Property... keep it? sell it? wait and see?

Hi again,

My husband and I are still looking for "our" motorhome.  We have been looking at photos online for years.  For the last 4 months we have been looking "for real".  We have completely changed our minds from what we started looking at a couple of years ago, to what we are looking at now.  OH, the power of education and experience!  I think in the last 6 weeks, reading non stop, I have read almost every thread in this forum.  Anyway...  I am thankful for this forum and all of your expertise but... my mind is spinning!

We are looking to be full timers.  And part time workampers.  I, myself have spent the last 3 seasons workamping out of a 1966 12 ft aristocrat (it can be done!) Just wanted to let you know that the life style is not brand new.  Hubby would come spend the weekends.  Yes, 2 old people in basically a twin bed!

My husband and I OWN a very old mobile home on 2 acres in the Willamette valley.  We lived there for 20+ years.  We have spent the last 3 years living in a tiny apt. in S. Oregon.  We have downsized over the years to nothing left in our house. And are working on getting rid of the last in storage and keeping the apt. pretty naked.  My husband retired this past July. 

I don't really have a question, but rather would like to hear a lot of candid discussion.  I have been reading that people have a hard time for example, getting a loan without a permanent address.  We had thought we could save a lot in interest by selling our property and paying off our RV loan with part of the money.  But what if we need or want to upgrade in the near future?  What if we need a temporary "free" place to park "in between".  We have even kept our old PO box and our grown kids use it and forward any mail to us.

like I said, would just like to hear everyone's thoughts.  keep it? sell it? or wait and see?  the property taxes are only about $1,000. a year

Thank you,

Robin and Bill

Robin
I, and maybe others, would be curious to know where your land is located. Not the address but just something like three miles from this and seven miles from that. Lots of RVers have a home base and Oregon is a pretty nice place to spend some time. Possibly you two could transition to what you want and someone else could find what they have been looking for.

For me there are many unanswered questions, which maybe is part of your question that you want to discuss. So, for starters, what is the Mobile on the property doing now? Is it rented bringing income? Could it be? If you're in Maryland and the rental Mobile Home gets a roof leak can/would your kids be able to take care of it?

When fully retired and paying on a DP will you have enough income to live comfortably and cover the unexpected incidentals? Or, do you really need to liquidate the property to lower whatever payment you might have on the DP?

For me, I believe that they quit making land a while back and it will probably be worth more in 10 years than it is today. Even if the Mobile is too old and just gets removed for scrap. Land with power/water/utilities as a building site are sometimes difficult to get. If I didn't need that money I'd leave it as an investment. CD's and savings accounts certainly aren't making any money, maybe land will.

Buying a DP takes a lot of time and energy if you do it right. Finding what you want the first time is important. Very important, in my mind. Selling and rebuying costs money. Buy the right one the first time. Walk thru as many as you can. Make lists. Make lists of what you can't live without. Make lists of things you like. Make lists of things you don't want. Cross off things and move them from one list to another when you change your mind.

You said you workcamped from a 12 footer. You lived thru it, but couldn't have been happy with it, just existing. Your new to you DP should have ALL the things you want. If you settle for less you will constantly be thinking, "in our next rig we'll.....", which means you're planning to fail. Now if it's that the DP you find has a cloth couch and you really wanted leather, then not a problem. Live with it a couple years and have it recovered. If you really wanted tablespace beside your bed to put your book each night and you got a King bed without tables instead of a Queen with tables, that's a little bigger problem, but maybe still fixable. If however you hate going slow up the hills and you get a 40 footer with a 300 hp engine, that's a killer. (here comes the fellow with 300 hp telling me that he can climb any hill at 70 without slowing, but I'll have to see it to believe it)

While you still have a permanent address, buy your DP, the one you're going to love for 10 years or more. If you give up your S&B address after the loan is made I doubt anyone will have a problem. They are looking to see if the check cashes at the bank each month. I don't think my banker ever drove by my house to see if I lived there.

You will never have every answer to every question. You will never be 100% certain you're doing the right thing. Do your research, make a good decision and make it work. Either way you go with the property will probably work out just fine. And if you're out on the road enjoying life, even bad decisions don't hurt as bad.

I wished I'd washed the window in our S&B before we left in October. But now in December, 1200 miles away, in sunshine (CA) instead of rain (WA) I'm not so worried about it. In May when we get home I'll get right on it.........  ;D

Ken

When we bought our first DP two and a half years ago, we had a home that was leased out, and an apartment, i.e. very definite home addresses. We were warned not to use the phrase "living full time in the motorhome" during the application process, instead the phrase "travel extensively". And I was gainfully employed with perfect credit.

Fast forward to the new coach this past summer, the house has been sold, and yes, we live full time in the motorhome, and use Escapees with an address in Texas, and I am still gainfully employed. No lender understood the context of no rent or mortgage payment; I spent hours on the phone trying to explain it to loan officers. There is a little known federal lending regulation that came into play after Hurricane Katrina that will not allow lenders to loan to anyone living full time in a recreational vehicle. It's complicated but it comes into play. You can also thank Homeland Security and tightened requirements for identification since 9-11.

Our solution for the loan application was using an initial address of family property that was in probate with the Escapees mailing address. Right on the edge, here. I know a lot of people who play fast and loose with permanent addresses but not having a place to go recover mortgaged property that is in default is another part of the equation.

So my advice to you, especially if there is no financial burden, is to keep your paid for property, keep up the taxes, and down play the concept of living in your motorhome full time. We get it; most others don't.

There is a little known federal lending regulation that came into play after Hurricane Katrina that will not allow lenders to loan to anyone living full time in a recreational vehicle. It's complicated but it comes into play.

Click to expand...

For the record, the new banking regulation doesn't actually prohibit loans to fulltime RVers, but it makes the procedure complicated enough that lendors simply refuse to deal with it. Yet another "unintended consequence" of a federal regulation that is supposed to protect us better.

Regulation Z, Section 226.35 can be researched to find the root of the issue, which dumbed down, requires property taxes and insurance to be escrowed on primary residences. That is further complicated on RV's, since they are not always taxed like real estate, and that burden of discovery is just another aggravation to a loan officer or underwriter who doesn't completely understand the niche RV market.

The net result to the full timer RV'er is that there are significant barriers to securing a loan, but they can be overcome with an understanding lender and loan committee. It's just not a cookie cutter solution.

Like I said, it's complicated.  8)

When we got our loan with USAA all they wanted was an address to mail the check.  I could have used the dealers address if I had wanted to.  We had been members for hours when I got my first RV loan, joined to get the loan as a mater of fact.  The rates are really good, but I've heard some people get better ones.  They have floated down our rate for free both times they dropped the rate for new borrowers, cant beat that.

About the property, I'd keep it.  Like someone else said, they stopped making land a couple of years ago, but they still seem to be making people to live on it, so it is bound to get more rare.

Jeff

Jeff,

Would you clarify whether you were a full timer when you secured that loan with USAA?

Kim

I am not a full timer now nor have I ever been.  But they asked me if I preferred to have the documents and the check sent to the dealer, my home or to a different address.  I chose my home.  I was just mentioning that they seemed more than happy to do what ever they needed to get the loan done.

Jeff

Thank you all for your input,

Quillback 424 - The property is a few miles south of Salem, near Willamette Valley Vineyards.  It's a lovely area.

bucks2 - The mobile home is currently empty...  not really rent-able as is.  Needs a new deck and lots of little repairs here and there.  (We don't really want the headache of renting it out anyway)  Don't want those unending phone calls to fix the latest thing that it needs.
We are debt free.  And yes, trying real hard to do this right in the first place.
I had a blast workamping and living from our cozy vintage TT.  It was a unique situation though, I worked in the resort restaurant a LOT of hours.  So, no cooking needed.  Lakeside resort with site provided and all hours paid.

Skyking4ar2 - I only ever mention full timing on this site  .

Not sure if its still applicable in this day and time...but a banker type person told me several years back that RV's are considered adult toys..sorta like boats..jet skis..high dollar scooters etc. When the going gets tough the MH is the first item folks decide they really dont mind giving back to the lien holder too much. Now pull that trick with a car a person would tend to be walking.  Car loans are much safer in other words. Implication being if somebody wants to finance an expensive RV needs some good credit and/or a big down stroke. Best of fortunes on your endeavors. I hear it rains too much in Oregon..lol. 

I'm not a fulltimer so do not speak from experience, however, I do read and hear a lot.  Many people bought nice motorhomes with large loans when times were good.  Then the economy tanked and, just like stick and brick homes, their motorhomes were underwater.  A lot of people either got stuck trying to sell at a decent price (e.g. not lose too much on the deal) or it got repossessed by the bank.  Another situation we've seen is people who are perfectly healthy enjoy their motorhome with its big loan.  Then a catastrophic illness hits and they're not only underwater but they need the money from a sale to pay mounting medical bills.  If the needed sale coincides with a bad economy like we've had recently, it's a doubly bad situation

What I'm leading up to is that you should pay as much down as you can to keep the loan as small as possible.  I've recently started hearing ads again for the old "zero down" to buy cars and that's something that was bad originally and may be even worse now.  I would say to avoid one of those "deals" which aren't really deals at all.  Your retirement income will be limited and you need to think about how you would handle your finances, especially a big RV loan, if something drastic happened.  Each of us has a different way of looking at this, but you need to reduce your level of risk to its minimum so you aren't one of the ones "caught" like so many have been over the last several years.  We all want what we want, but it's not a good idea if we can't afford it.

ArdraF

It's true, they aren't making any more land.  But over the long haul, land value moves about in hand with inflation.  And it costs money to hold.  I'm not in favor of holding land for speculation.  I've done that, the annual costs don't seem like much at first.  Then after ten years or so you add up what you have spent just to hold it, it doesn't look so good. If you need the land, that's different.  Or if the money is going to burn a hole in your pocket and you will pee it away, that also might be a reason to keep the land.

ArdraF -

Thank you so much for speaking the way I think!

I know right  :-\!  And I have a tendency to go over kill on the "what ifs"...  I suppose that is why I am having a hard time letting go of property we don't need, want to live at, OR keep up.  Also why we have watched our friends over the years, buy new homes and cars, refinance and go on cruises and fancy vacations.  While my husband and I have "made do" with our 2 acres and remodeled (ourselves) mobile home, and paid it off.  AND "made do" with our little vacations at Oregon lakes and campgrounds in our vintage 1966 aristocrat that I fixed up rather cozy.  And have had the best of times and adventures!  THEN the economy thing hit...  our place was paid for, our friends had to sell and lost so much... come to find out, they were upside down on everything!  The economy did not phase us.
We are looking at older but well made DP's and will probably pay up front for half of it and we were looking at financing the rest (which isn't much to most people).  Only because we don't want to touch any other moneys.  So, if we sold our property, we would use just a tiny bit of the money to avoid paying interest.
I should also add, even though my husband retired from the job he had for 38 years, he is 62 and I am 53...  We aren't really wanting to really retire, we just want to be able to move around to jobs we "want" to do.  Of course they pay a lot less and offer no benefits, but we have all that in place now.  So, we think it is time for us to stop being so careful, and get out there!  We have raised 5 children between us and they are all healthy and prosperous.  We did well...
I should also add that living in the Willamette Valley causes me great winter depression.  By the time August comes around, I am finally feeling normal and happy, only to have October take me down again for the next 10 months...  doesn't seem like any way to live life.

I think the more I talk...  the more I am answering my own question?

Robbie ♥

Snowman9000 -

It does cost us a little to hang on to the property, but not much.  With the sale, the money won't burn a hole in our pocket    We would squirrel it away as usual.
We have the most fantastic neighbors out there!  They have even kept the field mowed for a VERY low price.  And they watch the place like hawks.
We aren't speculating about getting more for it at a later time.
It is just so cheap to keep, and I sometimes think, "what if we need a place to go to"?

We tried finding someone to move in for VERY cheap, almost nothing rent, to just keep up a few things and be there.... that was a disaster of meeting the strangest folks!

Robbie ♥

We have somewhat of a similar situation that may be of help.  We have been talking over the past few years of selling our 24 acres and TT for a houseboat.  Basically, a RV that floats.  Very easily done where I am at.  Long story short, we bought 50% of the property almost 20 years ago from a family member that wanted to pay off a land contract.  They since sold their half to my mother-in-law who had no interest in it and willed it to my DW.  Initially, we only paid $12K for 12 acres.  Now, with the real estate market down as it is, we can still get $2K per acre.  It's been paid off for years and the taxes are pocket change.  I have a neighbor who is a real estate agent who has been all over my butt trying to be the first one on the list to buy it.  He knows that a half woods/half field/300' of river frontage plat will sell nicely.  Little does he know that it's his frequent inquiries that help me decide to hang on to it a little longer.  He knows to buy low, sell high.  Common sense.  We are holding on to it with hopes that the market will come back up, and then some.  A gamble, I know.  That is how the game is played.  We are debt free also and not in that much of a hurry.

If you can do it, I say watch for all the signs that it may be time to go for your dream.  Research the real estate market trend in your area, if the banks/credit unions are loaning for property which may indicate a local will be interested, etc.  If your research points toward an upward trend, and you have no problem affording it, then hang on to it for a little longer.  I know you mentioned you were not looking to make a profit.  Don't give it away though.  Just to break even if you can afford to wait for a few extra bucks!

It does sound like the cold weather takes a pretty hefty toll on you.  That would be something you both need to think seriously about.  That would be a main issue for me.  If I was that unhappy for that long during a year, I would have moved long ago.  But that's just me.

"VERY cheap, and almost nothing rent" would be my first clue on the type of applicants that showed up for the interviews.  I'll bet that was fun.

Best of luck and Merry Christmas.

My Grandfather told me "if you can't afford to pay cash, you can't afford it." 
Through life experience I've found this to be great advice that I wish I had listened to and applied when I was young.  Now, after many rough years, I live by it. 

Presently I am keeping properties own, as I do believe that the best investment at this time is to own tangible property.  My guess is that in 5 to 7 years, property will be valued higher than it is today.  It has already started heading back up in the DFW area, but it can always drop again.  The local employment picture of the area is a key factor, the economy is a secondary factor. 

If it were me, I'd buy whatever type of MH for which I could pay cash.  A MH is a depreciating asset.

If I needed the money from the sale of the property to purchase a MH, and that's what I wanted to do, I'd sell so I could pay cash for my MH. 

If not, I'd consider doing a Lease Purchase. 
I prefer a 3 year LP where I offer them 50% of their payments toward their down payment. 
The sale price is what the property appraises for in 3 years at the time of sale.  This takes me out of the maintenance obligations as they are responsible for all maintenance, and gives them an opportunity to purchase a home, and gives me any appreciation it may have in that 3 years.  I do also have the risk that the property could depreciate in that time, so that is a risk I take. 
There is the risk that they don't take care of the house, but this arrangement usually prevents that situation.  I've not had good luck with a straight rental situation.
Also with today's laws, if I lived in it for 2 years out of the last 5, any gain is tax free.  This also makes it easier for them to qualify for a loan, as they now have a sizable down payment. 

Say the property appraises for $100,000, I LP it to them for $1,000 a month, in the three years, they have $18,000 towards their down payment.  If they decide not to buy it, all of the lease payments belong to me.  Above market rent, yea! 
I could then sell it outright to someone else, or try the process again, or move back in.

That's what I'd do, my two cents.  Good luck.

99WinAdventurer37G said:

The local employment picture of the area is a key factor, the economy is a secondary factor. 

Click to expand...

Great point.  But not knowing anything about the area the OP's 2 acres are located, and comparing to my situation in which my property is in a strictly residential/recreational area, that is why I made my recommendation.  No local employment other than grocery/convenience stores or taverns in proximity.  RobinsBill mentioned that the current "homested" is loved during the warm months.  But the Winter doldrums takes a toll.  And with the DH now retired, it's becoming an issue of whether to spend the cash now for their dream and travel (retaining the property), sell the property and travel,  or sit tight on the 2 acres until the market comes back up and they both retire.  When they are comfortable with a selling price, time to unload the property.  Which would keep them free as birds. With most likely a profit.  And still no debt. 

Most retirees I know don't want to be long distance landlords.  Or have ties to properties they are renting/leasing while traveling.  They just don't want the worries or headaches.  It's a time to leave those type of headaches behind and enjoy themselves for as long as they can.  I assume some, maybe such as you, have no problem handling a LP property as an owner.  Myself, when after working all my life and I still have some left to enjoy, I want to enjoy it without worrying about if a rent check is going into the bank on time, if the place burns down, if the tenant is taking care of the place, etc.  Yeah, the tenant is responsible if the contract is written correctly.  But who wants those worries and the possible legal battle that may be a result?

BTW...We are currently using a LP contract with a piece of suburban property which was written with the help of a very good real estate lawyer near my stick house.  We are not ready to retire yet and I will guarantee you the LP will be satisfied within the next 2 years!

Worry is interest paid on trouble before it is due. 

Or, as I saw on a plaque in Cracker Barrel; (a picture of a woman in a rocking chair) "Worry is like a rocking chair, it gives you something to do, but you don't get anywhere."

I've done LP and never concerned myself with them as long as that payment is in the bank every month. 

Life is too short to worry about challenges, a quote from MASH, Charles Winchester III "I can do only one thing at a time, I do it very well, then I move on."

Why not sell the property you own and use the proceeds to purchase another homebase property in a more pleasant (sunny and warm maybe?) location. You would have a location to park your motorhome for free if you need a break from work camping and you'd still have some real property to keep the lenders happy, especially if you bought an inexpensive used mobile home to set on the new place. You might even end up with enough profit left over after the sale/purchase to buy your new motorhome free and clear.

In July of this year I started fulltiming, setting up my domocile in Washington state. I owned three houses in Kansas (two investment/one I lived in) and put two of them up for sale. One's now sold, the other, still waiting. I'm on the fence over selling the third house just for some of the concerns you have. If I do sell, I plan to buy a few acres of land in Washington where I can either build a small house or set a mobile home. I'd just feel a little uneasy having my travel trailer to live in, with no "real house" as a backup. 

But even if the land didn't have a home on it, it would be nice to have a place where I could plant some trees, or have a garden or a few chickens or...  You get the idea. For me, living the RV life is great now, but who knows what I'll want to do in the future, or what my capabilities will be. If I have some land, at least I'll have a running start at living a different kind of life.

Bill