Purchasing land with joint buyers

[Burnadell]

No bank will finance a single tract with separate loans with undivided acreage.

[duckhunter175]

This is an idea that I've considered strongly as well here in Texas. I have barely scratched the surface with all the ins and out of joint purchase and ownership for a ranch/hunting land.

Spent a considerable amount of time as DSC show this year just talking to realtors, lenders and even the big brokers like St. James- who lent me his ear for about 30 min to pepper him with questions.

The common answer is an LLC with a well defined operating agreement that includes the 4Ds as mentioned above and all the extras that pop up afterwards (feed, tools, equipment, utilities, even splitting useage because there is never enough beds when friends and family learn you have a ranch)

As many have mentioned you better proceed with caution because it'll either work out (GREAT) or it won't (VERY BAD).

I'm just getting out of a land transaction from a family piece that I purchased. The decision to sell was easy to agree on. BUT I can tell you the joint ownership, life tenancy, deeded easements, wells, road frontage, etc made the administrative part of the sale more difficult than I would prefer.

[Lee230]

Don't do it, run, go get YOUR OWN PLACE.

[Farmdog]

Farm together first and see how you like it, that will do the trick.

[Draco]

I'm in partnership on a few hundred acres right now. It was surveyed into 2 separate pieces, just in case. We don't know exactly where the property line is as there is no fence between us. Even with that, there is still problems to deal with but so far, so good.

[HoustonHunter]

Lol at all the naysayers. As a commercial lender, I see multiple partners in many real estate transactions. It’s an easier way to get a bigger property that you couldn’t on your own.

Create an LLC and the proper documentation that goes with it, to include an operating agreement. Any good real estate attorney could get it done properly.

One loan, multiple guarantors. The operating agreement (what you all agree upon) determines the rest.

Good luck!

[TheHammer]

Trust your better judgement! It could work out great with the right people!

[The Crippler]

Purchasing land with joint buyers

Lol at all the naysayers. As a commercial lender, I see multiple partners in many real estate transactions. It’s an easier way to get a bigger property that you couldn’t on your own.

Create an LLC and the proper documentation that goes with it, to include an operating agreement. Any good real estate attorney could get it done properly.

One loan, multiple guarantors. The operating agreement (what you all agree upon) determines the rest.

Good luck!

This is the way to do it if you’re going to do it. Works great for investments, just don’t get emotionally attached.


Sent from my iPhone using Tapatalk

[TxDispatcher]

I had a chance to do it a few years ago, and passed on the opportunity simply because I wasn’t comfortable with the deal. The guy who asked me to join, I wasn’t worried about in the slightest...but the other partners, I had questions on and decided to not join in on the endeavor. If you know all parties involved and can with great and deep sought thought come to an agreeable decision, knock yourself out I couldn’t and therefore decided to pass on the chance. I’ve second guessed myself a time or two, but it was a “good” second guessing I’d really hate to have overridden my gut and had a “bad” second guessing

[Cooper]

Don't do it!!!

[KactusKiller]

No bank will finance a single tract with separate loans with undivided acreage.

Not true necessarily.

[Burnadell]

Not true necessarily.

Well, I was a commercial lender and bank president for a total of 24 years, but have been out of banking for 29 years...before LLC's, LLP's, etc became so popular. That said, I we would have never made multiple loans to different people secured by one undivided tract of land. Loaning money to an entity with multiple guarantors is a different situation.

Why do you say not necessarily? Have you experienced otherwise?

[surso]

Lol at all the naysayers. As a commercial lender, I see multiple partners in many real estate transactions. It’s an easier way to get a bigger property that you couldn’t on your own.

Create an LLC and the proper documentation that goes with it, to include an operating agreement. Any good real estate attorney could get it done properly.

One loan, multiple guarantors. The operating agreement (what you all agree upon) determines the rest.

Good luck!

Thanks. Definitely a lot of naysayers. There are definitely some valid concerns, but seems like it is possible and there are ways to minimize the risk. I feel like we have the right group that could definitely make this work and also have an exit strategy that all could agree on.

[W E H]

Well, I was a commercial lender and bank president for a total of 24 years, but have been out of banking for 29 years...before LLC's, LLP's, etc became so popular. That said, I we would have never made multiple loans to different people secured by one undivided tract of land. Loaning money to an entity with multiple guarantors is a different situation.

Why do you say not necessarily? Have you experienced otherwise?

i going to agree with Burnadell also. he's got the knowledge and hands on experience, from what i understand he was a jr loan officer that wrote up most of the original land grants from Spain to the Original Texas Settlers. plus i'd really like to have a conversation with him sometimes

i do enjoy creative financing at it's finest, but i do not see how multiple banks will lend on the same piece of property with undivided interests. when party A defaults to Wells Fargo and Party B is still paying Frost and Party C is paying Chase. what does Wells Fargo have to foreclose on and how do they sell it?

i could see three people on the same loan with the same bank with the one entire tract of of land as collateral.

[jaime1982]

Guy I hunt with went in 1/3 with his dad and brother for a 20 year loan on his property.

He paid all 3 parts for 19 years.....

Sent from my SM-G991U using Tapatalk