Dateline: 12 May 2006
In my last blog entry I spoke of my vision to one day own land (more than our current 1.5 acres) where home, family, and work (a.k.a., the family economy) can be united and where future generations of my family can be nurtured while exercising sustainable dominion. And I mentioned that I want to do this debt-free, even though I do not have the financial resources right now to make it happen.
So how does one get from here to there? That is the question. My answer is to mix diligence, thrift, and focus with prayer and faith. And, of course, we must add patience and wisdom into the recipe too. The patience part is hard for me, seeing as I’m 48 years old and my sons are growing up way too fast. But they share in this vision too and, perhaps, to make it happen, they will have to literally buy into it one day. And I have resigned myself to the fact that I, like Moses (though I am nothing like Moses!), may never see the “promised land.” Perhaps I will only pass on the conviction and vision and my sons will “take the land.”.
Whatever the case, as a step towards the goal, I feel compelled to buy the old Grange hall in Moravia, which is a couple miles from my house. I’ve mentioned this in the past here and I’m going to share with you about this matter in more detail because so many people have expressed an interest in our little venture. It seems that my life has become something of an open book lately. At least some of it. I’m glad to share portions of it with you. Perhaps some people can learn from or be encouraged by our exploits. In any event, if you feel compelled to pray for us along the way, that would be greatly appreciated. Now, about the Grange....
We drove by the Grange hall on the way to church one day earlier this year and noticed the little FOR SALE sign in front. When I saw it I remarked, “Hey! They’re selling the Grange hall!” And after a couple moments of thought, I exclaimed, “We should buy that!” But we did not at that time pursue the possibility.
A few weeks later, a lady I know who, it turns out, is a Granger (and I never knew it), mentioned in conversation something about the Grange hall being for sale. I told her that Marlene and I had our wedding reception there 25 years ago (read about it here). She told me she remembered working that day to cater the food for the reception. And she remembered that she and the other Grange ladies were concerned about the ability of the floor to hold up to our dancing. I have a vague recollection of several Grangers, gathered on one side of the hall, looking on with concern. Now I know why.
I asked some questions and found out the hall had been for sale since last fall. They had shown it to a few people but no one made an offer. The town has given the building an assessed value of $108,000. A local real estate person told the Grangers they should ask $89,000 for the two acres and 4,000 s.f. building with a drilled well, septic system, kitchen, and two restrooms. I asked her what she thought the Grange would actually take for the place. She shrugged her shoulders and said no reasonable offer would be refused. I told her we’d like to look it over.
The main structure is over 100 years old. A dining hall addition, kitchen, and septic system was added in the mid 1970’s (all the Grangers I’ve spoken to remember using the outhouse that used to be out back). The building has been maintained since then but not kept up. We decided to put a purchase offer in for $50,000. The Grangers (all 12 remaining members) had a meeting and decided to accept our offer.
$50,000 is not much money to some people. But it is a small fortune to us. We do not have $50,000 to buy the Grange. But we have $10,000 of savings to spare and that is 20% which, I was told, makes borrowing money from the bank a whole lot easier.
Yes, you read that right,,, “borrowing money from the bank.” For the first time in my life I am going to get a conventional bank mortgage. But here’s the big difference—this mortgage is not on my house and my home will not be used as collatteral for the loan. The building will also be completely used for business, so all taxes, interest, upkeep, and so forth will be a business deduction.
When we went to the small-town bank in Moravia (which is, amazingly, still locallly owned), we found out that getting a loan would be no problem. We have no mortgage payment, no car payment, no credit card debt. I know this is unusual because a friend of mine who sits on the board of directors at another bank told me recently that the average person coming into that institution for a loan has $40,000 in personal debt—that’s not including mortgage debt.
Our monthly Grange mortgage payment will be around $300. That is less than many people pay on their monthly auto loan. So, what this boils down to is that I’m choosing to go into debt but it is a carefully measured and calculated debt that does not create a burden on our finances and, most importantly to me, I am not putting my house on the line. If I pay the loan off for the entire 20-year duration, I will end up paying approximately twice what I am borrowing. If I pay ahead on the principle with each monthly payment I can save thousands of dollars and pay the loan off in less time. That is what I intend to do, beginning with the first payment.
How, you might wonder, does buying a Grange Hall with only two acres help us get to the vision for a farm? Well, here’s my thinking on the subject...
A couple years back I checked into getting a loan to buy a parcel of land. I figured we would buy it, use it, pay it off, and then move there to build our house with money from the sale of the house we now live in. Marlene asked me where we live while we build the house. I told her in a tent, of course. ;-)
But I found out the bank will not loan money to purchase undeveloped property unless I put my house up as collatteral. Well, that is out of the question. But I can get a loan to purchase an old Grange hall in decent shape on a beautiful parcel in a nice location. I can use the land for growing garlic and other marketable crops. I can use the building for my book and plucker parts business. Marlene can use the space for making soap. The kitchen may or may not be useable for commercial purposes, depending on the county health department and their regulations and we are checking into that next week. We could even put an apartment in the place and rent it.
So the Grange would be useful to us and, hopefully, it will turn out to be a good investment. I would not hesitate to sell it for a profit if the opportunity presented itself. The bank’s appraiser called last night to ask a couple questions. I asked him if he thought I was paying too much. He told me that the lot with septic, drilled well, and electrical service was worth around $25,000. So the building is costing me around six dollars a square foot, which is downright cheap. That was good to hear.
I have always been wary of borrowing money, whether from a bank or anywhere else. But here I am borrowing. On the one hand, it makes me uncomfortable because I’ve never done this before and because I understand the uncertainty of our country’s economic future. But, even still, I feel a remarkable peacefullness about doing this. It seems perfectly right for us at this time.
Will this purchase of the old Grange hall help bring us a step closer to the dream of uniting home, family, and work in a rural place, as I hope for it to do? Or will it turn out to be one of the most foolish economic decisions of my life? Stay tuned. I will keep you informed as the story continues to unfold....
My oldest son showed me how to post pictures to this blog yesterday. I'll try to start posting some photos soon.