Hunting land prices.....

Discussion in 'Iowa Whitetail Conference' started by iowaboy, Oct 19, 2018.

  1. IowaBowHunter1983

    IowaBowHunter1983 Super Moderator Staff Member

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    I think if you dive into the details more people could afford ground than they think… even if very small to start. Sticking to OP… it has been an interesting couple of years to say the least. I watch this very closely. The rise of property prices has also brought an influx of new companies. That is an exponential amount of new agents all trying to do the same thing. You can’t disconnect these two happenings; they are very much interrelated IMO. The old ROI numbers on rec ground just don’t seem to apply anymore. A few years ago 4% ROI on rec ground was kind of the floor in most cases. Now, when it comes to rec ground, 4% is portrayed as a deal to jump on. Wow… that’s a big shift in mindset. I will always be looking, but personally, I’m super cautious right now.

    As far as tillable ground goes….. deals on that for sure, but the floodgates have not opened. I keep thinking the dam has to break at some point but it seems to just trickle. Commodity prices have been down for several years and I don’t think it can go on forever. Either they come back up or more people are going under or (I think). The demographics on Iowa owned farms are super interesting if you look them up. Lots of ground is going to change hands in the next 10-15 years. That’s a guarantee.

    Lots of theories on where things are headed, but that can all change in a blink of an eye. I do know ground is the one thing that you can’t just “make more of”. Demand, over the long haul, will always go up.
     
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  3. Daver

    Daver PMA Member

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    In response to part of what IowaBowHunter1983...a good amount of land was purchased in the past 5-7 years with CASH, as farmers were largely flush there for a few years in response to the booming ag sector at that time. Commodity prices have been low now for 3 or 4 years and things are much tighter for farmers now than they were 5'ish years ago. But, since there was relatively little money borrowed to purchase the ground at higher prices, there isn't as much risk since they by and large do not owe the bank.

    Having an asset that has a relatively low return is one thing...having an asset that you still owe big money on and prices drop...well that's a whole 'nuther issue. I don't see a large "dam break" coming on ag land, since it isn't as highly leveraged as it was in previous times when low commodity pricing led fairly soon to farmers bombing out.
     
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  4. sep0667

    sep0667 Land of the Whitetail

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    Good thread, a lot of good info and thoughts here. I am very interested in purchasing something in the future and enjoy the input provided.
     
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  5. Buckdown89

    Buckdown89 Member

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    Out of all of you that own these “deer farms,” how many of them were owned by family prior to your generation? How many of you ACTUALLY saved up enough of your own hard earned cash and are paying for it out of your own pocket? Of the people that actually “saved” enough money how much help were you given from your family prior to owning said ground? I know student loans don’t pay for themselves and some people pay as much as a house payment... it’s hardly possible to graduate college, find a job, pay off your student loans/save enough money for a peice of ground...of these people how many of you have families? Wife? Children? Or a child?
     
  6. Bowman D

    Bowman D Member

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    How do you get a 25 yr fixed loan on rec ground without a home on it? I always thought they required balloons or shorter length loans with huge down payments? What am I missing?
     
  7. Daver

    Daver PMA Member

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    Amount of farms owned by anyone in my family = zero, then and now.
    Saved up/earned my own money to fund purchase of farm = true, every penny.
    Amount of money given to me from family members = zero...in fact, my parents took money from me while I still lived at home and I was paying for virtually everything I had from 16 years old on.
    Wife = one, who worked her way through college as well, no debt when graduated. Me...I owed some, but paid it back years ago.
    Kids = two. Both of whom also graduated with high honors from college and had zero debt when done, as they used savings, worked and earned scholarships too. As parents, we did help them some, but in the main, they paid for their own way.

    Seriously, it is possible to do everything you mentioned above, bolded, BUT...and here is where people differ...you probably cannot do all of the above AND combinations of the following...
    Drive brand new cars/trucks, live in $350k on up houses, spend significant funds on: booze, girls, clothes, shoes, CELL FREAKING PHONES, video games, motorcycles, expensive boats, fancy furniture, expensive vacations, high end home electronics, etc, etc, etc. (BTW, I am not saying that you do any of these things, as I do not know you. But I do know multiple people that do a combination of these things and then complain that they have "no money".)

    Choices. Drive. Hard work. It can be done.
     
  8. Daver

    Daver PMA Member

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    For us, we took a mortgage on our house, our primary residence, and used it to buy the farm. Low interest rates and interest payments were deductible too. Disclaimer...we had paid off the house early, so we very close to completely debt free when we bought the farm...about 18 years ago now.
     
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  9. Bowman D

    Bowman D Member

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    I did the same thing on a very small parcel when I was young. I was hoping their was another loan option out there I didn’t know about. My big question I’ve always wondered about is......how much cash would you have to put down on a piece of ground with a mix of timber & tillable (that would be cash rented, no input costs) to “break even” on the payment? Disclaimer: I do realize the ridiculous amount of variables here, but assuming good credit, using average cash rents, etc..... any thoughts??
     
  10. SB3

    SB3 Member

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    My parents gave me something much more than land or cash.... it's a good work ethic and discipline. I came from nothing but wouldnt change a thing, in fact I thank God for the way I was raised and my parents. If you work hard and are smart with your money anybody can do it. Have a family and yes make other sacrifices to own land, it took me till I hit my 40's but I look at it like this. I live within my own means and normally people are going to spend on things that make you happy. Don't have a new truck or boat or etc, I choose to have land. If my future changes, I can bail out and sell it and likely profit from it. Can't do that with all the material deperciations.
     
  11. SB3

    SB3 Member

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    Farm Credit Services is one example of a lender. I put 20% down and have a 20 year fixed rate for vacant land.
     
  12. MarkF

    MarkF Member

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    I’m married without kids, my wife and I got zero help financially,have no family with farms, paid off all of her school loans and were able to purchase a house and a Farm. I’ll tell you what we did do tho, both of us work 60-70 hours a week,drive crappy old cars without payments and save our asses off. One thing we didn’t do is make excuses why other people have things that we weren’t willing to work/sacrafice for.
     
  13. 2-bucks

    2-bucks PMA Member

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    Did not grow up poor but not rich either. Dad was a plumber, mom a part time waitress. I paid/borrowed 90 percent of my way through college. Three kids, one through college, two at home. Bought 120 acres at 43. Not easy but blessed with a good job, two really with my wife's job also. So not a penny given to me. Hard work, hopefully good decisions and a goal can be achieved. I'm sure some people inherit land but it is far from the only way to get it!
     
  14. Swampy_44

    Swampy_44 Member

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    for those of us that do not own land, but very much wish to do so. let's talk about your loans for your land. how much did you need to put down? how many yr Loan is it? im a dad with 2 children 2 and 5. next month i will finish off paying my student loans, which was $550 a month. I own both my vehicles a 2006 ford fusion for a work vehicle has 225k on it, and a 2001 dodge ram as my hunting vehicle. I would basically have hardly anything to put down. I pay more in child care than I do in my mortgage. I have the drive, let's here some advice.
     
  15. Huntinguy

    Huntinguy Member

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    I didn't have to put anything down if I didn't want to. I did put about 10% down to help on payments. I got a 20yr loan from local bank for 4%. It's 134 acres and had a 90 tillable which made payments. This was 5yrs ago but they are still out there but u got look real hard. It would be super hard to be able to buy another one but always looking
     
  16. 2-bucks

    2-bucks PMA Member

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    Swampy, I'll take a shot. First a few thoughts/statements. 1. From your post it sounds like you are already making much better than average financial decisions to put yourself in better and better positions as time goes on. 2. I am a big Dave Ramsey fan so if you ever listen to him my advice may sound similar. 3. Not knowing your age and income (and I don't want to) keeps this pretty general. So, here it goes... I would increase my mortgage payments as much as possible. If there is any chance you can make a farm payment you might be able to double your mortgage payments. More is better. This cuts the time to payoff drastically!!! Once the mortgage is paid off I'd save 20 or more percent for a down payment and then shop, be patient, but strike quickly when the right deal comes up. It took me 3-4 years to find the right place for me.

    At this point you could remortgage for lower rates and a write off or not. Either way I'm only going to have one mortgage because I'm not putting my family/house in danger if something horrible happens like I lose my job. A paid off farm and house mortgage does have a slight risk but my belief is that with a good deal and improvements, I could quickly unload the farm at a profit and pay off the house if needed. Hope this helps.
     
  17. hans1

    hans1 Active Member

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    My deal was quite different bought my first farm by working remote guiding jobs in Alaska would be gone for 3-5 months come back and use the money for a down payment. Owned 2 farms before I owned a house. Let those farms appreciate then sold though a 1031 exachange and bought others.
    As to down payment neeeded that is variable on a lot of factors ,ie credit,equity and the property itself. Also different banks are prone to loan more on certain types of land. For new buyers it is important to be sure they buy with value in mind. It is a hard time to get in the game now there is a ton of money out there now.
     
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  18. DMarley83

    DMarley83 DMARLEY83

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    Well assuming most here has the same story. Like all of the above I was fortunate enough to work 7 days a week for years, not drive new trucks, nor many other things most of us do without thought. 10 years later Still driving that same old truck today. About 450k mi on her now. Was raised with no family money nor land but had some major goals. Pulled the trigger on my first farm at 25 and yes handed over a very hard earned 25k cash.

    Over the years I have had many regrets. None of these regrets have been buying land!!! Matter of fact the biggest regets were just about the exact oppisite. I like to reffer to as "non buyers regret". Farms I passed on due to my conservative beliefs. Not one single land purchase have I regretted yet!

    Any of us can do it if important to us. Prices are rising yes, I believe they will continue to rise. Not what I like to see but realize that is the nature of a limited supply. That being said I will gladly invest my earnings in this incredible resourse we hold here in Iowa! There is no other investment I have ever heard of which brings such great joy to me and my family. No stocks, 401ks, housing, nothing. Nothing better I can think of!

    Follow the markets, familliarize yourself with sales not just listings and when you find what you are looking for "lay it out there".

    I recently heard a saying I now live by. If you have at least half a brain and are willing to work hard "You will run out of health before you run out of $!!!!)
     
  19. Wapsi Tree

    Wapsi Tree Well-Known Member

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    An extra $550 a month is a pretty nice shovel. Now, what are you going to do with it?

    A. Dig a hole
    or
    B. Make a pile.
     
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  20. Hardwood11

    Hardwood11 Well-Known Member

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    Start small if you have to. Be creative.
    4 boys, 3 in college ... truck payment, house payment, I now own farms in two states.

    No help from anyone, other than bank.
    Took a chance at age 28 and never looked back.
    It’s not easy, you have to have some guts, an understanding wife, and some knowledge of a good buy!!

    My best tip is buy something that has income that helps make the payment!
     
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  21. hillrunner

    hillrunner PMA Member

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    No old money help here either. No student loans for me, school wasn't my forte. My wife came with student loans , so I did get to pay for those.

    I started my first business at 21 with a $3,000 loan from the bank. The work was arduous and the hours were long . By the time I was 28 we were living in a new house on our own hunting property. I now own a couple hunting properties, all done with no outside financial assistance.

    Obviously by reading the responses here you can see a theme, it revolves around hard work and discipline.
     
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