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re: OB Farmers
Posted on 2/27/19 at 7:31 am to White Bear
Posted on 2/27/19 at 7:31 am to White Bear
I’ve bought and sold several since about 1994 and yes most have been bought around appraised value and all have sold in that area and have done well. One for sale now was purchased in 1910 so not sure if it was bought at or below appraised value.
Contrary to what people believe there isn’t a lot of ag land just being wholesale sold. People aren’t stupid. I’ve had several offers on any I’ve had that were lowball and I just wonder what people are thinking. Because I live in the city doesn’t make me a dumbass. But I guess a blind hog might find an acorn once in awhile and run across a landowner in a bind. I’m just not that landowner.
I have money in the market and it does ok from time to time but it doesn’t interest me. I like owning dirt. It excites me and I’ve always done better with it. It’s a satisfying feeling to walk a piece of property and know you own it.
Contrary to what people believe there isn’t a lot of ag land just being wholesale sold. People aren’t stupid. I’ve had several offers on any I’ve had that were lowball and I just wonder what people are thinking. Because I live in the city doesn’t make me a dumbass. But I guess a blind hog might find an acorn once in awhile and run across a landowner in a bind. I’m just not that landowner.
I have money in the market and it does ok from time to time but it doesn’t interest me. I like owning dirt. It excites me and I’ve always done better with it. It’s a satisfying feeling to walk a piece of property and know you own it.
2
Posted on 2/27/19 at 7:46 am to Martini
quote:Thanks for the response. I've been looking to buy but land prices seem to always outpace my inflows.
I’ve bought and sold several since about 1994 and yes most have been bought around appraised value and all have sold in that area and have done well. One for sale now was purchased in 1910 so not sure if it was bought at or below appraised value. Contrary to what people believe there isn’t a lot of ag land just being wholesale sold. People aren’t stupid. I’ve had several offers on any I’ve had that were lowball and I just wonder what people are thinking. Because I live in the city doesn’t make me a dumbass. But I guess a blind hog might find an acorn once in awhile and run across a landowner in a bind. I’m just not that landowner. I have money in the market and it does ok from time to time but it doesn’t interest me. I like owning dirt. It excites me and I’ve always done better with it. It’s a satisfying feeling to walk a piece of property and know you own it.
Posted on 2/27/19 at 8:01 am to White Bear
Keep looking and be patient then buy the piece that fits your numbers. You don’t have to own an idealistic farm. Just don’t buy just to buy. And don’t buy thinking it’s a get rich quick. It’s a long term reality for the most part, not day trading. I don’t buy to sell, just occasionally I think it’s time or find another piece I like better and want.
Posted on 2/27/19 at 8:45 am to Decisions
quote:
If interest rates continue to creep they will apply more downward pressure
Plus, if CWD spreads throughout Louisiana and Mississippi. You are going to have guys freaking out. I think the recreation guys have largely driven prices high.
Not to mention with the closing of paper mills Timber is not as attractive now.
There could be some pressure on Land prices in the future.
Posted on 2/27/19 at 9:00 am to lsu13lsu
quote:
I think the recreation guys have largely driven prices high.
That plus CRP/WRP essentially put the floor in on ag land for years. There have been recent changes made to CRP payment amounts and maintenance requirements that will seriously affect the attractiveness of it moving forward.
Posted on 2/27/19 at 9:17 am to Martini
So true
quote:
nstitutional investment firms are where you will get the top dollar. Not a local farmer or not likely. If listing land for sale in addition to local it needs to be nationally advertised.
Posted on 2/27/19 at 9:29 am to Decisions
quote:Interesting. Do you have a specific source for these changes? thx.
There have been recent changes made to CRP payment amounts and maintenance requirements that will seriously affect the attractiveness of it moving forward.
Posted on 2/27/19 at 9:29 am to Martini
quote:Thanks again.
Keep looking and be patient then buy the piece that fits your numbers. You don’t have to own an idealistic farm. Just don’t buy just to buy. And don’t buy thinking it’s a get rich quick. It’s a long term reality for the most part, not day trading. I don’t buy to sell, just occasionally I think it’s time or find another piece I like better and want.
Posted on 2/27/19 at 9:50 am to White Bear
CRP Page
Under CRP payments -rental payments- you’ll see that rates will also figure in local dryland cash-rent or cash-rent equivalent, i.e. it won’t be higher than what it can be rented for to farm. This has not always been the case to my understanding.
In addition to this more maintenance mowing and whatnot is going to be required than previously. I don’t feel like hunting that link down atm.
Under CRP payments -rental payments- you’ll see that rates will also figure in local dryland cash-rent or cash-rent equivalent, i.e. it won’t be higher than what it can be rented for to farm. This has not always been the case to my understanding.
In addition to this more maintenance mowing and whatnot is going to be required than previously. I don’t feel like hunting that link down atm.
Posted on 2/27/19 at 11:12 am to fishfighter
quote:but it does mean they can sell it for money.
Just because someone owns a bunch of land, it doesn't mean they are rich
Posted on 2/27/19 at 12:26 pm to CarRamrod
quote:
but it does mean they can sell it for money.
Unless they owe a bunch on it. No different than owning a home. I know a lot of people that don't have much equity in their McMansion and are leveraged to the hilt.
Posted on 2/27/19 at 12:28 pm to Midtiger farm
quote:
places closer to the river and going north into the delta they will have 100+ acre fields with no levees
But they're doing furough irrigation, right?
I don't see how you could control water levels in a flood irrigation system without levees.
Posted on 2/27/19 at 3:55 pm to Cowboyfan89
quote:
But they're doing furough irrigation, right?
I don't see how you could control water levels in a flood irrigation system without levees.
No it’s 100ac zero grade
Even in South LA ive seem 200ac fields that have a couple 50+ ac cuts
Row rice still needs to have slope, they are just taking out the levees
Posted on 2/27/19 at 5:08 pm to Jack Daniel
quote:dat gubment cheese.
If that’s the case, how are all the farmers driving $250k tractors and $60k trucks?
Posted on 2/27/19 at 5:39 pm to White Bear
It was in the late 80s
Easy math tells me the diff of a $700 acre avg investment vs a $3500 value today is a diff of 2800 per acre.
I’m not sure what y’alls guidelines or definition of inflation is .... but a safe bet id assume 2800 hundred over 30 years isn’t it.
Easy math tells me the diff of a $700 acre avg investment vs a $3500 value today is a diff of 2800 per acre.
I’m not sure what y’alls guidelines or definition of inflation is .... but a safe bet id assume 2800 hundred over 30 years isn’t it.
Posted on 2/27/19 at 5:46 pm to Decisions
LOL
Do you not understand that the note you owe digs into your ROI?... sir at the very least it has impact on how quickly you can bump that ROI.
Doesn’t really matter anyways, land prices are so high now nobody is financing without huge dowb payments.
If you farm in Louisiana you need it in most places.
We have top yields on corn cotton And beans.
Land leveling and irrigation would def cut into that ROI you just spoke of.
Drainage work was done and paid for long time ago.
If you have choice dryland sandy loam dirt you know what I’m Referring to.
Do you not understand that the note you owe digs into your ROI?... sir at the very least it has impact on how quickly you can bump that ROI.
Doesn’t really matter anyways, land prices are so high now nobody is financing without huge dowb payments.
If you farm in Louisiana you need it in most places.
We have top yields on corn cotton And beans.
Land leveling and irrigation would def cut into that ROI you just spoke of.
Drainage work was done and paid for long time ago.
If you have choice dryland sandy loam dirt you know what I’m Referring to.
Posted on 2/27/19 at 5:55 pm to Martini
You have too much trash land in your current property you’re trying to sell.
Unfarmable acres skews the price per acre people want for their property.
If you have 419 acres and you’re asking 4-5k per acre you have to factor in wasteland acres... when have say around 80 that’s exactly that.
Drives cost up of the land that produces to higher than its worth.
Especially on a marginal piece of dirt (yield wise)
Unfarmable acres skews the price per acre people want for their property.
If you have 419 acres and you’re asking 4-5k per acre you have to factor in wasteland acres... when have say around 80 that’s exactly that.
Drives cost up of the land that produces to higher than its worth.
Especially on a marginal piece of dirt (yield wise)
This post was edited on 2/27/19 at 6:01 pm
Posted on 2/27/19 at 6:42 pm to p&g
I don’t know what the frick you are talking about. Land I have for sale now is in Bell County Texas and is significantly larger tract than that and I don’t consider wasteland acres. I price according to market value.
Posted on 2/27/19 at 7:10 pm to Martini
Ok
Thought you had some in cenla
I familiar with the temple area
Thought you had some in cenla
I familiar with the temple area
This post was edited on 2/27/19 at 7:13 pm
Posted on 2/27/19 at 7:47 pm to p&g
quote:
Do you not understand that the note you owe digs into your ROI?... sir at the very least it has impact on how quickly you can bump that ROI.
Alright, so what if I set a place up on a 30 yr note as opposed to 15? I’ve reduced that note, but have I really come out ahead? Of course not. I’m paying way more in interest than I’m gaining in liquidity/cash flow.
When I look at buying a piece of land I always do so with the intention of not paying it off early and making the smallest down payment necessary to get the best interest rate. Why? Because at these current interest rates it’s in the buyer’s best interest to borrow as much as they can stomach and spread out capital.
I’ll give you an example: say you have 400k. You COULD put all 400k down on a $1M property that is returning 7%, borrowing the other 600k at 4%. That puts you bringing in 70k and paying 24k in interest yearly, thus netting 46k.
OR you could put 200k down on TWO $1M properties returning 7%, borrowing the other 800k at 4%. That puts you bringing in 140k and paying 64k in interest, thus netting 76k. Two thirds more money made for the same cash invested.
By doing this I am increasing my COC (cash-on-cash).
quote:
Land leveling and irrigation would def cut into that ROI you just spoke of.
Land leveling and irrigation is literally the best investment I as a farmer can make right now. Hands down. It will prop up any previous ROI you originally had because it will ALWAYS be better. Even on choice dirt.
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