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Post by lawrencecountyhunter on Mar 13, 2019 11:32:55 GMT -5
I know a few people on here have taken the plunge and purchased their own property. Here's my situation:
Farm near me is likely going up for sale within the next year or 2. Owners are elderly and in poor health, rumor around the neighborhood is kids plan to sell it when they're gone. There is a decent farmhouse on the property the old folks are living in, a metal garage, and a few old barns/sheds. Some timber, some tillable, some pasture, there are cattle on part of it currently. If I were to buy it I would continue to run cattle on it.
If I were to sell my house today, I believe I have enough equity to put at least 25% down on the place, and could make the 30 year mortgage payments (I'm 31 years old). This is assuming it sells for what I believe it to be worth; if they want more, I would have to walk away.
I've also been looking at some USDA loan options. They have a "Down-Payment" loan where they'll loan 45% of the purchase price to qualifying new farmers at 1.5% interest (current rate). If I were to put 25% down from the sale of my current home, finance 45% through USDA at 1.5%, then finance the remainder through a commercial lender, interest savings would be very significant over the life of the loan.
I intend to talk to the local USDA loan officer here soon to get some more information. In the meantime, does anybody on here have any experience with USDA farm loans? Anything specific I should ask/discuss when I meet with the loan officer?
FTR, both my wife and I are interested in trying to do this, but we're at the very beginning stages of research. I'm simply trying to get a decent plan formulated and figure out what my options are prior to approaching the current owners about a possible deal.
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Post by esshup on Mar 13, 2019 13:14:06 GMT -5
Just pray that the kids want to sell it in one lump rather than break it up in parcels to try and get more $$. Talk to the kids soon. If they sell to you without a realtor, they can save you both some $$ for not having to pay any commission. Even if they DO go thru a realtor, they can tell them that they have a fish on the line and want you excluded from the commission if sold to you.
That's how I bought this place, I knew the owner and told him that if it ever came to them selling, talk to me first before listing it.
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Post by jbird on Mar 13, 2019 16:14:56 GMT -5
Heck talk to the elderly couple now. Buy the whole thing, but the house, or have an agreement to allow them to live their. Many old farmers are just as concerned about the land being cared for and remain an active farm. Especially if the kids don't live close or have no interest. The folks who farmed it don't want to see it turned into houses or the like and if all the kids want is the money, then let them have the money, while they know the land will still be cared for. Many older couples fear the kids fighting as well so it can simplify that also. Lots of land and farms are sold that never hit the open market...especially if they feel they are getting a fair deal AND they feel it is going to someone who will care for the land. Now some are just the opposite and want every dime they can scratch out...so don't be surprised if your run off the porch either! If you have a history with these folks, hopefully a good one, then that will certainly help.
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Post by esshup on Mar 13, 2019 18:19:26 GMT -5
jbird, that's a very good suggestion. Even possibly as a land contract for now, then he can refinance after they pass and he's ready to sell his place.
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Post by greghopper on Mar 13, 2019 18:19:45 GMT -5
I look up the land on public records so you can see who owns it the exact acres and the assetsed value.
A lot good info on public enternet sites on who own what land and the acres owned.
Another thing the less people you tell you are looking at so and so property the better off your be of buying/getting it.... loose lips skinks many a ship!
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Post by brokenarrow on Mar 13, 2019 19:52:33 GMT -5
I look up the land on public records so you can see who owns it the exact acres and the assetsed value. A lot good info on public enternet sites on who own what land and the acres owned. Another thing the less people you tell you are looking at so and so property the better off your be of buying/getting it.... loose lips skinks many a ship! Your absolutely right. I seen this at the Indianapolis War Memorial today.
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Post by lawrencecountyhunter on Mar 13, 2019 20:27:25 GMT -5
Thanks all. My family knows them pretty well, been neighbors all their lives. I don't know them personally, just know of them.
I plan on talking to the old couple about it as soon as I know I can get the financing.
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Post by ukwil on Mar 14, 2019 4:55:28 GMT -5
Good luck, hope you're able to get it.
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Post by duff on Mar 14, 2019 4:57:39 GMT -5
Good luck. Sounds like a fun adventure.
I have known of many that have contracted with the owners for a year up to 5 before getting the loan to pay off the owners.
When you get the place let me know where my tree stand will go!
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Post by featherduster on Mar 14, 2019 7:52:22 GMT -5
Are you wanting this property for business or recreational? If you buy this property with the house and you intend to live in it, how much will it cost to make it comfortable and appealing to your wife.
Where will the neighborhood be in 10-20 years, neighbors, they can make or break a dream property. Do you have enough $ for all the little things that come with owning property. Sleep on this long and hard because this is a forever deal or a divorce maker.
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Post by steiny on Mar 14, 2019 9:15:00 GMT -5
If you already have a local bank, I'd start there first, AG lending is a big part of most Indiana banks lending. When we bought our first farm I was in similar shape, had some cash but needed to sell our house in order to afford the farm. We worked with our local banker and they gave us a one year "bridge loan" which got the farm purchased plus gave a little extra to remodel the old farm house. I worked on the old place for several months to get it ready to move into, we moved, then put our house up for sale, whole process probably took nine months. When our house sold, we put together all the down payment we could, rolled any interest owed on bridge loan in and did a mortgage. Also set up our mortgage to be paid in two semi annual payments following when we received the cash rent payments on crop ground.
The tillable ground will come in real handy as the cash rent will generate annual income to help you pay taxes and the mortgage. You could consider making the pasture ground tillable. There are also some CRP programs out there that pay better than cash rent if you can get in on one, however most CRP programs require you own the place for at least one year.
I was about your age when we did the above and we barely scraped by the first couple years, but it was one of the better decisions I've ever made. We now own a farm free and clear that is easily worth 5X what we paid for it and have generated enough money thru cash rent and CRP programs to pay for the farm many times over.
Talking to those landowners now is an excellent idea, just approach it in a very "non pushy" manner and give them time to think things over. Take one of your parents for first meeting if they know them well. Keep the realtors out of the deal and save yourself some money.
Good luck !
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Post by lawrencecountyhunter on Jan 29, 2020 12:56:47 GMT -5
Update, almost a year later.
Nothing ever came of that other property. As I thought about it, we could probably make the payments on that place, but that would've been about it. A fair price probably would have been a bit beyond our means.
We did just sign a purchase agreement on another place though. It's got a house and 46 acres, and several parcels of public land ranging from 2-5 miles away. We're getting a traditional mortgage since we'll be living there.
Of course this is pending inspection/etc., but paperwork is signed and stuff is rolling forward.
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Post by deadeer on Jan 29, 2020 13:47:23 GMT -5
Way to go! Hope it all comes together for you! Land ain't getting no cheaper.
When I bought my shack, it was on 40ac of rolling woods. They split off house and one ac, then said I could buy the remaining 39ac for $386k. Lol.
So they ended up dividing it into 4 pieces a few years later, and it sold combined for near $700k. Now has 4 new high roller homes outside our windows.🙄 Land is now minimum $15k/ac in our area. The new norm is to buy woods, have it logged and cut down, than build your house. Getting ridiculous!!!
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Post by featherduster on Jan 29, 2020 13:54:04 GMT -5
Update, almost a year later. Nothing ever came of that other property. As I thought about it, we could probably make the payments on that place, but that would've been about it. A fair price probably would have been a bit beyond our means. We did just sign a purchase agreement on another place though. It's got a house and 46 acres, and several parcels of public land ranging from 2-5 miles away. We're getting a traditional mortgage since we'll be living there. Of course this is pending inspection/etc., but paperwork is signed and stuff is rolling forward. Good for you BUT remember what I said in my earlier post it could be a divorce maker. A bit of advise: folks want to buy a piece of ground because it is or has been a good hunting area and then the first thing they want to do is start changing things around. Live there for a few years see what the wildlife thinks of you and how much change it can except. You can spend your money on your home and family and make little changes over time as the money comes along.
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Post by HighCotton on Jan 29, 2020 13:59:00 GMT -5
Good for you LCH! I hope everything works out well for y’all! Reminds me of this: My Pops always has a Dutch saying, “Geduldevint!!!” Roughly translated, “Prudence (patience) always wins”!!!
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Post by lawrencecountyhunter on Jan 29, 2020 14:23:45 GMT -5
Good for you BUT remember what I said in my earlier post it could be a divorce maker. A bit of advise: folks want to buy a piece of ground because it is or has been a good hunting area and then the first thing they want to do is start changing things around. Live there for a few years see what the wildlife thinks of you and how much change it can except. You can spend your money on your home and family and make little changes over time as the money comes along. Thanks. I think we'll be fine. The payment will not be much more than what we pay currently. My wife loves the house, it's the farmhouse style she's always wanted. The property has a good sized creek as the northern boundary, a lot of bottomland ag fields to the west, a big block of timber to the south, and hay fields to the east. About 2/3 of the property is early successional forest with a couple of overgrown pastures that could almost be considered forest. The remaining 1/3 is mature forest with a lot of maple, beech and hickory. Not many oaks. There should be plenty of food all around for deer. I'm going to try and focus on giving deer the best cover, which shouldn't be difficult as thick as some of the property is. Initially I plan on making some walking paths through the briar tangles, and that will be about the extent of it for a while.
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Post by featherduster on Jan 29, 2020 14:38:42 GMT -5
When you become a property owner all your ideas about hunting will change. Before I became a property owner I always harvested as much as I legally could and now I only take what I need. Look at your property for more than just deer, see if it has wild berries, mushrooms both spring and fall and maybe figure out a way to dam or dig out the creek to create a pond.
Put your non-tillable ground into Indiana habitat it will save you hundreds in taxes but research it first there are some stipulations.
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Post by Sasquatch on Jan 29, 2020 15:47:34 GMT -5
If you can do it, move with Napoleonic speed. A piece up the road from me appeared in the real estate listings and I went for it the next day. It had been sold before I even got there.Probably was in the works before the book came out. If someone gets the early scoop, nothing you can do, but it appears this time YOU might be the one with the scoop. Good luck!!!
Ditto on being covert too. When I was a kid we had to move and got a good deal on a piece of land from a friend. Found out later a local that knew we were poor and desperate STILL tried to buy the place out from under us. Real nice guy.
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Post by duff on Jan 29, 2020 15:53:30 GMT -5
Let me know which stand I can hunt from!
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Post by budd on Jan 29, 2020 16:57:25 GMT -5
Hard to believe what land down there is going for now!!! Can still get a 40 up here for around $800 a acre. Go west 20 mile and it doubles. Anywhere with in 15 miles of Bemidji or GrandRapids land is much higher.
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