circle acres part one the purchase

In April of this year we bought 12 acres in Chatham County, NC about 150 miles from Wilmington. The purchase was the culmination of over four years of saving, research and scheming. During those four years we tossed around all sorts of locations – West Virginia, Blacksburg, Athens Georgia – before finally deciding that we wanted to live in the Piedmont area of North Carolina. Not only was it close to where we all live now, but also the opportunities and people were exactly what we were looking for.

Once we started looking in Chatham County, we found out several realities of searching for homes and land in developing rural areas. Many of the traditional stick built homes on more than 10 acres were well out of our price range. At $250,000 you’ll get some decent acreage and a well built house, but, unless you will also be moving into a well paying job or have a ton of savings, the monthly payments would be pretty gross. We set our budget low and looked again.

At the other end of the spectrum were decent prices for decent amounts of land but with a singlewide trailer or other manufactured home on the land. These homes are things that mortgage lenders rarely touch anymore, so the purchase must be outright cash or some fancy financing. Pretty much everything we found in our price range was a manufactured home or a place with very little acreage.

Then we found our place. Twelve acres, a crumbling house and the perfect feel.

With an initial attempt last July to buy the place with a traditional loan, we found out that the Big Mortgage Company with the fancy ads on the radio wouldn’t loan on a house with no central heat or a house in “fair” condition. The house had a wood stove and a gas stove, and those apparently aren’t central enough. And the home had to be in “average” condition, an arbitrary word based on the observations of an appraiser. So we let it go, sad faces all around.

The next attempt came in November after I did some research on construction loans. A few things had changed – the price of the house was the same, but a foreclosure was imminent. Then came the bad news from a general contractor friend. Even though the house was stick built it was in too bad of shape for a bank to loan money on it without some massive money up front. The extent of the repairs was such that a construction loan was out of our reach simply because we didn’t have the large percentage down payment. What we had wasn’t even close. So we let it go again; sadder, angrier faces all around.

After that, the listing disappeared from the real estate websites and we thought it was gone for good. It reappeared in February at a reduced foreclosure price. Unwilling to get burned again, we waited. By the time the end of March came around, the price had dropped significantly. We contacted our realtor, and I started looking for some different financing.

We were able to find a local lender that would loan on the appraised value of the land only, leaving out any value of the home or any other structures. Even with a required down payment of 30%, we were pretty sure we could pull it off. With a few phone calls, we came up with what we needed. At the end of April everything came together, all the papers were signed and keys were handed over.

It took us almost one year from the day we originally looked at the house to the day we signed off on the loan documents. It was a constant up and down but in the end all worth it. Now, we plan, we explore the land and we figure out what we just did. Welcome to Circle Acres…