Rec Land Companies

[Sligh1]

Whats some of these average incomes of people that buy "hunting farms " ? Combined and/or alone. Wife ? Kids? Mortgage ?

I made “decent $” outta college. Put my self through and worked a ton during school. Got out with no debt and saved $30k since I was 12 years old (no joke) on lawn jobs all the way to internships to fixing up cars and selling them. I saved a little more, got a roommate & bought 80 acres 3 months after I graduated. The “roommate” made the room in my budget to make the farm payment. That’s how tight it was . It can be done!!!!!
No kids or wife til later. I lived tight financially and worked extra jobs. Saved like lunatic. Had some things been different (married earlier, made less $, saved less) would have delayed me a year or 2. It can be done if it’s priority (which it isn’t and shouldn’t be for some people) - 100% can be done though.

**i know recent Land owners who make as little as $30k a year. Seriously. I know a few who make a little more than that but have built up to several hundred acres. I know 2 on other end of spectrum- some who have a “B” in the net worth. Insane but incredibly rare and other than folks like Ted Turner for example, don’t own massive amounts of land. Nice size but nothing crazy. So- I guess- get ur income between $30k and $1,000,000,000 & i think u can buy land

 

[Hardwood11]

Those are just examples I know Farms are way higher in some areas.

 

[MN Slick]

In my opinion many of the inflated listings are folks that are not really intersted in selling but rather throwing shiite against the wall in a hot market . In tother words it's the sellers setting the prices. Realtors don't get paid unless a piece of ground sells so why would they want to list at a price that won't sell? Competition for listings is high so of course some are willing to take these listings with the hope something pans out or the seller come to their senses.

I've sold a farm through Whitetail Properties. My agent was all about pricing it fairly and reduced his commission to get a deal done. No doubt they set the bar with their marketing approach which is why I chose to list with them rather than a local realtors who have no clue how to sell a farm.

 

[HawkeyeStateHogs]

Great thread!

I follow land sales pretty closely and have for several years. There seems to be a lot of people with a lot of money right now, I guess due in large part to the stock market. I think that has a pretty big impact of rec land sales. The part I can't wrap my head around is tillable ground prices. Commodity prices are back down where they've been historically and with record crops year after year they aren't going up. How are farmers still paying 6-9k for ground? How can that possibly pencil out?

We need a big interest rate hike to bring asset prices back to reality!

 

[Hardwood11]

Great thread!

I follow land sales pretty closely and have for several years. There seems to be a lot of people with a lot of money right now, I guess due in large part to the stock market. I think that has a pretty big impact of rec land sales. The part I can't wrap my head around is tillable ground prices. Commodity prices are back down where they've been historically and with record crops year after year they aren't going up. How are farmers still paying 6-9k for ground? How can that possibly pencil out?

We need a big interest rate hike to bring asset prices back to reality!

It will not pencil out, but some of these farmers have big farms with very little debt, so they average the cost out of another 160 or 320 and make it work.

*Last year (16) a farmer in MN that I know average 248 bushel corn on all his acres. It said they had a very profitable year, so the yield was so high, it did pencil out. Not the same this year in (17) especially in parts of IA.

 

[Wapsi Tree Rat]

I don't have much experience in real estate sales, but I have worked in the foreclosure industry for 10 years. The rumblings are that if grain prices don't take a hike, and they likely won't, there's going to be a lot of farm foreclosures in the next year or two. I also have a friend in the agriculture lending business and he confirms this. He's says he's starting to see an uptick in guys needing loans that don't have the equity to borrow against. This could be the reset in land prices soon, or maybe some good short sale prices in the near future. Hate to see it happen that way, but that is likely what's coming.

 

[Wapsi Tree Rat]

I made “decent $” outta college. Put my self through and worked a ton during school. Got out with no debt and saved $30k since I was 12 years old (no joke) on lawn jobs all the way to internships to fixing up cars and selling them. I saved a little more, got a roommate & bought 80 acres 3 months after I graduated. The “roommate” made the room in my budget to make the farm payment. That’s how tight it was . It can be done!!!!!
No kids or wife til later. I lived tight financially and worked extra jobs. ..........

You proud of that story? You should be. That is the very definition of hard work and dedication. Well done.

 

[IowaBowHunter1983]

Keep in mind..... stock market has tripled since 2009. Dow at 7000 to like 21000 now. Rec prices in some pockets..... I saw some land in 2009-ish maybe $1700???? On the low end. Maybe 2500 on high end. Even back then- I personally thought it was a “good buy”. Stock market has tripled and the lowest priced stuff of 2009-ish has MAYBE doubled in that time. Maybe. Reasonable to good was still at $2-2400 back then.... that stuff still is $3-4K now. Yes- pockets that have better or worse scenarios.

BUT..... let’s boil this down to simple investment figures...... land actually has not gone up as much and high as stock market. Still say land is a far better buy and smarter investment.

Always room to buy small parcel to start. Always time u could jump in stock market. I’ll stick with land.

For simple investment figures....
Roughly an investment that puts out a nice/higher roi of 10% will DOUBLE in value every 7 years. Keep in mind- inflation is generally 1-3% depending on time period as well.

Hunting land over the last 10 years has not gained that much. It’s grown at a lower rate. Ag land grew at huge booms (double digits, 20%++ in a year for example) 2011 to 2014. So- by the #’s - guys are NOT getting wiped out due to rec land prices vs other investments. Tillable has also corrected back down the last couple years. Land “usually” is slow or steady/gradual in its rise and fall. Single digit fluctuations the most common. Historically. If anything - the #’s say stocks are the “insane price” You can still find reasonable neighborhoods and ground for reasonable prices. I’d trust data I posted above over some of the hot air I hear out there. There is some insane prices being paid but there’s usually more to the story on that. Like above mentioned. Keep those dreams alive- very real and possible to do this.

All true, only thing i'll add that makes real estate so incredible when things go "right" ....

If you leveraged land at 4:1 (25%) down in 2009 and the value of the land doubled, you really made 5 times your money.

$100,000 invested in index funds turns to $300,000. Profit of $200,000

$100,000 down payment on a $400,000 farm that's now worth $800,000. Profit of $400,000. PLUS whatever income you've been getting. PLUS serious tax advantages. Conservatively a 5 to 1 profit.

 

[Hardwood11]

Most of the millionaires in my county, own land, they may have made millions on their business, but I cannot think of one, that does not then diverse into at least some real estate eventually.

Of course, a farmer can be a millionaire on paper--ag land assets, and show a loss in the past few years.

 

[HawkeyeStateHogs]

It seems obvious what is on the horizon for farmland values, and possibly rec ground to an extent, but we shall see. Bubbles tend to pop...

 

[IowaBowHunter1983]

It seems obvious what is on the horizon for farmland values, and possibly rec ground to an extent, but we shall see. Bubbles tend to pop...

It seems.... But other things to look at as well.
Example...... Look at what has been happening is Des Moines. Major growth thats not stopping. Look at land values within an hour of Des Moines. Then look at bigger cities in region. Kansas City, Minneapolis, etc. Then look at land values within an hour. (WAY higher than ours)

There may be a bubble but long term.... It's going up and will keep doing so.

 

[BJohnson]

"Look at land values within an hour of Des Moines" - this was key for me when I finally pulled the trigger on a farm at what I determined was a "fair value". Corrections and retracements in asset categories happen every so often. Buying land to flip every 3-5 years is probably a speculative "investment". I think (or hope) rec farms within a certain distance of larger metro areas will have a willing buyer on a consistent basis over the long term. Buying land should be a minimum 10 yr commitment in my eyes.

 

[JoeDirtyGirl]

A little more data to chew on...