Building a Custom Home

A lot of property in Lancaster and Palmdale is advertised as build your dream home. It is easier said than done. First you need to budget for it. A custom home can cost from 150k to $450k with the average being $300k. But first you must buy the land, and the land location is tantamount. Many buyers buy land without power, water, or city services. Once you get the permits to build on such a property then you will need propane tanks for power, drill a well for water and use septic for sewage. All doable tasks. But getting the water 1500 feet below the surface is the first real trick. This is typical in Lancaster and LA County. A popular option is a modular home or prefabricated home. They almost look like a normal home, but you will have to disclose that the house is a modular home, and the selling price may be lower to reflect that. If you choose to build it yourself then you may need estimates for the cost to do so in your area. Plans and designs must be submitted to the city or county and then permits and inspections follow once initially approved. A builder will likely have several inspections along the way. Then you need a construction loan, or a construct to perm loan. A construct to perm loan can involve the land purchase as well. There are numerous factors that affect the cost such as square footage, number of stories, roof type, finishing’s, and issues like if power, water and sewage are available. The propane tank is reasonable if you go the lease option. It may cost only a few hundred to install, and the cost of a simple slab. A septic tank can run $1500 to $4000. A well estimate is $5k to $40k, but on average $25 a foot. The average in Lancaster and Palmdale area is $20-$25k for a well . In the end it may takes years to complete.

AV Sees Double-digit Home Price Gains

This is a reprint of an AV Press Article By: Jim Skeen AV Press PALMDALE - Lancaster and Palmdale neighborhoods saw double-digit home price gains in August, according to a report from CoreLogic. Lancaster's 93534 ZIP code had a median home price of $185,000 in August (57 sales), up 13.3% over the year. Lancaster's 93535 ZIP code had a median home price of $200,000 (98 sales), up 17.6%. Lancaster's 93536 ZIP code had a median price of $300,000 (122 sales), up 10.5%. Palmdale's 93550 ZIP code had a median home price of $220,000 (75 sales) in August, up 13.4% over the year. Palmdale's 93551 ZIP code had a median price of $336,000 (111 sales), up 10.2%. Palmdale's 93552 ZIP code had a median price of $259,000 (65 sales), up 19.4% over the year. Earlier this month, the Greater Antelope Valley Association of Realtors reported there were 517 homes sold in August in the region, a 4% increase over August 2015. Through August, 3,523 homes were sold in the Antelope Valley, down slightly from the 3,535 recorded at this point in 2015. The average selling price of an Antelope Valley home in August was $263,505, up 15% over August 2015. The average selling price of an Antelope Valley home so far this year is $244,038, up 10% from this point in 2015. Of the August transactions, 3% were foreclosures and 2% were short sales. In a separate report, CoreLogic reported there were 23,278 new and existing homes sold in Southern California in August, the highest tally for that month in a decade. The region's sales were up 9.5% over the year. In Los Angeles County, 7,725 new and existing homes were sold, a 5.4% year-over-year increase. The median price of a Southern California home was $465,000 in August, a 6.2% increase over the year. In the county, the median price was $530,000, a 6% increase. "Job growth, low interest rates, household formation and other factors helped drive up activity," said Andrew LePage, an analyst with CoreLogic. "The big picture is that the housing market continues to edge back toward normalcy in the wake of the worst housing bust in modern history." Existing homes in California sold at a seasonally adjusted annualized rate of 420,360 units in August, down 2.2% from a year earlier, according to a report from the California Association of Realtors. August was the sixth straight month of year-over-year sales declines. The median price of an existing, single-family California home in August was $526,580, up 5.8% from August 2015. The association's Unsold Inventory Index, which indicates the number of months needed to sell the supply of homes on the market at the current sales rate dipped from 3.6 months in both July and August 2015 to 3.4 months this August. Nationally, existing homes sold at an annualized pace of 5.33 million in August, down 0.9% from July, but up 0.8% from August 2015, according to a report from the National Association of Realtors. "Healthy labor markets in most the country should be creating a sustained demand for home purchases," said Lawrence Yun, the national association's chief economist. "However, there's no question that after peaking in June, sales in a majority of the country have inched backwards because inventory isn't picking up to tame price growth and replace what's being quickly sold." Nationally, the unsold inventory is at a 4.6-month supply. A six- to seven-month supply is considered normal. The median existing-home price for all housing types in August was $240,200, up 5.1% from August 2015 ($228,500). August's price increase marks the 54th consecutive month of year-over-year gains, the association reported. Distressed sales - foreclosures and short sales - accounted for 5% of August transactions, the lowest percentage since the association began tracking that data in October 2008.

How to Get a Land Loan for a California Lot or Custom Home

Lot loans can be much more difficult to obtain than a typical home loan. Getting a mortgage loan for a home or condo may require a higher down payment and a good credit score in today’s loan market, but it is easy enough to obtain even with a thirty year payback. If you want a loan for raw land well today that is maybe mission impossible. There are no banks that we are aware of that will offer a 100% loan for raw land purchases. IndyMac Bank of Pasadena was one of the first banks to be taken over in the last financial crisis by the FDIC in 2008. Its assets were absorbed by OneWest Bank. We have found that IndyMac provided loans of up to 85% of the land value. A number of those properties were foreclosed on and resold in the past year. Other major banks like Bank of America and Wells Fargo have foreclosed on some land owners and have resold those properties in the last few years also. Yet we are not aware of the details of those foreclosures. A direct loan from a bank for a land parcel is likely a thing of the past as banks require more security and undeveloped land provides no bank security as raw land is more speculative and has no improvements.

A more likely land loan would be a loan to build a home. The most efficient way to do this would be a construct to perm loan which is a land loan to construct a home. It is different than a construction loan. According to ehow as construction loans are temporary as they are drawn upon during the construction process. There is no principal paid on a construction loan during this draw stage, as it is used entirely to construct a project. A construction perm loan is a one loan to build a home that takes the place of up to three separate loans. You can write a contract for the purchase of land, and add it to the loan package, saving the cost of closing a land loan. The second is the construction loan itself. One can go into a bank and get a construction loan and pay to close it. Later one would have to pay to close a permanent loan to pay off the construction loan. A construction perm loan would encompass all of these loans into one, saving money in time and closing costs. You get the loan to buy the land, and to construct the home making it a longer term loan.

Another option may be an “owner will carry loan” (OWC). This is a seller financed loan where the land seller gets interest from the buyer over time. These are typical monthly payments at normally competitive interest rates. These types of loans are usually short term from as low as three to fifteen years. They can be longer or even shorter terms. You should expect to pay current market interest, and we advice you get a no penalty for early payment. The down payment (deposit) is usually higher. An example may be a $20,000 property would require a $5000 deposit. The balance of $15,000 paid monthly at 7% interest over 5 years. In this case you would pay $297/month over 5 years or $17,820. This is an easier way to purchase land over time without the need for bank credit. If you fail to pay then the seller can foreclose on the note and the seller retains the deposit and any payments you have made. This process is very common in the purchase of raw land.
For more answers on land opportunities and owner will carry options contact us at vacantlanddeals.com