Lakefront Property

We received an offer in the mail recently to buy "Dockable Lakefronts" with a "New 2,500 sq. ft. Log Home Package!*" You no doubt noticed the asterisk right away. Oh, it was a "One Day Only Sale!" and it is "convenient" to where we live. Just minutes from the I-57 and I-24 interchange.

Interestingly, they don't give specific directions on how to get there. You call an 800 number first. I guess they want to check you out before you check them out.

Now to the asterisk. In very small print at the bottom of the page it indicates: "Log Home Package consists of land and building materials. Construction is buyers responsibility. Log home will differ from home shown. Some restrictions apply."

I was disappointed I apparently was not getting a brand new, beautiful 2,500 sq. ft. home on a dockable lake lot for only $49,900. Life just isn't fair.

There are paved roads and underground utilities including water, so that's good, but what extra expenses could possibly be added to this dream purchase? What does it cost to put a 2,500 sq. ft. log home "kit" together? And does it include plumbing? Heating & air conditioning? Appliances? Furniture? (Probably not) So, what is your guess the final cost of this convenient weekend getaway would be? As long as we're at it, let's figure in taxes, utilities and maintenance. Oh, did I mention it seems to be located about 162 miles from where we live?

I did a search on the Internet which indicates for some log homes the rough final cost is $150 to $200 per sq. ft. If you take 2,500 x $150 that would be $375,000. I'm not sure how the land figures into that and you could do some of the assembly work yourself or maybe just the interior. But a fairly reasonable wild guess would put the cost of this project at around $200,000 to $250,000. That's a far cry from "$49,000!" (Their exclamation point, not mine)

I'm not saying you should never buy a nice second home conveniently located to wherever you live. What I am saying is, do the math. Ask all the questions and get good answers. Then figure out how much more than the advertised price you're actually going to pay.

Oh, I forgot to add in the cost of having a dock built and buying a boat to use. It's so easy to overlook certain minor points when you're chasing a hot bargain. Did I also forget the insurance on the house, the dock and the boat? Boy, these things sure add up.

And another thing, if someone has already gone to all the expense of having one of these log homes built but they want to sell (maybe they forgot to add up all the expenses and can't afford it?) then you may have an opportunity to buy it at a better price. These things do happen.

If you've never moved into a newly construction home, visit with someone who has. They can probably tell you interesting stories about the additional expenses they had not anticipated.

Did I mention this area is probably "unprotected" for fire department services which means the insurance would generally be much more expensive? I wonder if the driveway off the road would need to be paved?

Again, I'm not saying never buy something like this, just make sure you do the math first.

Supplemental I: We recently received another "One Day Only" offer from this same operation for "Phase II". If I'm reading the promo correctly, the dockable lakefronts now start at only $39,900. (I guess waiting a few months for Phase II makes the 20% price drop worthwhile) But wait, there is now a special offer of a "Lakefront Estate & A New 2,500 Sq. Ft. Log Home Package!* (See note on asterisk above) Only $79,900." The $49,900 log home in the original ad is no longer listed separately. And, since there is probably a difference between a "Lakefront Estate" and a "Dockable Lakefront" it's hard to break the price down for a true comparison. But, this is Phase II so obviously things are selling.

Supplemental II: Another One Day Only offer arrived for Beautiful Wooded Estates with Direct Lake Access From Only $9,900! It seems amazing to me that an "Estate" can be purchased for so little money but that's what obviously makes it a bargain. They are offering 100% financing too. Oh, and "Unlimited Outdoor Activities" which is undefined but it does conjure up an exciting image in my mind.

Supplemental III: Another offer arrived indicating they are holding a Liquidation Sale on 8/27/11. Again they have 100% financing available. Prices "From Only $24,900! Comparable Lakefronts have Sold For Up to $130,000" (Sure glad we waited for the bargain pricing.) This is "Bank Ordered Pricing" whatever that is. They also quote CNN Money, July 2011,"A bright spot for bargain hunters: REAL ESTATE... making now a compelling time to acquire a second address." And SmartMoney, January 2011, "Smart people are buying REAL ESTATE." (For some reason I don't think SmartMoney capitalized real estate, but it works better for their advertising literature.) Again, no specific location information. You call and they'll let you know where they are.