Blog Entry 6-30-2020
Buying the Right Farm for You
with Broker/Agent Nathan Lee
Can you imagine putting an offer on your dream property five minutes from now?
A couple years ago an east coast businessman, named Jim, reached out to Nathan and let him know exactly what he was looking for in a farm. He wanted an income producing property, with at least 50% wooded acreage, great access from the east so predominant west winds could be hunted, and a couple spots for some large food plots at least three acres in size. Jim drove out to southern Iowa, visited a few farms, but just didn’t see exactly what he was looking for. During this trip the agent and client bounced ideas off each other allowing Nathan to gain a very in depth understanding of exactly what John was looking for. After Jim’s visit several months passed by, various farms came on and off the market but Nathan didn’t see the farm that quite fit Jim’s specifications.
And then it happened. Nathan got a phone call from a landowner he had previously reached out to. The property owners had not been interested in selling their farm but suddenly had a change of heart. Nathan immediately knew this was the right farm for Jim!
Nathan called Jim and told him his dream property was here! Nathan described the property in detail, painting a mental picture of the beautiful southern Iowa whitetail mecca from the oak laden ridge tops, to the small, rippling stream that wound through the property. The excitement in Nathan’s voice was unmistakable on the phone, and Jim knew this was the property he was looking for. After a mere five minutes of conversation, Jim had decided to make an offer. He had never stepped foot on the property but had 100% confidence that Nathan knew exactly what he was looking for.
Within hours of the landowners reaching out to Nathan an offer had been accepted and Jim became the owner of his dream farm! It was everything he hoped for!
This story could not have taken place if the buyer had not built a relationship with Nathan.
This story could not have taken place if the sellers had not been previously contacted by Nathan.
This story could not have taken place if the buyer had not already been pre-approved by his financial institution for a loan.
If you are interested in having a story like Jim’s, there are a few questions you need to consider.
What is your budget?
The most obvious factor to consider in buying a farm is one’s budget. Ideally a buyer would put at least a 25% down payment on the sales price.
In addition, to the initial down payment, how much can the buyer afford to pay on the property each year? Or each month?
Whitetail habitat is full of income producing possibilities that can help a buyer afford more acreage than originally considered. Income from your farm could include timber harvests, cash rent payments on tillable farm ground, CRP acreage enrolled with your state agency, rental homes, cattle lots and more.
If a client has $50,000 available for a down payment, let’s say he is considering a 40-acre property that is selling for $3000/acre or a total of $120,000. He could make his down payment and pay the remainder of the property over the course of twenty years at roughly $5000 a year.
However, if the property provides $2,000 of CRP income and $4000 of cash rent from farm ground a potential buyer would easily be able to afford a property twice the size he originally considered! A property brimming with mature white oaks ready for a $40,000 selective cut could make this dream even more realistic! Before you sell yourself short on how much acreage you can afford, let Nathan, a Master Land Pro, talk you through some of the income producing opportunities a larger parcel can provide.
How will you be hunting the property?
If you’re a non-resident interested in gun hunting you will likely draw a tag every couple years. Iowa’s gun season falls later in the year which means the deer will be focused on late season food sources. In order to have a crack at a mature buck during this time of year, you need large food sources, at least three acres in size. Not all farms have this amount of acreage available for food plots. However, a resident buyer that is strictly a bowhunter might be ok with a farm with a totally different layout where early season archery opportunities are more likely. Can you see how an individual’s particular situation will greatly impact the ideal layout of a farm?
Are you a resident/non-resident?
What weapons will you be using?
Is your main focus on whitetails or is it in investing money?
How many people will be hunting the property?
What seasons will you be hunting?
Are you wanting to build on the property?
Are you strictly interested in hunting whitetails or would you like to have opportunities for other species?
Are you looking for a property to hunt forever or a property that could be managed and resold?
The small details of a particular buyer’s situation need to perfectly align with the layout of the farm. A land specialist can greatly help in matching the right farm with an interested buyer.
What can you do today?
In the growing world of recreational real estate there are more buyers in the market than ever before. When a premium whitetail property becomes available, it is not uncommon for a farm to have an accepted offer within 24 hours. Make sure that you are in a financial position that you can make an offer with no contingencies. If you are pre-approved by your bank, this makes an offer much more attractive.
Make sure to give Promised Land and Homes Broker/Agent, Nathan Lee a call to begin building a relationship with him like Jim has. Nathan needs to know your hopes, dreams, and particular hunting situation. He will ask a few questions to make sure he understands what it is you are looking for, because the right farm for me, might not be the right farm for you.
When your dream property becomes available you want Nathan to be immediately thinking of you!
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