[USER]

I’m 37, husband 40. 4 kids. I make about 180k and the farm in now paying for its own mortgage.

We make some $ with the farm but use every penny to improve it.

We owe 94k on our home. 2.5% APR. $1170 month which includes property taxes.

About 90k equity.

We owe 160k on a farm at 6.5% APR.

$1175 month. About 300k equity.

38k personal loan on a construction project which is now complete. 8% APR. $850 month.

I have 45k in student loans.

We owe 11,500 on 1 vehicle. Other two are paid for. $354/ month 2.3% APR

Farming equipment $400/ month 0% APR. still owe about 15k.

We are planning to refinance the farm and personal loan into one loan. Intrest rates on farms are terrible and will likely be at 7%.

It’s currently on an ARM set to go to 1 point below prime in October.

Refinancing this would bring that monthly payment to around $1300/ month.

I have fallen in love with a rural piece of property.

There are two liveable homes on this 2 acres plot.

Seriously considering approaching the bank to see if I can secure a loan for it.

It has been on the market 2 years because frankly it’s hideous.

The price has been reduced to $149k.

I can’t leave my current home due to teenagers in high school but would want to live there one day.

I would want to rent both homes for now in order to secure the property and doing so would likely result in a net of around $500/ month.

How do banks treat rental property?

Do they take into account the rent in regards to affordability for the borrower or do I need to be able to foot the bill without the rental potential?

[Rick]

I would stop accruing more debt and focus solely on retiring existing debt.

Ok maybe not that great primary residence mortgage but otherwise you seem too comfortable with the various current debt and looking at getting more.

Can you make it work?

Sure tons of people do.

But seeing it from the other side of debt for a dozen years and I can share it’s a near indescribably feeling of total freedom.

And wow money just seems to rain down from every angle when it’s not going out at every angle to banks and lenders.

Good luck on your journey.

But do consider killing that debt load.

[DeeDee]

The property you want has been on the market for 2yrs? Have you considered asking the sellers directly if they would consider seller financing?

[Eric]

Now I want tips on how to make the farm profitable. I need to do way better with my farm.

[Mark]

Playing devils advocate here. If the property isn’t selling for two years, how do you know you can get renters?

What happens if you buy that land and can’t find someone to rent?

Personally, I would focus on paying your other debts first.

With the income you have, you should be able to knock out a few of those debts in the next year or so.

[Bill]

To finance a Rental property usually requires a down payment of 25%-50%.

With the debt you mentioned, do you have that kind of money for the down payment?

And if you do, I would think paying down expensive debt would be the first option.

[Jill]

If the property is hideous, and it’s struggling to sell at 149, Im concerned you won’t be able to get even one renter much less two

[Dawn]

Usually if you haven’t managed rentals in the past the bank won’t consider the income.

Talk to a few mortgage brokers and see if they have any ideas.

We early retired almost twenty years ago using investment properties.

In making decisions about them, we always considered worst case scenarios.

If we could avoid disaster in a worst case scenario, we went ahead. What would I consider in this situation?

– the propert needing more work than you expect

-lower rental income that you expect

-tenant stops paying rent and needs to be evicted

-one of you gets laid off

-interest rates go even higher.

[Author]

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