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Caustic Burno

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Brute 23":4kyefb5h said:
JSCATTLE":4kyefb5h said:
I payed 1200 an acre for my land .. I sold 60 k worth of timber off the place... I bought a 10k dollar dozer.. I have half in pasture now . Took me 3 years and I should have the other half cleared by this time next year... I agree that land is an expence however you are building equity so in a since that'd be makin profit. As would paying off a tractor or other equipment.. unless u were born into a family that handed down a large amount of land it would be hard to make a living at first.. but most things take time to get off the ground. I believe you can either cut your own hay or rotational graze to eliminate paying for feed...

Technically when you pay off you land and equipment that is not profit. You gained an asset, or added value, to your net worth. You would have to sell those items for more than you paid to make a profit.

Any time you talk about debt you have to factor risk in to the equation also.

Risk is high right now. Kinda like neighbor ask one time what did I think his bull was worth. I said what you can get at the auction barn today, might be higher or lower tomorrow. He replied it was a 3000 dollar bull I said it wasn't unless he could find someone to pay that price, he was only worth hamburger at the barn.
Net worth in land and equipment buy's no groceries. It is not what you make or spend it is what you save.
We are on the verge of world depression right now as in the 30's look at the housing market and that will take years to recover. Look at the global economies and the countries in collapse.The dollar is being devalued by the fed through que1 and 2 and have talked about 3. Ca. is broke Harrisburg Pa. filed for banckruptcy the list goes on.
 

JSCATTLE

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I bought my land 4 years ago ..I don't feed my cattle feed or purchased hay... I lease land also .. as of the first of this year I had 160 head of cattle paid for... I use or lease 800 acres...I have a good friend who specializes in selling ranch property... When someone dies and he gets a new listing I talk to the land owners usually it is when someone dies and the kids live out of town ... Most of the time they allow me to use the land to keep it up. Basically I stock my pastures to about 1/3 of normal stocking rates...I didn't run out of grass this year because of this ... Hay was hard to come by so I sold about 80 cows that money is in the bank.. ill buy back in when the rain starts... Because my pastures aren't dirt and ill also buy sale barn cows because I'm not one to buy a cow because she's pretty or one with papers ... They all sell by the lb so why buy a 2000 dollar cow private treaty when she's gonna weigh out at the sell in a year when drought forces you to sell out... That's where a bunch of people in Texas get into trouble .buying cows over market value .
 

Brute 23

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ddg

I agree that you should have some land expense. There are ways to do that with out factoring for the cost of new land. You can lease the land to your cattle business or require the cattle operation maintain the land in return for grazing rights. Both are realistic in the cattle business.
 

ddg1263

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Brute 23":13vcpgmt said:
From what I can tell it is impossible to pay for land with the cattle you can produce from it. Land is now valued on its recreational use, not what it can make in revenue.

I agree but land is dropping in price because people are broke everywhere. I mean it is the saddest thing I have seen in my life. I think we are really close to a full blown depression like we saw in the 30's.

Our banking industry can not take another hit to their capital accounts, and the tax payer is maxed out on their tax burden. I think things are going back to the way they were years ago where assets were valued just as much on the income approach as they are as the "market" approach. People are having to much trouble going to the bank to borrow simple home and business loans to keep running up over priced land values.
 

Brute 23

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JSCATTLE":2nryn8rc said:
I bought my land 4 years ago ..I don't feed my cattle feed or purchased hay... I lease land also .. as of the first of this year I had 160 head of cattle paid for... I use or lease 800 acres...I have a good friend who specializes in selling ranch property... When someone dies and he gets a new listing I talk to the land owners usually it is when someone dies and the kids live out of town ... Most of the time they allow me to use the land to keep it up. Basically I stock my pastures to about 1/3 of normal stocking rates...I didn't run out of grass this year because of this ... Hay was hard to come by so I sold about 80 cows that money is in the bank.. ill buy back in when the rain starts... Because my pastures aren't dirt and ill also buy sale barn cows because I'm not one to buy a cow because she's pretty or one with papers ... They all sell by the lb so why buy a 2000 dollar cow private treaty when she's gonna weigh out at the sell in a year when drought forces you to sell out... That's where a bunch of people in Texas get into trouble .buying cows over market value .

That is different than what i said. I said it was impossible to pay for land with the cattle raised on that property. You are using a whole operation, multiple properties to pay for one. We do the same. ;-)

I agree with you about the cattle. That is too much spread. When you factor in your risk you have to know how much you will lose if you have to liquidate asap.
 

Caustic Burno

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JSCATTLE":kbebyeph said:
I'm not sure there is much risk in buying land ... Over the last 80 years land has gone up in value . So would it be better to put money in an account an earn .2,% on it ?.. I think ill take my chances buying land and cattle... As far as I can tell my return is much better than any bank or governmet bonds .

Not so I remember the collapse of the savings and loans, land here was going for 2500 an acre after the collapse 800 and it took twenty years for it to get back up. We are almost in the same spot today a majority of the American public has been living off borrowed money. That debt has to be serviced. To many have been living off good credit, bad credit, no credit come on down and we will loan you the money. That money has to be paid back if not by the borrower those expenses are passed on to you and I.
 

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I am on an I pad and I can not quote properly now..... But what CB said in his post was true wisdom.... I mean he hit a home run with that post.
 

Isomade

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So where do I expense my land that doesn't have cattle on it and is used for an investment? And then what do I do if I put cattle on it for 2 months and then never have cattle on that land again?

"Cattle and land are two separate businesses, you don't have to be good at one to make money money at the other." - Pete Bond
 

Brute 23

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Isomade":1y3rom25 said:
So where do I expense my land that doesn't have cattle on it and is used for an investment? And then what do I do if I put cattle on it for 2 months and then never have cattle on that land again?

"Cattle and land are two separate businesses, you don't have to be good at one to make money money at the other." - Pete Bond


You dont have to. You choose what you want to expense to what... You own it... Its your money. :D The only time its important to know all the variables and factors that go into the equation is if you are comparing two operations side by side.

If you come on here and say how much your profits are we all know how you came to that and arent trying to figure out what you know that we dont. :lol:
 

JSCATTLE

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Cb I think It's just like buying cows..if you pay to much you stand a chance of loosing ... When I purchased my land I looked for 4 years before I found land that I felt like was worth what I had to pay . Brute you are correct. I am using my complete operation to pay for the land .. if that piece of property was all in pasture I could run 75 head on it easy... So it would pay for its self...
 

Brute 23

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JSCATTLE":2dxxb1ts said:
Cb I think It's just like buying cows..if you pay to much you stand a chance of loosing ... When I purchased my land I looked for 4 years before I found land that I felt like was worth what I had to pay . Brute you are correct. I am using my complete operation to pay for the land .. if that piece of property was all in pasture I could run 75 head on it easy... So it would pay for its self...

But would the remaining 35 pay all the expenses of the 75? At $1200 it may... That is why I am curious. $1200 was a hell of a deal for what sounds like pretty productive country.

There are other factors that can ruin you. Some out of your hands. Although buying smart minimizes risk is does make it zero.
 

Isomade

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Brute 23":3l8aoo5c said:
Isomade":3l8aoo5c said:
So where do I expense my land that doesn't have cattle on it and is used for an investment? And then what do I do if I put cattle on it for 2 months and then never have cattle on that land again?

"Cattle and land are two separate businesses, you don't have to be good at one to make money money at the other." - Pete Bond


You dont have to. You choose what you want to expense to what... You own it... Its your money. :D The only time its important to know all the variables and factors that go into the equation is if you are comparing two operations side by side.

That's my point. I do run two businesses, anyone can, it's all a matter of how YOU (the owner) wants to look at it. Just because I brought a guinea pig home for my kid in my truck, then sold it 1 month later for $1 more than I had in it doesn't mean I need to expense my truck to that guinea pig.
 

Caustic Burno

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JSCATTLE":pjpetbag said:
Cb I think It's just like buying cows..if you pay to much you stand a chance of loosing ... When I purchased my land I looked for 4 years before I found land that I felt like was worth what I had to pay . Brute you are correct. I am using my complete operation to pay for the land .. if that piece of property was all in pasture I could run 75 head on it easy... So it would pay for its self...


Well I look at this through different colored glasses my parent's were born in 1914 and the depression made a big impact on them and me as well. If we didn't cold hard cash it wasn't bought. If a paycheck was missed we were still going to eat. They believed in savings. My Dad's parent's were very affluent and they lost nearly everthing in the depression.
Most American's today are in trouble if they miss a day's work much less a paycheck, this effect's the entire economy.
 

cross_7

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i know a guy that bought a piece of property in 1972 for 49000.00
sold it in 2010 for 221000.00
at first i thought that was a great return until i began to figure what the 49000.00 would be worth had he invested it at 5% or 7% for a 40 year period.
 

Brute 23

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Isomade":36ti6y31 said:
Brute 23":36ti6y31 said:
Isomade":36ti6y31 said:
So where do I expense my land that doesn't have cattle on it and is used for an investment? And then what do I do if I put cattle on it for 2 months and then never have cattle on that land again?

"Cattle and land are two separate businesses, you don't have to be good at one to make money money at the other." - Pete Bond


You dont have to. You choose what you want to expense to what... You own it... Its your money. :D The only time its important to know all the variables and factors that go into the equation is if you are comparing two operations side by side.

That's my point. I do run two businesses, anyone can, it's all a matter of how YOU (the owner) wants to look at it. Just because I brought a guinea pig home for my kid in my truck, then sold it 1 month later for $1 more than I had in it doesn't mean I need to expense my truck to that guinea pig.[/quote]

I agree and have experience running it that way.

Land would not be my first investment as a young person. Matching 401ks, IRAs, mutual funds, then real estate. It should be part of a diverse porfolio, not your sole retirement IMO.

The large ranches prices have actually held up pretty decent due to the big investers parking ,oney in land instead of the stock market.
 

ddg1263

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Isomade":1uxha569 said:
So where do I expense my land that doesn't have cattle on it and is used for an investment? And then what do I do if I put cattle on it for 2 months and then never have cattle on that land again?

"Cattle and land are two separate businesses, you don't have to be good at one to make money money at the other." - Pete Bond
Isomade, Your business plan is not the typical cattle farmer. If you are buying and selling property and grazing cattle on it for a couple of months in the interim, it would be just like someone buying and selling stocks and catching a dividend on it while they traded the peaks. However the stock prices have come down considerably to reflect correct price to earnings valuations. The valuation of the underlying stock is reflected in what profits it can produce. Your land that you are buying may have a much higher use than just a ranch.

I think land is coming down in price, or at least this is what I have been told. I know I am not excited about running out and buying something when everything is in a flux. I know cattle prices are up, but it can crash just as fast and we could be selling 7 weight steers for $550 by next year. I don’t want a huge mortgage that would break me this late in life. I am having a hard time paying for cattle on land that is already paid for.
 

Caustic Burno

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cross_7":15lj4u8v said:
i know a guy that bought a piece of property in 1972 for 49000.00
sold it in 2010 for 221000.00
at first i thought that was a great return until i began to figure what the 49000.00 would be worth had he invested it at 5% or 7% for a 40 year period.

He would have had almost 350,000 with it sitting in CD's at 5%
 

JSCATTLE

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I guess I'm hard headed. But I'd take the lower return on a real property . Mostly because I don't believe in or trust our gov. 401 s ira s etc depends on the government payin what they owe...just like buying gold many people buy gold certificates or notes instead of real gold... That's something else I wouldn't do.
 

cross_7

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JSCATTLE":rf1pnkay said:
I guess I'm hard headed. But I'd take the lower return on a real property . Mostly because I don't believe in or trust our gov. 401 s ira s etc depends on the government payin what they owe...just like buying gold many people buy gold certificates or notes instead of real gold... That's something else I wouldn't do.

your title to ownership it only as strong as the government
 
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