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Post by Freeborn on Dec 30, 2019 5:57:15 GMT -6
If you were to buy a farm in an agricultural area what metrics do you guys use to evaluate the value of agriculture land and also the non productive land that would come with a farm purchase? With Ag land are you focused on CPI (Crop Productivity Index)? Does the terrain effect value, what other measurements do you use to assess value? How about the non productive land that would be purchased as part of a Ag land purchase, do you use tax assessed value? What steps do you use to determine if a sale is fair, reasonable, a good deal or a terrible deal? 50-60% of area comps is what I try and shoot for. That way when shit goes south, you can still get your money back. Never look at CPI. When you say 50-60% your trying buy properties that are that percentage of comparable properties in the area? So you are going to auctions or looking for distressed properties? |
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Post by Bwoods11 on Dec 30, 2019 15:41:34 GMT -6
Tough to buy a farm that cheap. I’m
Sure it happens.
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Post by biglakebass on Dec 30, 2019 15:48:04 GMT -6
This is like reading about grafting beef jerky on a tree or whatever it is. Haa. So over my head.
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Post by MoBuckChaser on Dec 30, 2019 19:20:00 GMT -6
50-60% of area comps is what I try and shoot for. That way when shit goes south, you can still get your money back. Never look at CPI. When you say 50-60% your trying buy properties that are that percentage of comparable properties in the area? So you are going to auctions or looking for distressed properties? Not really looking anymore, but did that for almost 40 years. The last one was in Allen dale Missouri. Bought 260 acres of 2/3 crop, 1/3 woods with mile of river frontage at auction about $1800 an acre. Sold the 60 acres across the road for $2850 an acre the day of the sale. Kept 200 acres and rented out the tillable for $275/acre for 5 years. Then sold the 200 for $500k minus a one time sales commission of $14k. There were 30 guys at the auction all wanting to buy a piece of the farm, not the whole farm. When they sold it off In pieces then lumped it together they added $5K to the total of the 3, I bid once and bought it all. On that day, and it doesn’t always happen. No one had the money to buy it all in one chunk. But it don’t always happen that way, but you have to keep going to auctions in case it does. I have 100 properties in my life that happened on. Just have to be there. I was on that day. |
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Post by biglakebass on Dec 30, 2019 19:27:38 GMT -6
Damn.
I hope to have 1 property in my feeble life.
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Post by batman on Dec 30, 2019 19:30:18 GMT -6
Sounds like you paid closer to 70 or 80% of the the value.
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Post by MoBuckChaser on Dec 30, 2019 19:35:42 GMT -6
Sounds like you paid closer to 70 or 80% of the the value. Not after rent. |
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Post by MoBuckChaser on Dec 30, 2019 19:39:38 GMT -6
Sounds like you paid closer to 70 or 80% of the the value. You telling me you wouldn’t spend $468K to make $60K in one day? |
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Post by batman on Dec 30, 2019 19:40:31 GMT -6
Sounds like you paid closer to 70 or 80% of the the value. Not after rent. You cant claim to buy something at 50% of value post rent. |
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Post by batman on Dec 30, 2019 19:41:33 GMT -6
Sounds like you paid closer to 70 or 80% of the the value. You telling me you wouldn’t spend $468K to make $60K in one day? I would do that every day but I would not claim to purchase something at 50 - 60% of value and then go fudge rent into the background. |
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Post by MoBuckChaser on Dec 30, 2019 19:46:38 GMT -6
You cant claim to buy something at 50% of value post rent. I can claim anything I want. Sorry, if this one didn’t satisfy you. It was a huge money maker at your 80%. My 50%. |
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Post by MoBuckChaser on Dec 30, 2019 19:59:22 GMT -6
You telling me you wouldn’t spend $468K to make $60K in one day? I would do that every day but I would not claim to purchase something at 50 - 60% of value and then go fudge rent into the background. Why not? After 5 years of rent I had less then $200k into it, cash in my pocket via the 1031 broker was $486k at closing. that look like 70-80% to you? It don’t to to me, and that’s all that counts. Lol |
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Post by batman on Dec 30, 2019 20:02:37 GMT -6
If you bought if for 468K at 60% of market it was worth 780K. You sold some day of and the bulk 5 years later for 671K.
You made bank on rent but unless land values tanked your 50-60% of value suggestion seems flawed.
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Post by MoBuckChaser on Dec 30, 2019 20:22:51 GMT -6
If you bought if for 468K at 60% of market it was worth 780K. You sold some day of and the bulk 5 years later for 671K. You made bank on rent but unless land values tanked your 50-60% of value suggestion seems flawed. Lot of guys lose bank, I never do. You can nit pick my 9th grade math all you want. I am laughing all the way to the bank. Lol |
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Post by Freeborn on Dec 31, 2019 7:56:42 GMT -6
Sounds like you made some great money any way you look at it. What caused the land to be at such a good value, recession, bad commodities, divorce?
For the purpose of trying to find a place to hunt and not flip I doubt I would ever get close to 50-60% against comps.
If I buy a second farm it would probably be a few years away as I need to digest the new OZ house first. We have stuff to pay for including landscaping, furniture etc. My wife is already in overdrive on some of this stuff. There will be a parade of contractors and vendors coming to our place for the next couple of years.
Still, I’m a long-range planner so I like to start looking now so I can educate myself. If I fell into a perfect situation (Spectacular comps, more Ag then Timber and the right size) then my timing would change.
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