What would you do?

[Caustic Burno]

Jo we can work out a deal .
I will buy the cows, you board them and I will pay you a 100 bucks a head,
Just send me the check on all the 5 wt's. Look at the write offs you would have as well.
We could keep this going for years, you could get rich on write off's.
I could drive over at sale time to pick my check and pay you.
Of coarse you would have to throw in a quail hunt.

 

[hillbilly beef man]

Jo, how do you keep running into these shady deals? Are you hanging out on the wrong side of town or did Vic give you some Buisness pointers?

 

[Nesikep]

the IRS would be my biggest concern, and I've had my arse bitten a couple times by people wanting to buy animals already, so here's the deal I'd make.

Figure out a price for what the animals will be worth in April, you must get at least half of this money NOW, if the animals are not removed from your property by Apr 2nd, full ownership reverts to you. I have found that charging for feed isn't a good enough incentive for people to pick something up, they'll keep owing you more and more, yet the animal is still theirs.. If you take a good chunk of money now, and they lose everything by not taking delivery, that's a better incentive, and though I'm not a lawyer, I think it would be legally easier to define... no ifs, ands, or buts.. the animals are yours on Apr 2nd if not removed. And yes, the risk of the animal going tits up is theirs.

 

[boondocks]

As long as you actually sell them to him now, and give him a bill of sale, I don't really see why it would be considered shady. Certainly not on your end. You sell him the cows, then you board them for him for a defined (short) term. After that, per prior written agreement, you can either jack up the monthly boarding fee to $X or take them to sell, at your option. You're not responsible for his reasons for wanting the sale now.

I would do it in 2 separate steps: a bill of sale at fair market value, with a boarding agreement separate to that, at a monthly fee.

:2cents:

 

[Jogeephus]

I don't see anything as being shady either. Trying to avoid taxes is as American as Apple pie but the issue I have is he is not ready to own cattle, has never owned cattle and doesn't have the first fence or blade of grass on his property and I've never seen good will or assurances put either in and I don't need or want the responsibility of raising someone else's cattle - especially in the winter.

 

[alisonb]

A few years ago I probably would have done this but I've learned by assuming other people's problems is more trouble than its worth and I'm not in the business of boarding other people's animals nor do I have the desire to start. I do need to sell some but when I do I also need them to go down the road because I'm pushing my resources right now.

:nod:

Don't know about others but as the years go by I try my damndest to simplify my life. That just sounds like trouble Jo...

 

[Commercialfarmer]

If you were interested, I'd flip the arrangement. I'd just assume that they wouldn't be leaving and set it up to where I hoped they didn't.

I'd offer the cattle at a price that provides you good profit, plus not having to haul or pay sale barn commission. After they were purchased in full, I'd create a contract for being his herdsman, making payment due prior to each quarter of care. His cattle would be collateral for lack of payment for rent, and management fees if abandoned and written up as such, like a bank would do. Plus all lose would be his risk. Supplements and any fee would be his costs for tax deduction purposes naturally.

However, he may not wish to hire me as my management skills are quit good and therefore warrant appropriate compensation. I'd need to guarantee myself at least as much profit as I'd be making using my time on my own resources.

After thinking about this, it might not be a bad situation. You could guarantee income, and name your price for doing what your doing anyway.

 

[highgrit]

I would rather feed hay through the winter, then wish for rain in the spring. Until he gets his grass growing is the kicker here. If we go back to the 2011 drought conditions he could be years getting grass established. The question I have is how much a day do you charge for room and board? And when do you receive your payment for the room and board? Oh by the way you need to watch out for them shady characters Jogeephus.

 

[Williamsv]

It makes no sense to buy cattle at the prices they are today and not have a place to keep them. If you sell them to him at a high price and have to feed and look after them all winter, you will not make much. Something is not right with this. I would tell him that I am not interested in selling right now.