Understanding a "Fair" Partnering Deal

[new jersey mike]

Hello,
I am new to all of this. I recently purchased my grandparents property in Catskills NY. It is vacant land with 40 acres of fields and 100 woodland. 20 acres are being hayed and I am almost done with opening up the other overgrown areas.

The neighbor down the road is raising beef cattle and I would like to propose a business deal to him to share the profits and the use of the land and of course some investment funds.

The property is 4 hrs away so essentially I am not able to tend to the cattle daily needs.

I am trying to learn as much as possible so that I am not taken advantage of.

Any thoughts on my possibilities.

Thank you

 

[Jogeephus]

Have you considered just leasing it to him and if he does a good job of taking care of the land enter into a long term lease or at least give him some assurance you appreciate him taking care of your land for you.

 

[Anonymous]

Where at in the catskills. I got family up in greenville.
I would just lease the land to him and run a few of your own to get your feet wet

 

[Kathie in Thorp]

to share the profits and the use of the land and of course some investment funds.

You own the land, you've paid for the land. Am not sure "and of course some investment funds" means. He wants to use it (maybe you want to use part of it, too?). Would strongly suggest you talk to an attorney before you get locked into this. If you don't have much experience, you'll need some guidance. If you have a trusted ranch/farm/cattle person in your circle, talk to him/her also.

 

[Gale Seddon]

Sounds like nice property in a pretty area!

Only want to add that whatever you end up doing, do it in writing so you avoid potential problems later.

Good luck with this.

 

[new jersey mike]

I don't see any real benefit to leasing the property. I have already looked into that and the values are low.

Since he is already raising cows just down the road I thought offering to invest, share some pasture, use my good hay. He did cut it in 2010 but this year another guy did.

I have just opened up some old fields as pasture, I know the quality of hay / weeds are not worth bailing but it would give additional area for all the cattle to graze.

At this point i would not even know what a decent offer/deal would be.

Sadly exploiting the down-stater seems to be a common practice. I know that may sound one sided or presumptuous but I do have several good reasons to base that on, one of which was the timber theft that would have paid for building a house. So I am totally on guard at this point.

I know there are good people and I have meet many, I just don't want to be a fool.

I plan to return this property back into some type of a revenue generating farm be that tree or livestock.

I am hoping this forum is a good start to understanding and learning about cattle and all that is involved.

 

[melking]

First, I agree, consult an attorney for the paperwork. That said, I would offer hima partnership where you bring the land and he brins the cattle to the deal. In a perfect world, you would want to have at leasta 51% holding in the partnership but then again so would he. Even if you go 50/50 just make sure yopu spell out what is to happen both during the course of business and in the event that the partnership needs dissolving. :2cents:

 

[JSCATTLE]

I'm not sure how many cows you can run on the place you have . I've personally never heard of a deal like this ... Lease it to some one to take care of it .. there's not enough profit in the cattle biz to be splitting with a partner .. unless your talking thousands of acres ...

 

[Caustic Burno]

I would avoid this kind of deal like the plague. If you hit the national average of a 100 dollars a head profit, going in a deal like this your already at 50 buck's. I see this more as a loose/win situation rather than a win/win.

 

[bigbull338]

I would avoid this kind of deal like the plague. If you hit the national average of a 100 dollars a head profit, going in a deal like this your already at 50 buck's. I see this more as a loose/win situation rather than a win/win.

CB is right stay away from any kind of a partnership deal like your considering.because itll blow up on you fast.

 

[skyline]

In our area, the grazing lease accomplishes a few things for the landowner. It allows the landowner to keep his Ag exemption, pays enough lease $ to cover property taxes, and the leasor is responsible for maintaining fences. The thing to watch out for as the owner is overgrazing and weeds. Unless your part of the country is much different, a cattle partnership will be more risk and less benefits than a lease.

 

[Jogeephus]

At this point i would not even know what a decent offer/deal would be.

I think Skyline has described a pretty good deal to me. If you don't trust the guy to lease it then how then could you trust him in a partnership. There are a lot of costs that go into maintaining a property that most cattle producers just eat. With no more than you have and your distance from the property I would think care of the property should be your main objective and if this guy is a halfway decent person then having him keep up the fences, do the mowing and having eyes on the property would add great value to whatever rent he may pay you. Oftentimes, landowners seek to get higher rates of return than the land is capable of producing through agriculture. When this happens the producers look more closely at their "free" inputs they put in your property and just bleed it dry. This is not good since this will hurt your primary investment - the land itself. JMO

 

[TexasBred]

Only partnership I was ever in was done on a handshake along with a promise that I'd kill him if he EVER tried to screw me. Worked out well for both of us.

 

[bigbull338]

Only partnership I was ever in was done on a handshake along with a promise that I'd kill him if he EVER tried to screw me. Worked out well for both of us.

those partnerships usually always work on equipment.