Photo by canva.com.
Six years ago, my wife Jen and I purchased our 20-acre homestead for cash. We worked hard for many years and saved and used our own money. We are average people, neither of us went to college. We both started out at minimum wage jobs and we didn’t inherit any money. If we could pay of our homestead (by age 35) we think that anybody could do it. And this is how we’d do it if we had to start over again today.
The last six years with ZERO mortgage have been amazing. We have more freedom to do what we want and instead of paying a huge chunk of money each month for that mortgage we’ve been able to reinvest that money in ourselves, our homestead business ventures and improving our property which is a great long term investment. We’ve also been able to make decisions we couldn’t have if we were stuck at a job we hated because we were scared to quit because of a mortgage hanging over our heads.
WHAT if we started out today? How would we buy a homestead for cash if we started over? Here is what we came up with as our plan. We also did a video version here-
Write Down Your Frugal-Living Goal
The first thing we’d do is write down a specific goal. Then we would both work very hard, take all the overtime we could and we would be frugal like you’ve never seen. This is what we did in order to save for our current homestead. When we say frugal we mean it. No fancy smartphones, no Starbucks or out to each and absolutely NO car payments. The last three cars we purchased were all for under $1400 cash (we did a video on it) in the 10 years leading up to buying our homestead we’ve saved over $70,000 by purchasing used vehicles instead of new!
We’ve never owned a new car and we never used credit cards. Even six years later we have plenty of disposable income to afford a car payment and I still won’t do it. A $500 (or more plus higher insurance) payment is the last thing I want. Instead we take that $500 and put it to work for us. For example we put it towards our homestead dog kennel OR our homestead AirBnB rental or our YouTube channel and that $500 will continue to grow. That new car smell fades fast and the amount of freedom traded for it is just not worth it to us.
We would be patient. Right now real estate prices are crazy-high and that bubble will burst. Real estate is a great investment and it will always trend up, but while it tends up there are many peaks and valleys. We saw this in 2008 and then the prices dropped. I believe that the current boom will bust and prices will come back down. I would patiently wait to purchase while frugal saving and working overtime.
Some Options Make More Sense than Others
When the market comes back to reality we would go one of two routes:
- Buy land and build or
- Buy a foreclosure or major fixer-upper.
More on this below. We would look for an opportunity that could also lead to future business revenue. For example our current homestead is a 2 family. So we’d look for something with rental potential that could be a large basement or attic that could be converted or a two family/duplex. I’d also look for something maybe near a busy road so that we could potentially sell firewood or have a produce cart. I would look for something with room for an orchard. I would strongly consider the potential business revenue my future homestead could generate.
Our current homestead makes money from Airbnb (over 20k per year) our new Dog Kennel, our Youtube channel, we’ve sold eggs and we have enough forest that we could sustainably sell firewood. Those are some ideas worth considering.
Consider Options for Working Without an Agent
Personally, I would NOT buy from a real estate agent. I would buy for sale by owner or foreclosed. A real estate agent can in many cases increase the price by 6-9+% and any chance of getting a good deal is often lost. I know this because I was a licensed real estate agent for six years. Real estate agents almost all work for the seller and its their job to get the most money for the seller.
Temporary Living While You Prepare
If we found land, we would dig an outhouse and put up our 10-by-12 all-weather wall tent. It has a wood stove and it can be cozy year round. We’d dig a well by hand and we’d live in the wall tent while we built our permanent house. Depending on the situation we’d maybe build a tiny house on wheels to live in while we saved up more for our permanent house. We’d live frugal and minimal while we build our permanent homestead house. Then we’d sell the tiny house or rent it out.
Another options is we’d search for a property with just a metal building on it. Not as common but they are out there. In fact three miles from here we drive by one all the time. Someone bought the metal building on a 20-acre parcel and they live in an RV outside it. We’d do the same but instead build an insulated apartment inside the metal building for a reasonable cost. Then we’d save and slowly work to build our main homestead home. Once the main home is done we could move into it and rent out the apartment! Another option is we could live in the wall tent and build a log cabin on our homestead.
Search Tax Records
When it comes to searching for property there are tons of websites like Zillow.com or Realtor.com but another option for land is to search tax records. Most states have online tax record parcel maps. One tactic I would consider is searching these maps in an area I am interested in. In my area, I have countless 20- and 40-acre parcels surrounding my home. Most of this is hunting land. I suspect much of it is rarely used some of it may have been inherited. We’d search the online tax record parcel maps and look for properties that way.
If the mailing address on file didn’t match the parcel itself then we’d know the owner likely doesn’t live on the parcel. We’d write up a bunch of letters and mail them to these folks to see if any want to sell or perhaps subdivide a 40-acre parcel into two, 20-acre parcels. It would not be easy but I am sure with enough work we could find a seller and NOT have to compete with the hundreds of buyers finding properties on Zillow.com. In a similar way, we’d search local papers and Craigslist for for sale by owner properties that are not listed on MLS/Zillow.
While it wouldn’t be easy and it could take many years, we are confident we could purchase another homestead for cash.
Kerry W. Mann, Jr. moved to a 20-acre homestead in 2015, where he and his family use modern technology, including YouTube and Instructables.com, to learn new skills and teach homestead projects. Connect with Kerry on his Homestead How YouTube page, Instructables, Pinterest, Facebook, and at My Evergreen Homestead. Read all of Kerry’s MOTHER EARTH NEWS posts here
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