How do you find the funds to start your off-grid Homestead? This is the part that stops most people dead in their tracks. It can be a daunting task, but it is doable. Even for those of us who don’t have much to begin with. It will take some creativity. It will take hard work. What dream doesn’t?
I hope you already had the chance to read our previous post on How to start an Off-Grid Homestead in Hawaii if You Don’t Already Live Here. It can be a daunting task to build a home anywhere, especially in Hawai’i, but together we’ll make it happen. I have compiled a short list on 6 ways I raised money to start a homestead project. I hope it helps.
- The Bootstrap Method. Personally, I hate debt. Living off grid without debt is so freeing. I do not have to worry about bills, therefore I am super flexible on how I can earn money.
I earned the money for my land through a little bit of hard work, and keeping my tastes simple. With every paycheck, I made a strict budget and made sure I saved at least 20% of my income. Sometimes I saved more. In fact, I considered that 20% as an expense that I paid as soon as the paycheck came in. I never missed it. I had to learn how to live off less, which is easier to do than you may think. A great way to create a spending plan is by setting up a FREE account with Mint.com. They make setting budgets and tracking your spending really easy. I wish it was around when I was younger.
When I finally earned enough money, I set out looking for land. I could have spent all the money I had saved to put down on land only, but I went with buying a cheaper parcel which could allow me to have some cash left over to begin making some improvements.I can’t say that these first few months were easy. I lived in my van for over a year. I had no money. No power. Crazy flying cockroaches everywhere. But it gave me the motivation to get my home done. Without the need to pay rent, I was able to quickly save up enough cash by working a few odd jobs. Btw, if you are willing to work, there is plenty of opportunities to make money out here. A good landscaper can easily start off making $25/hr up to $45/hr. A substitute teacher gets up to $140 a day.
After a few years, working, saving, living in my van, I saved enough and scrounged enough material that I had a home. It was nice going slow. After all, we’re living in a tropical paradise. Why work your okole off?
2. Traditional Loan. The local Credit Unions are a great source of funding for your new dream home. These banks regularly work with folks who are wanting to turn vacant land into their dream home. They have land loans which typically have 5 year terms with a balloon payment due on the 5th year unless you move forward with building your home and secure a construction loan. The best construction loan that you could get would be an owner-builder construction loan. The terms are super favorable. Great banks to check out would be CU Hawaii or Big Island Federal Credit Union.
3. Crowdfunding. This is a new area that deserves some exploring. With a good story and a solid network of friends and family, you may be able to raise a significant amount of funding through the many types of crowdfunding sites. Sites like Gofundme, Indiegogo and more. Raising money this way would be best if you have some solid online marketing skills, but if you do have the right network, it may be easier than you think.
4. Create a Tenancy in Common. This technique has been on the rise in recent years. If you have not already purchased land or already have a larger parcel of land, you can form a Tenancy in Common and sell off “shares” in the land to others, bringing your costs down and supplying you with the cash needed to build. Essentially you are subdividing your land without going thru the formal process. So instead of having one owner on the title, you can have multiple parties be on the title to the land.
It kind of works like this. Say you have 10 acres. You form a Tenancy in Common and include 3 other parties on the title, having 4 shares in total (one belonging to you). You can structure it how you like. One person can control 50% of the property and the other 3 can split up the remainder. Maybe you organize it where each share allows for 1 acre of land for each shareholder with the other 6 acres remaining as communal space. As a shareholder, I can develop my one acre within the parameters set by all the shareholders. If I ever decide to sell, I can sell my share, but not the whole property. It can be a little confusing. Learn more about Tenancy in Common.
If you have enough money to buy a larger parcel of land, but not enough to build, this is a great way to fund that construction. Plus, if you get the right folks in there, you will already have a solid community of people to support one another on your Hawaii homesteading dreams.
5. USDA Rural Loan All of this starting to get a little daunting? If you haven’t purchased anything yet, getting a property that already has a home may be the best option, especially if you are thinking of financing anyways. You can always find a property that has room for an ‘ohana unit if you really feel like you must build, but at least you have a place while you build. You may even be able to rent out the main house one day!!
BONUS-USDA EQUIP Grant This option is for those who already have the land and need help developing it. However, you must be starting a farm business and have at least $1000 in provable sales from the previous year. This qualifies you for the USDA EQUIP Grant. This grant is amazing. I was lucky enough to qualify for it on a project I worked on in the past. It paid for compost, mulch, greenhouses, trees, farm fertility, hedgerows, fencing and so much more. It wasn’t a loan either! It was a grant, no need to repay the money. Be sure to look into this funding opportunity if you had the chance.
No Excuses
There you have it. With so many various ways to raise money these days, there should be no excuse that can keep you from achieving your homesteading dream. It may take some work. It may take lots of saving and sacrifice. But believe me, once you get your chance to live the Off-Grid lifestyle, you’ll be thanking yourself that you put the work in to achieve your goals. So get out there, make a plan, set some goals, and achieve your dream. If I can do it, so can you.
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