Borrowing money to Buy land- advice

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Anonymous

I am trying to by abot 50 acres of farmland and woods 30/20 next to me. where is the best place to try and borrow the money. I would like to stretch it out to 30 years at first until my home is paid for( 10 years) then pay it off sooner. the big problen it seems like is the down payment I will only be able to come up with 5-10 % down. it seems like that it a sticking point for many lenders. My credit is great, my wife and i both have great jobs, and we have some collateral. any ideas would be appreciated. ps: i have two boys I would liike to see raise some cattle on it in the future, ( and their dad too)
 

dun

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Beginner beef":3t5swxwl said:
I am trying to by abot 50 acres of farmland and woods 30/20 next to me. where is the best place to try and borrow the money. I would like to stretch it out to 30 years at first until my home is paid for( 10 years) then pay it off sooner. the big problen it seems like is the down payment I will only be able to come up with 5-10 % down. it seems like that it a sticking point for many lenders. My credit is great, my wife and i both have great jobs, and we have some collateral. any ideas would be appreciated. ps: i have two boys I would liike to see raise some cattle on it in the future, ( and their dad too)

I've found that usually the local banks that you have done business with in the past are the best to try to work with. Or the seller carrying back a small second to make the difference, or for that matter, the seller carrying the whole note.

dun
 
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Anonymous

we just bought some more land & found the best interest rates & deals with the ag lenders. the kicker, as you mentioned, is amount down. most of them want 20%.
 

Campground Cattle

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C & C Land & Catt":wjfkexru said:
NOT FARM CREDIT!!!!!!!!!! We like to stick with our local bank.

The Texas Land Bank is locally owned out of Waco. It's getting to be a real problem here for the banks on Ag or construction loans for farm and ranch. The banks want to lend for subdivisions or housing in town. I recently started a new house on the farm. The bank in town made it so frustrating I said to heck with it and paid cash. The banks in our area are not concerned with the local farm or rancher any more.
 

hillbilly 2

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Sorry to go against C&C but I would go to Farm Credit, they got all my notes, never cheated me, yet.
If you refinance your house and tie on the 50 ac. you might not even need a down.
Property has to be ajoining.
You can get annual payments if you want.
After you've been with them a while you just call them and tell them how much you want and how long you want it and they cut the check same day no questions, no collateral.

Hillbilly
 

dun

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I guess we're pretty lucky in this area. We have at least two banks plus farm credit that are all anxious and agressive at getting farmers loans. You might also want ot look at USDA FSA, they have some new farmer loan programs.

dun
 

Tony Jr

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I bought 120 acres two years ago. I looked at local banks, and Ag and Farmers banks. Both were the same as far a interest rates, but one of the local bankers went the extra mile. She set up all the appraisers, keep in direct contact with the realitor, lined up all the little ode and end stuff and really handled everything 8) . Even meet us at the bank at 8 pm to close on the deal. If you do end up getting I will advise you to buy TITLE insurnce. :stop: It's fairly inexspencive and could save you a lot of headacke!!!!! :cboy:
 

RICHARD ADAMS

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try seller carryback...most people with assets are savvy enough to want to avoid capital gains.....if they won't carry full term try a note amortized over 30 with a 10 year balloon. Pay them 7.5% and it's a fair deal for both. I've bought a couple of crazy expensive california commercial building's this way and it worked out great for all.
 
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Anonymous

Hey just wanted to let you all know it looks like Im gonna get my land. We agreed on a price, and the local bank is going the extra to make a loan that I can handle. Of course itll be a while before I can affford to get into the cattle business. but Im closer every day. Thanks for the advice
 

TexasCountryWoman

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I'm glad you were able to get your land. My bank is small and local and every employee lives and works on a ranch so they understand. It makes it easy to get money. But won't you need to get some cattle on your land very soon for your ag. tax exemption? Or do you have a certain amount of time before that all kicks in?
 

Devin

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I agree with Hillbilly2. I have always had great service from Farm Credit. The first time I delt with them about 15 years ago I walked in got what I needed with just a signature and was out in under an hour. It wasn't much money then, but they treat me the same way today with larger amounts of money. Our local bankers aren't that great to deal with on farm matters in my opinion. Good luck on your purchase.

Devin
 
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Anonymous

Im new to this so Whats my ag tax exemption? Im having someone farm it on a cash rent basis for now to help cover the taxes and part of the payment does that qualify? can you write off interest paid like you can on a home mortgage?
 

Monica

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Any suggestions as to where you would go to find out more on Ag tax discounts? I have checked with our local court house, and they did not have any info on it. I think that it is a question they do not get asked any more.
 

dcara

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As TCW indicated you need to produce some type of ag product such as cattle or even hay in order to claim a ag tax or open space exemption. If you don't you will have to pay anual taxes based on the market value (ie. what you paid for it) vs. the ag value. Also there's the tax roll back issue where they can come back and hit you with back taxes if the property had an ag claim but had not met the production requirements before you bought it. This should be part of the price negotiation though.

Here in Texas the I think the rule is that property has to have been producing an ag product for 5 out of the the last seven years iin order to maintain open space exemption. Below is a link to a short paper on the Texas ag and open space exemptions. Your areas tax lawa may or may not be similar.

http://recenter.tamu.edu/pdf/1361.pdf
 

Beefy

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with some new farmer or young farmer loans you only have to put down 10% downpayment.
 
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