Retiring neighbor

[denoginnizer]

My neighbor asked me to come down to his place because he wanted to talk to me. He told me he was retiring and wanted to know if I was interested in buying out most of his herd and renting his property.
He is interested in selling 135 8-10 year old large crossbred cows ,with 250-300 pound calves. He wants 1000 per pair.
9 char. bulls that are about 6. he wants 1000 apiece for them as well.
He wants 30 per acre rent for a 5 year contract but the first year was free.
He said he would bushog half of the 700 acres this year for free.

His places ,three of them, are all fenced and crossfenced with good grass catch pens and water. All within 7 miles of my house.

What are yalls thoughts?

 

[r and s peckman]

Do it.

 

[mdmdogs3]

can you afford the cows or will you have to borrow money for them?????? - you know the common opinion on borrowing money for an animal that can die tomorrow

but dang - 700 acres in easy driving distance

 

[Bez>]

If at all possible - while you are at it - get a first right of refusal on the land.

Debated on adding this - but it worked for my brother.

Many years ago my brother bought a very, very expensive piece of ground. It cost him far more than he really wanted to pay - but the owner wanted HIM to buy it over some family members.

May sound morbid, but my brother also got this person to agree to my brother placing a life insurance policy on him. The man died nearly 15 years later of old age.

Brother recouped all of his expenses including land costs, insurance costs and a little extra to boot.

Bez>

 

[denoginnizer]

can you afford the cows or will you have to borrow money for them?????? - you know the common opinion on borrowing money for an animal that can die tomorrow

but dang - 700 acres in easy driving distance

I would be able to put about 20,000 down but I would need to borrow the rest. 135 calves sold in october would bring at least 500 apiece which would be around 67000 to put toward the the note.

 

[BTRANCH]

Would he owner finance any of the cows?

 

[Susie David]

The bulls are worth that by the c/wt. Good pairs are selling for $1200 and the land lease could be a windfall if you are ready to expand your operation...alot more work but soundl like the set up is already in place....if I were a couple of yeras younger I would sit down and squeeze out some details and a good contract. The life insurance policy sounds like a great idea.
DMc

 

[eric]

I would be able to put about 20,000 down but I would need to borrow the rest. 135 calves sold in october would bring at least 500 apiece which would be around 67000 to put toward the the note.

Don't forget the almost $2000 a month lease payment after the first yr.

 

[stocky]

Everything depends on your financial situation, your health, the amount of time you have to be able to take on this extra work and your family situation. However, the cows (as described) are under the market, the bulls should weigh out at least that, the location is unbeatable, to me, that pasture rent is too high if 135 cows is all it will run. That is close to 160 per cow annually for pasture, but you get 1 year free, so that cuts it down and I would think that you would get 10 months grazing in Alabama, so the pasture might not be too high, afterall. You certainly arent going to beat those numbers if you want to expand like that. Good luck with your decision

 

[bigbull338]

My neighbor asked me to come down to his place because he wanted to talk to me. He told me he was retiring and wanted to know if I was interested in buying out most of his herd and renting his property.
He is interested in selling 135 8-10 year old large crossbred cows ,with 250-300 pound calves. He wants 1000 per pair.
9 char. bulls that are about 6. he wants 1000 apiece for them as well.
He wants 30 per acre rent for a 5 year contract but the first year was free.
He said he would bushog half of the 700 acres this year for free.

His places ,three of them, are all fenced and crossfenced with good grass catch pens and water. All within 7 miles of my house.

What are yalls thoughts?

i would take the deal.$20 an ac pasture lease isnt bad.you can get 5 to 7 more yrs out of the cows.with cows that age the bank will only give you maybe 2 yr loan on the cows.if you pay $67000 a yr on the note for 2yrs they be paid for.but id try to get a 10yr lease on the land.because you dont want to have to sale 150 cows in 5yrs.one more thing.id go though the herd an cull any bad bagg or bad tempered cows.an buy what was left for $1000 a pr.the bulls you can pretty much cull an breakeven on.the same with the cull cows.if you take them all w/o cleaning the heard up.

 

[Iowa237]

First of all... find out if he as any relatives in Iowa that are willing to do the same thing with me!!! I don't know about your part of the country, but up here everything you just said is extremely cheap! 700 acres and 144 animals is what??? 4.8 acres/hd. and I assume part of that is hay ground? So the way I see it, it isn't much different than here? First year free rent??? Rent up here is 30-65 per acre, no such thing as free!!! Id take a giant leap if I was you. Maybe see if he'd even sell you his farm on contract with 0% interest!!!

Don't 4get to figure your death loss, and operating expenses! You won't have 67,500 to put against your cattle note each year. It cost me $506/pair last year to have my cattle. Another thing I do is even when a cow is paid off. I still put an "ownership" cost on her, which helps me keep more heifers. So when it comes time to replace her I don't have to borrow more money to keep my heifers. I have a bad habbit of thinking that I need better equipment so if I didn't do that, I'd have better working facilities, but more debt (I know... bad management? but it works for me)! Just some thoughts. Good Luck and have fun doing it.

 

[cfpinz]

I'm happy with everything except the 30/acre, a little high for here but I don't know about where you're from. I'd say go for it assuming they are a good, workable set of cows and you have the time and ability to handle this amount of labor. I'm sure you've given some thought to your equipment to even consider this, hopefully you wouldn't have to purchase anything too expensive. No rent the first year - great! You can look at it as you're recouping half your expenses in a few months when those calves hit the market, but personally I'd pull next year's operating expenses out of that check before I got too excited.

An ounce of forethought is worth a pound of regret.

Good Luck

cfpinz