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Message
Buying farm land/acreage - Need some tips and tricks
Posted on 4/8/20 at 1:26 pm
Posted on 4/8/20 at 1:26 pm
Afternoon Outdoor Board,
Typically I stay on the SECrant and recruiting boards, but find myself looking to the expertise of the Outdoor board regarding a new hobby of mine: Land Acquisition.
Background is in investing/finance so I'm well versed in analyzing balance sheets/income statements but don't know dick about farm land, acreage, forestry, farming, hunting etc.
Ideally, I'm looking for between 100-500 acres of mature wooded forest land to be used for timber, hunting, and potentially maybe farming or keeping livestock.
So a couple questions if the powers that be would allow me:
1) What are the best books, sites, learning(s), that I can find to educate myself on the prospects of acquiring land
2) Are there a list of best practices when speaking with the seller's about their property to better differentiate parcel A from parcel B
3) What are the biggest mistakes people fall into when buying and investing in farmland/non-residential or commercial real estate.
Appreciate everyone for their responses.
Typically I stay on the SECrant and recruiting boards, but find myself looking to the expertise of the Outdoor board regarding a new hobby of mine: Land Acquisition.
Background is in investing/finance so I'm well versed in analyzing balance sheets/income statements but don't know dick about farm land, acreage, forestry, farming, hunting etc.
Ideally, I'm looking for between 100-500 acres of mature wooded forest land to be used for timber, hunting, and potentially maybe farming or keeping livestock.
So a couple questions if the powers that be would allow me:
1) What are the best books, sites, learning(s), that I can find to educate myself on the prospects of acquiring land
2) Are there a list of best practices when speaking with the seller's about their property to better differentiate parcel A from parcel B
3) What are the biggest mistakes people fall into when buying and investing in farmland/non-residential or commercial real estate.
Appreciate everyone for their responses.
6
Posted on 4/8/20 at 2:33 pm to GregYoureMyBoyBlue
Whats your ultimate use for the land? Is this just for recreational use or ultimately do you plan to subdivide and use it for an investment...
Its such a broad topic, obviously price and location are driving factors. On a tract that large I would attempt to get mineral rights in the sale.
I literally identify tracts of land that I like and contact the owners listed on the appraisal district websites and ask if they have interest in selling. Some will respond back some won't. Those who do respond are usually fairly eager to listen.
Go into each property with a max of what you are willing to spend and don't go over it. Don't get caught up "needing" any individual piece of land. Once you pay over market it takes a long time to recoup that investment.
Research the taxes on it. Make sure you are still ag exempt and if you are what you need to remain that way. In texas we have roll back taxes when you take it out of ag (you pay the balance of the last 3 years expemtions)
Just a few thoughts...
Its such a broad topic, obviously price and location are driving factors. On a tract that large I would attempt to get mineral rights in the sale.
I literally identify tracts of land that I like and contact the owners listed on the appraisal district websites and ask if they have interest in selling. Some will respond back some won't. Those who do respond are usually fairly eager to listen.
Go into each property with a max of what you are willing to spend and don't go over it. Don't get caught up "needing" any individual piece of land. Once you pay over market it takes a long time to recoup that investment.
Research the taxes on it. Make sure you are still ag exempt and if you are what you need to remain that way. In texas we have roll back taxes when you take it out of ag (you pay the balance of the last 3 years expemtions)
Just a few thoughts...
Posted on 4/8/20 at 2:54 pm to GregYoureMyBoyBlue
As a general rule, from what I’ve seen personally, land prices are absurdly high for what the income on them is. Better off in bonds
Posted on 4/8/20 at 3:00 pm to GregYoureMyBoyBlue
Odds of cash flow on farm land is slim and none even if you cash buy. Not a timber guy but I bet it’s same or worse than row crop.
IMO, land is a poor investment if only want income but your mileage may vary.
IMO, land is a poor investment if only want income but your mileage may vary.
Posted on 4/8/20 at 3:26 pm to GregYoureMyBoyBlue
I have over a hundred acres. About 80 is timber. If I call up a logger he’ll go out and paint up a bunch of giant oaks and give me maybe 25 bucks each...and make a total mess. I could have someone come out and hay the rest and they would either pay me 15 bucks a bail or give me half.
But this is my point...I’m sitting on my deck that I built with my kids 5 years ago...they are here too, girls 13 and 15. We also built our dream house here. It is a stunning day here and the redbuds and plums are in full bloom. We hunt morels every morning. We are planning our turkey hunts for next week. The pool will be opened soon. My oldest cleaned the chicken coup this morning and we have 4 new chicks in the brooder and 30 or so eggs in the incubator. Our freezer is full of deer and turkey and dinner tonight is one of our chickens with mushrooms and asparagus cream sauce. We have trails through the woods and my treestands have names. It is a wonderful life here and I could not be happier to be raising my children here. The school is excellent. My town has no stoplights and 900 people.
We make money other ways, off the land is very difficult unless you have a large cattle ranch. I suppose it depends how one defines hobby or investment.
But this is my point...I’m sitting on my deck that I built with my kids 5 years ago...they are here too, girls 13 and 15. We also built our dream house here. It is a stunning day here and the redbuds and plums are in full bloom. We hunt morels every morning. We are planning our turkey hunts for next week. The pool will be opened soon. My oldest cleaned the chicken coup this morning and we have 4 new chicks in the brooder and 30 or so eggs in the incubator. Our freezer is full of deer and turkey and dinner tonight is one of our chickens with mushrooms and asparagus cream sauce. We have trails through the woods and my treestands have names. It is a wonderful life here and I could not be happier to be raising my children here. The school is excellent. My town has no stoplights and 900 people.
We make money other ways, off the land is very difficult unless you have a large cattle ranch. I suppose it depends how one defines hobby or investment.
Posted on 4/8/20 at 3:30 pm to Mizooag94
Sounds like a slice of heaven Mizoo.
The king ranch cattle operation has lost money for years. One of the heirs was sacked because he was a cowboy and still wanted to cowboy.
The king ranch cattle operation has lost money for years. One of the heirs was sacked because he was a cowboy and still wanted to cowboy.
Posted on 4/8/20 at 3:44 pm to GregYoureMyBoyBlue
In the south the fastest income turn around in timber would be pine< I'd assume.
To get your best price you will want to be closer to a mill than further.
To get your best price you will want to be closer to a mill than further.
Posted on 4/8/20 at 4:13 pm to GregYoureMyBoyBlue
quote:
What are the best books, sites, learning(s), that I can find to educate myself on the prospects of acquiring land
It’s like any other property in this respect. Find out who owns the land and cold call them if you have a particular piece in mind. If you’re just looking for deals pick your advertising medium.
quote:
Are there a list of best practices when speaking with the seller's about their property to better differentiate parcel A from parcel B
I might ask about any easements or historical activity, but honestly you should do your own research. The main thing you want to know from the owner is price. They might try to hide/mislead/forget about any blemishes the place has in an effort to make a deal.
quote:
What are the biggest mistakes people fall into when buying and investing in farmland/non-residential or commercial real estate.
Too many to list here but for starters: have it surveyed, check the zoning, ask about easements/commitments/restrictions, and most importantly don’t fall in love with any piece. Seriously. It takes away any leverage you might have had previously.
In all honesty you should probably read the car buying guide someone put out on the Money Board. It’s not all applicable but a lot is.
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