years, this has become very popular with investors seeking to grow their investment portfolios without taking cash out. For example, if you sell a farm that you have operated in Texas, you can utilize a 1031 exchange to move that money into a timber property in Alabama. There are many special conditions that must be adhered to in order participate in a 1031 exchange. You should consult your attorney regarding a potential 1031 exchange prior to accepting an offer from someone to sell the property you will be selling in the exchange.

Home Equity – In most of the land deals that I work with, the buyer is purchasing a property that will not be, at least immediately, their primary residence. Most of these buyers also have signifigant equity in their current primary residence. A home equity loan on the buyer’s primary residence offers many advantages over a traditional land loan. First there are the tax benefits from using the interest on the loan on your income taxes. Also, when a buyer is using a home equity loan, that buyer can go through the loan process prior to making an offer. Since the buyer then knows how much money he or she has avialble for the purchase, they can make an offer as a cash offer, which strengthens the buyer’s postion in negotiations. Many times you can get more favorable terms on a home equity loan than on traditional land loans as well. It also makes your investment in land more liquid since to sell it, you will not have to then pay off a mortgage on it- so if the right opportunity comes along, you can liquidate your invesment and roll that money into whatever it is that you wanted…just like you had bought the property with cash. Most banks, credit unions, and mortgage brokers offer home equity loans.

Land Loans – Land loans are those loans that hold the land itself as collateral. Whereas many times you can buy a home with 5-10% downpayment, most times you will need 15-30% of the purchase price as downpayment to get a land loan. Land Loans typically have a slightly higher interest rate than you can get on a home equity loan or regular home mortgage, however, many institutions that specialize in land lending are becoming more competitive with the conventional home loan market. Local banks (local to the property) are a good source for land loans, as well as lending cooperatives like the Federal Land Bank, and the Farm Credit System. My experience with land loans is that you want to work with a lender that understands land and land issues. Most, not all, mortgage brokers and loan officers are not as experienced in land lending as are those that work for companies that specialize in that segment of the industry.

Owner Financing – Many times buyers and sellers find advantages in owner or seller financed transactions. This typically occurs by the buyer making a down payment to a seller on a property. The seller then conveys the property to the buyer, with the seller holding a mortgage on the property until the buyer pays the remainder of the amount due. Terms and conditions of owner-financed sales can vary greatly. In my experience, sellers usually want 15-20% down payment from the buyer and an interest rate that is slightly above what rates are in the conventional markets. Repayment terms can range from monthly payments over 30 years down to a single payments soon after the initial transaction. This must be worked out between the buyer and seller. It is important to note that not all sellers are willing or able to offer this option on a property. The buyer should be sure to perform the same due diligence that a lending institution would require to protect themselves from potential pitfalls in owner financed transactions. Owner financed sales are advantageous to some sellers because they can differ some of the income from the property and get a steady stream of income over time. Buyers benefit since most owner financed sales do not typically involve credit checks, origination fees, and the hassle of dealing with a lender.

Lease Purchase – Some properties are contracted for in a Lease/Purchase Option contract. In this type of arrangement, the buyer leases the property from the seller for an agreed upon timetable at the end of which the buyer can elect to buy the property or forfeit their money paid to the seller until that time. Sometimes these arrangements do not leave the buyer with an option to buy, but rather an obligation to buy at the end of the lease period. Typically, monies paid as rent and for the option are deducted from the purchase price, but this is not a requirement. In this type of arrangement, title to the property does not pass to the buyer until the end of the lease period, when the buyer exercises their option to purchase the property. Usually there is interest charged by the seller on the principal amount due during the lease period. It might be helpful to think of this as “Rent to own”. Again, not all sellers are willing or able to offer this arrangement. Also, it is important that the buyer performs sufficient due diligence in checking out the property, as well as the seller of the property, since the seller will retain title to the property during the lease period.

There are many other options for funding land transactions and are limited only by the creativity and the acceptance of the parties to the contract. Sometimes transactions are negotiated in broad strokes, sometimes deals worth hundreds of thousands of dollars hinge on something as small as who pays for inspecting the title to the property. One creative manner of funding a land transaction is through the use of your 401K funds or IRA funds…and you can do it without incurring Federal taxes for transferring the investment. I will examine that further in a later post.

This article is a good one for anyone begining to look and think about a land purchase. Lots of good information that many people do not think about until they are knee-deep in a transaction. If you are thinking about buying land or a farm for sale in Alabama, or anywhere else, this is a must-read.

Land: What is Land?
Land is everything beneath us. Land is a basis of wealth and is handed down through generations as a possession of great value. Land cloths us, feeds us, and provides for our homes. Land provides life for every living thing. Land has not been produced in millions of years yet it is so common. Land is the safest collateral.

Types of Land:
Land has many purposes. As a provider of food, you have agriculture land. For wood products, you have forest land. Mining land provides minerals and metals. Parks and Land Preserves provide habitat for all living things. Recreational land provides for human pleasures and exploration. Ranch and pasture land provides grazing for animals. Rural land provide for less dense living. Urban land supports commercial, home, and limited recreational usage.

Land as an investment:
There are many types of land investments. In fact, all land acquisitions are investments whether held for a short time or extended periods or even generations. Every real estate investment always starts with land whether you were involved with the land or are now involved with the bricks. ALL structures have a foundation on land.

Land is constantly increasing in value driven by the ever increasing world population. Population growth creates a constant demand for new development, more agriculture products, more timber, steal, oil, minerals, etc. But land that has the most demand is development land for homes, businesses, schools, recreation, and other population demands.

Learning how to identify these areas can be obtained by observation, inquiries, and knowledge of future growth patterns. Land development creates trends and trends can be followed. For example: new industry creates retail which creates housing. Watching where new industrial sites are being planned may help identify such land that may have future potential. Investing in land outside an urban area where new highways, infrastructure, and annexation, are planned could be an indicator of potentially higher land prices in the future. W.C Fields said: “If you know where the people are going, get there before they do”. The earlier you invest into land, the more you will be rewarded at a later time. Building good strategies and a little risk can be very rewarding. Do not forget your Land Pro contact. They will help make your investment decisions easier.

Land vs. Residential investments:
Buying an investment home can have a lot of strings attached. Rehabbing and workmanship issues, termites, radon gas, lead based paint, etc. (Now rented, tenants issues like fix this, sorry I am late on my rent and then try and get them out and hope they did not destroy the place.) What happens when the economy takes a severe downturn and you are unable to rent the property? Those mortgage payments are still due.

Land has no tenants, no maintenance, no complaints, only the pleasure of walking upon it and watching it grow in value. Waiting for that anticipated phone call when a developer says, “I want to buy your land!”

Land stabilizes in value during downturns in the economy. Residential development increases when interest rates decrease. Land also enjoys increases in value during an upward trend in the market, but when the market declines in real value and home values decline, land stabilizes. Land is driven not by economic pressures, but by population growth. The ever increasing population keeps constant pressure on the need for more developable land. When the interest rates decline, the gates are open for more development and the pent up supply of land is now in higher demand.

Financing Land:
Money lending is a calculated risk. Home mortgages have lower interest rates due to the fact that the lending industry feels if you have a home mortgage, you will probably get up everyday, go to work and make your mortgage payment on time; probably because you sleep there.

Vacant land loans carry more risk. The assumption is that you do not sleep there and will make your home mortgage before you would make your land mortgage if you were positioned to make a choice. Therefore, you will usually see about a 2% higher interest for a land loan as opposed to a traditional 30 year fixed mortgage.

Farm Credit, “The Land Bank” down payment requirements for land are 15% down, and will usually only extend no more that a 20 year term mortgage. Other lending sources may require more down payment and have shorter terms.

Any real estate that has five or more acres is considered “non-conforming” in the mortgage industry nationwide. The mortgage industry prefers bricks and less land. Depending on your goals, you can tie up a lot of assets with little cash. Consider investing money in Wall Street and you call up your broker and say, “I would like to buy $100,000.00 in stock and will pay 15% down.” If you have short range goals, you may want to fully leverage your land purchase. If you have further long range goals, you may want to pay cash or finance less. “Time value of money” will make that decision clearer.

“Highest & Best” Use of Land:
What you see is not necessarily what you get. A simple example is you purchase 10 acres of land for $50,000.00. This bounty has lots of state road frontage and lays well. The county “Sub-Division” laws say you may subdivide land into one acre tracts or 43,560 square feet lots. The average lot in this market is selling for $15,000.00 per one acre lot. Is the investment worth $50,000.00 or $150,000.00?

Learning how to recognize the potential of a tract of land is very important. Reviewing and understanding the “Sub-division laws” a must read. Knowing how to play the game starts with that affidavit.

The Out Strategy for Land:
Land is as liquid as any other type of real estate despite what the critiques say. Entering into a land investment should not be callus. If you plan to purchase ten rental properties or light commercial warehouse space, you probably spend a lot of time analyzing that investment. Land is no different. Good initial planning for the use of the land, observing the market trends, holding ability and “Highest & Best” use plan will strengthen your position.

Using the example above, a bail out strategy may be selling off two lots now at a lower anticipated price and maintaining the balance of the inventory until the market turns. Auctions which are a quick, usually 30 day close, may be one approach. Subordination can be another way to speed up your return. The initial research and planning are as important in land investments as they are with any other type of real estate investment.