Buying some of Grandma’s land

[Hogmauler]

I’m going to have to guess at the numbers since you didn’t say....

The note is going to be about 75-80 a year, but you are hoping that the 50k keeps coming in...

You are probably putting somewhere around 10-15% of your income away for retirement, and hope that that is enough to cover the difference?

Factoring in risk, and with everything else I don’t know....the answer is no.


It puts you way too far out there on a limb.

One hiccup, lose the land lease or lose your job....and the bank owns your down payment and Granny’s land.

My guess is that if you could really afford this, you would have already bought it.
Or if you were ready to buy, your budget would help you figure out how many acres to buy, not how much your wife’s cousin’s wife wants the family to sell to fund whatever project she has going on before Granny dies....

Boom!
Sound familiar? Don’t force a square peg in a round hole brother. What this brother is saying is wisdom as well.

[be12hunt]

Without knowing your ex as t financial situation, I can’t say. For me I would focus on the value of the land. If the $3,000/acre is a great deal I would be considering options for how to finance it. If the $3,000/acre is market value, I wouldn’t take the risk.

[camoclad]

A little intronets research shows central south Dakota, average producing crop land down right now from about 4k/acre to 3k/acre.

Also, extension service shows average cash rental about $100/acre for average producing crop land.

OP, how many acres are arable and can be rented? Again, with values slightly down over the past 5 years, low intrest rates and Bill Gates.... do it! Lol

[camoclad]

Sad to say that I thought about “what if you offered 1000 acres to gates at $6000 an acre?” As a possible scenario

Sad and scary

[Pedernal]

Don’t use it in as an investment in place of your retirement and go in to be deal as corporate deal Incase something goes wrong. Best of luck with what ever you decide.

Can I buy 100 acres? 50-50 farm land and trees ��

[bowfishin fool]

I’m a sucker for land. I’d say do what it takes to make it happen.

To me land is legacy for your family and I HATE seeing ranches split up.

Between leasing for crops and leasing for hunting I would imagine you could get her paid for fairly easily and then add your nut in to help pay it down quickly. If the family is going to sell it, you might as well buy it and if you can’t manage the note down the road, sell off what’s necessary.


All that said your personal finances need to be in order first. Are you debt free and do you have a sizable emergency fund? How much retirement do you have currently and what will that look like if you let it compound until your retire? (Rhetorical).


If your personal finances are in order I’d make it happen.


Sent from my iPhone using Tapatalk

[HogHunter34]

I’m going to have to guess at the numbers since you didn’t say....

The note is going to be about 75-80 a year, but you are hoping that the 50k keeps coming in...

You are probably putting somewhere around 10-15% of your income away for retirement, and hope that that is enough to cover the difference?

Factoring in risk, and with everything else I don’t know....the answer is no.


It puts you way too far out there on a limb.

One hiccup, lose the land lease or lose your job....and the bank owns your down payment and Granny’s land.

My guess is that if you could really afford this, you would have already bought it.
Or if you were ready to buy, your budget would help you figure out how many acres to buy, not how much your wife’s cousin’s wife wants the family to sell to fund whatever project she has going on before Granny dies....

X2
And as far as funding land over retirement is not a great idea unless you have a great pension coming or you have done better than most on saving for retirement by age 40
I’d be very cautious

[JTCowpoke]

I agree with most of the guys saying you probably cant afford it. I think the land note will cost you between 10-12K/month or between 120-144k per year. Even with 50k per year income that leaves 70-94K per year you need to make up for ( but you will save some tax money because you can write off the interest on the note as an expense). Plus if you really could afford it you would know and wouldn't be asking here on the green screen.

[GarGuy]

I'm confused.... are you not in line to inherit a share?

[wytex]

Any chance you could get some oncome off of hunting on the property ? Maybe sell some
deer hunting access for a couple of folks or look into an outfitter lease with restrictions on take.
When you retire will, you have assets in Texas to sell if you move up North? I would talk with a good financial expert about all your possibilities . They can run some numbers for you to consider.

I'm thinking Grandma has some immediate family that might inherit, not grandkids.

[redfishted]

I say if you can afford the down payment and the 2500 or so a month you will have to come up with each month out of pocket, I would do it. Not sure this pertains to you, but my advice to you would be to pray about it, pray a lot, helps me sort things out. I just bought a piece of property, kind of overstepped myself a little bit, and it’s been the best thing I’ve ever done forced me to become more efficient pay more attention to details and it’s worked out great.

[curtintex]

I'm confused.... are you not in line to inherit a share?

Agreed, but you know how multiple heirs can screw things up.

[Txtourist]

To answer some questions;
Rent is low as grandpa liked to help out young farmers since he had the same treatment when young. Land price is lower than would be on the market, but there’s no family deal.
There are 7 kids under Grandma, starting at about age 70 down to late 50’s.
There are over 45 grandkids and well over a hundred great grandkids. No one farms there and only one cousin who is my hunting partner hunts there. I love about 6.5 hours away.
I have some residential rental property I was planning to cash out this summer. That, combined with savings and some other real estate proceeds I could put 350k down.
The other 3 parcels are already promised to the farmers currently renting them. The guy farming the piece I really want has always been kind of a pain. I don’t think I’d have any issue renting to other farmers for a fair market price. I thought about renting it by the week for pheasants in the fall and eventually putting a small shack up.
It is doable financially, at a glance, but I’m a bit hesitant after ‘08. My wife and I own a mid size cabinet and millwork shop, so right now things look great. My fear is a housing slump combined with a big dip in crop prices causing an absence of renters/rent.
Ideally I’d like to have the crop rent and hunting cover the note barring xtraordinary circumstances, in which case I’d have to cover the note which I could handle for up to two years. Family is pressing grandma to sell, saying it’s too complex to rent and distribute the money. It’s silly in my opinion and I’ve offered to manage it, but I think there’s some pride in calling the shots and some who are in more in need of the money.
I lost my sister in 2012, it’s just me and my 3 boys after my parents are gone. I spoke with my dad about it and he’s encouraging me to buy it, but he doesn’t want to get involved financially
He could buy it, but has his own hunting property and things he’s into. He’d love to come hunt, but not willing to drop 1.8m willing. His property is about 160 acres, it has a lot of deer and pheasants, but there’s no comparison. Literally 120” max deer versus Saskatchewan strain giants going over 200”

[redfishted]

And if you go through capital farm credit you will get a dividend check once a year for the first five years then twice a year after that should be able to make up about 2-3 months of your out of pocket expenses per check.

[DUKFVR]

I had the same reservations when we 1st bought. Worried about this or that. I will say us buying was the best thing I have done. At some point if you always worry & put off ,you will never go forward. Like I mentioned earlier, if you are financially able ,go for it. Worst case scenario is you maybe have to sell some of it or all of it, but if price is right, you will make money. I have twice on selling & moving up. You will also be amazed at how much you can save by cutting down on other activities, less eating out ,etc.