Tough decision, sell out or stick it out?

[HerefordSire]

$197 per acre * 40 acres * 10 Years = $78,800

Is this the 10 year monetary number you are evaluating?

Yes that is what I am looking at or doing it for 15 years.

A couple of more questions if you don't mind:

(1) What is the current market value of the same 40 acres in question?
See land in this area for $1200-1500 an acre.

(2) What are the terms of your existing land note such as interest rate, term, payoff, etc.?
Owe about 15 more years at 5.875% balance of less than $80,000

(3) What is your professional expertise?

Full time job is a service rep/mechanic.


I recommend following these directives (KenB hit the nail on the head):
(1) Get pre-approved for a future land note from the current deedholder that you owe less than $80K to. The amounts should be close to each other.
(2) Before signing the contract, consolidate the two loans into one loan containing a point lower interest rate.
(3) Locate the land you would like to own within the current deedholder's pre-approval amount, preferably adjacent to the land you already own.
(4) Sign a 15 year contract with the Feds.
(5) Take the signed contract to the deedholder and sign twice as large of a loan paying off your original loan containing a higher rate.
(6) Move your cattle
(7) Celebrate, as you have learned the art of the deal!

 

[tom4018]

HS,
I am not the type to take the risk like that, really don't want the debt although I wish I had more land.

My brain says do it for the money but my heart wants to stick with cattle. Talk about torn between two things, guess the money will be more security.

 

[Jogeephus]

What good is owning land if you don't have the right to do with it as you see fit? Whenever someone puts syrup on a carrot I'm always concerned there is a big stick somewhere that I can't see. Also, the cost of planting the grasses is pretty expensive. Sure they help you out some but its been my experience their help is questionable since "their method" is not always practical and is based on a cookbook recipe designed by mouse-pushers and acadamians who have never actually done this. I would also seek advice from those who placed cropland in the CRP progam only to later have portions of that land deemed wetlands and they no longer can farm the land once the contract had expired. Whose to say that someone will not pass a sweet sounding environmental law that protects native grasslands. Once passed, a regualtion could easily be put in place by whatever agency that restricts your ability to do anything with the land since it is now contains protected species. If you are going to snare something, it usually requires some bait.

On the otherhand, if things got financially tight, could you not sell off a few acres and reduce and pay on your note? This would be capital gains income and not passive income like your payment.

I am a stronger supporter of landowner rights and an opponent of government sticking their nose where it don't belong.

 

[john250]

HS,
I am not the type to take the risk like that, really don't want the debt although I wish I had more land.

My brain says do it for the money but my heart wants to stick with cattle. Talk about torn between two things, guess the money will be more security.

OK, dog. You will be happier going broke in the cow biz than you will be cashing those checks. Work on it. Good eating will always be valuable.

 

[HerefordSire]

HS,
I am not the type to take the risk like that, really don't want the debt although I wish I had more land.

My brain says do it for the money but my heart wants to stick with cattle. Talk about torn between two things, guess the money will be more security.



Is "risk" your only objection from following my directives? If so, are you ultra conservative such as one that invests in certificates of deposits with a local bank for example?