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Love of the land
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<blockquote data-quote="Brandonm2" data-source="post: 125625" data-attributes="member: 2095"><p>If your sister can make $3000 an acre I would probably tell her to go ahead and sell. By my math that is $3.9 million. Once she sells her ranch, put your half on the market for $4.3 million (10% over the last sale). Then you can head further out and buy your own 3000 acre place in a more remote area for $3 mill (3000acres*$1000/acre). You will still have the same farm income you have now, won't have to pay your sister anything, and should have a $mill left over after the 1031 like kind exchange and the capital gains taxes to put into the retirement account). Whatever happens I would not get mad at your sister. This is supposed to be a business and when you can make more money by going out of business than by staying in business the business play is to sell. </p><p></p><p>I have never been to your county. BUT IF there is real future development potential you both may be better off holding. I have seen 80 acre ranches bring $2.2 million when the builders are ready for them. I don't know if that kind of growth is in your county's future; but you may want to sit down with your sister and a builder or suburban real estate broker and come up with your own development plan. $3.9 mill is pretty damn good money; but there may be a whole lot more money parceling it out in 50 acre parcels to builders every couple of years. </p><p></p><p>These "hunters" are real estate speculators. They believe that a $3.9 million investment (~$200g per year on a 5% note) is going to produce a sizable return at some point in the future. They probably believe that $3.9 mill is even CHEAP. I wouldn't give the this was daddy's, granddaddy's, and great granddaddy's land and they would want you all's grandkids to keep farming the land speech. That is simple sentimentality and I can't imagine anyone taking that seriously. GREED is the number one motivational factor in selling any idea. Show her how she can make MORE money by being the speculator than by being the patsy who sells her land cheap just before it's value skyrockets. </p><p></p><p>Again I don't know anything about your county in Texas or what land is bringing or what kind of growth is possible there; but try this on for size.... find a developer-builder who will pay $600,000 for fifty acres ($12g per acre is chump change when you are going to build two $200g houses on that acre and the $600g worth of property is only $30g/year in interest while you build the houses (worth $22 mill worth of saless over the next 5 years) with a four year option on the adjoining 50 for $660,000. MOST builders will either eventually exercise that option or sell it to someone who will. Over the next 10 years you all could sell 300-400 acres in 6-8 pieces for $3.9-5.5 mill and you have jacked up the valuation of your remaining 2200 acres into the stratosphere where you can either sell out for $9-10,000 an acre or keep doing 20 to 50 acre deals everytime the mood hits you while continuing to enjoy your remaining ranchland. Remember that the average acre of land increases in value 7% a year and in a growth area it can move up at 3 to 8 times that. So land generally is making you more money sitting there than money in the bank is making AND you don't have to pay taxes on that valuation increase (unlike bank interest). These speculators believe they are going to be multi-millionaires off of this simple $3.9 mill deal. They could be WRONG or they could be right and all you and your sister have to do is figure out how to do what they want to do.</p></blockquote><p></p>
[QUOTE="Brandonm2, post: 125625, member: 2095"] If your sister can make $3000 an acre I would probably tell her to go ahead and sell. By my math that is $3.9 million. Once she sells her ranch, put your half on the market for $4.3 million (10% over the last sale). Then you can head further out and buy your own 3000 acre place in a more remote area for $3 mill (3000acres*$1000/acre). You will still have the same farm income you have now, won't have to pay your sister anything, and should have a $mill left over after the 1031 like kind exchange and the capital gains taxes to put into the retirement account). Whatever happens I would not get mad at your sister. This is supposed to be a business and when you can make more money by going out of business than by staying in business the business play is to sell. I have never been to your county. BUT IF there is real future development potential you both may be better off holding. I have seen 80 acre ranches bring $2.2 million when the builders are ready for them. I don't know if that kind of growth is in your county's future; but you may want to sit down with your sister and a builder or suburban real estate broker and come up with your own development plan. $3.9 mill is pretty damn good money; but there may be a whole lot more money parceling it out in 50 acre parcels to builders every couple of years. These "hunters" are real estate speculators. They believe that a $3.9 million investment (~$200g per year on a 5% note) is going to produce a sizable return at some point in the future. They probably believe that $3.9 mill is even CHEAP. I wouldn't give the this was daddy's, granddaddy's, and great granddaddy's land and they would want you all's grandkids to keep farming the land speech. That is simple sentimentality and I can't imagine anyone taking that seriously. GREED is the number one motivational factor in selling any idea. Show her how she can make MORE money by being the speculator than by being the patsy who sells her land cheap just before it's value skyrockets. Again I don't know anything about your county in Texas or what land is bringing or what kind of growth is possible there; but try this on for size.... find a developer-builder who will pay $600,000 for fifty acres ($12g per acre is chump change when you are going to build two $200g houses on that acre and the $600g worth of property is only $30g/year in interest while you build the houses (worth $22 mill worth of saless over the next 5 years) with a four year option on the adjoining 50 for $660,000. MOST builders will either eventually exercise that option or sell it to someone who will. Over the next 10 years you all could sell 300-400 acres in 6-8 pieces for $3.9-5.5 mill and you have jacked up the valuation of your remaining 2200 acres into the stratosphere where you can either sell out for $9-10,000 an acre or keep doing 20 to 50 acre deals everytime the mood hits you while continuing to enjoy your remaining ranchland. Remember that the average acre of land increases in value 7% a year and in a growth area it can move up at 3 to 8 times that. So land generally is making you more money sitting there than money in the bank is making AND you don't have to pay taxes on that valuation increase (unlike bank interest). These speculators believe they are going to be multi-millionaires off of this simple $3.9 mill deal. They could be WRONG or they could be right and all you and your sister have to do is figure out how to do what they want to do. [/QUOTE]
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