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Buying land

You better hope the CRP is already established. If not you must farm it for two years yourself before you will qualify as the landowner...UNLESS something has changed.

Also, you say that other's have it figured out...and you're trying to figure it out with your small income. I'm willing to be those that have it figured out can afford a potential loss. Most multi-farm owners I know are pretty "well-off."
 
Not that I'm an expert on this subject, but I did buy a farm in SE IA this past march compariible to what your explaining. There's a-lot of factors that go into purchasing property, but one of the main ones is the appraised value of the property vs. the selling price. The bank is only going to loan out 75% of the APPRAISED value of the property. If the property is selling for 2200/acre, and the appraised value is only 2000/acre, you'll need to come up wit the difference plus the 25% of the appraised value. For example:
100 acres (60 in non-tillable 40 in tillable)
Selling price is 2200/acre
Appriased value ( 2200/acre for the tillable, 1800/acre for the timber)
Total asking price:$220,000.00
Appriaised Total Value: $196,000.00
Down payment: 25% of Appraised Value=$49,000.00+Difference of Appraised and actual selling price=$24,000.00
Total Cash needed=$73,000.00
If the ground appraises for more than the selling price, that down payment decreases tremendously......just doesn't happen very often though. As far as taxes go, the timbered portion can be put into reserve so it won't be taxed. The tillable portion can be rented out, although 200/acre sounds fairly high for SE IA, unless it's really good ground. As far as the loan goes, BRONC was accurated in describing the ARM loan (3-5 year), although you might be able to get a fixed rate loan through an agricultural lending organization, as long as you're not using a housed property as collateral. Keep in mind that "Cash" can also be in the form of collateral such as other property including your current house or car/truck. There's a-lot of ways to accomplish your goals if you've got a good banker to work with. The best way is to just save the cash and use it so you're not tying up anything else. Keep in mind, land isn't going to get any cheaper, and rates are great right now. As far as buying a property to cover your payments, it ain't going to happen, although you can reduce your payments according to what type of property you purchase. Try and find something with at least 20 or 30 percent tillable....it'll help you financially as well your overall goal of maintaining deer on your ground. Hope this helps.
CRITTER
 
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> Holy crap I need to win the lottery. </div></div>

Or marry the right gal. /forum/images/%%GRAEMLIN_URL%%/grin.gif
 
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Iowa1</div><div class="ubbcode-body"> Basically I am trying to figure out if a guy can do it without a lot of cash going into it...so how much (%) of it do I have to have in crops to cover the payments? </div></div>

Not that I would ever want to be overly technical, but I did read your post and the main theme to it is summarized in the above quote. My reply answered it, granted, it was cynical and was not the answer you were looking for but it was factually accurate. /forum/images/%%GRAEMLIN_URL%%/grin.gif /forum/images/%%GRAEMLIN_URL%%/grin.gif /forum/images/%%GRAEMLIN_URL%%/grin.gif

Happy Thanksgiving & good luck with the land purchase. I really hope you can make it work!
 
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Saskguy</div><div class="ubbcode-body">Or move to where land doesn't cost the same as gold. lol </div></div>

Don't tempt us! /forum/images/%%GRAEMLIN_URL%%/grin.gif

Great thread that should answer questions that no doubt a lot of people have.

Interesting times right now for sure...used to be that one could do a re-fi on your home and either finance property or at the least come up with a substantial dn pmt.

Now with home values falling and banks jittery many homeowners no longer have the equity that they used to. Affects everything all the way down the line.

I bought my ground back when land values did take a huge drop...but the reasons land dropped then are very different then now. Buying land for "recreational use" (hunting)was almost unheard of...beautiful timber was lucky to bring a $150 an acre at auction because no one wanted it.

Farmers across the country lost their farms because of economic conditions that I doubt will ever see again.

In short...while land prices may dip slightly I really doubt they will ever have a dramatic decline. I also don't see any of this ground ever making the payments with normal financing...if it does...where do I sign?? /forum/images/%%GRAEMLIN_URL%%/grin.gif

Goodluck to those that endeavor to own their land, it's a daunting challenge that definitely has it's rewards. /forum/images/%%GRAEMLIN_URL%%/smile.gif
 
Save your coin now, land will come down, but that will not happen until the ethonal boom has burst and interest rates go up. It might be 10 years away though. Things in my corner of the state are so far out of wack that only the big guys with tons of cash or ground already paid for can handle these prices. IMO.
 
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Scott R</div><div class="ubbcode-body">Save your coin now, land will come down, but that will not happen until the ethonal boom has burst and interest rates go up. It might be 10 years away though. Things in my corner of the state are so far out of wack that only the big guys with tons of cash or ground already paid for can handle these prices. IMO. </div></div>


Remember those so called "big guys" will be interested in land then too. Land prices will come down some but never to what we have seen previously. There is only so much of it to go around and big money will always be willing to pay top dollar for the ground THEY want.
 
There is cheap ground out there, usually sold through an auction. I know of some that went for $1150/acre (very south central) last weekend at an auction. Great hunting ground on top of it.

Tim
 
interestingly enough my dad and i are looking into buying 160 acres that is about 120 tillabel (%75) and 40 timber (%25) i believe we have the purchase agreement and the said price is 2200 an acre giving us a grand total of 352000 bucks, i don't know all the details on down payment and interest rates but i will give you the low down when we move farther with the buying process, this is in north central iowa in floyd county.
 
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