Lease to Own

[ncboy34]

Currently have a small scale herd. I run anywhere from 10-15 pairs plus some stockers periodically. My step dad has a friend that is thinking of getting out as his health isn't as great as it use to be. I had told him if he decides to sale any to let me know. Was also going to offer a lease on his pasture. I had thought about offering some type of deal where he keeps his cows but I do the work and gradually as we sale them it is like a lease to own for me to take over ownership of his cows while renting the pasture. Anybody have any experience on this and what those kind of deals look like? I'm not even sure if he is serious about getting out but wanted to have an idea of what to offer him if the opportunity presents itself.

 

[callmefence]

I lease alot of pasture, and I lease alot by trading services. And it's not uncommon for me to make a deal on a handshake.
I wouldn't get into something like your describing with a contract made by a team a lawyers. Buy his cows and lease his pasture.

 

[Brute 23]

That sounds messy IMO. I would have to agree on just buying them and leasing the land.

Might talk to him about owner financing the cattle. Breaking the income up over 5 years may be a good deal for the seller.

 

[SBMF 2015]

I have a similar deal with a land lord. I wrote the agreement. It's a five year deal.
I provide all the labor and inputs, but no rent on the pasture. The first year I get 20% of the calf check, and 20% salvage value in the cows. Year two it jumps to 40%. Year three it goes to 60%, but I start paying a % of the pasture rent. The fourth year I get 80%, and by the end of five years I will own his herd 100%.
I didn't have to barrow any money to buy them. No interest, and my land lord doesn't have to pay capital gains.