Developer · Amherst, MA · Member since 2018 · 35 posts · 7 votes
Food demand is always increasing and our fertile soils are eroding.
I'm wondering what type of opportunities are out there for buying farmland and improving. In my line of business, I have come across a lot of farmers who want to sell their land.
Is it profitable to buy land, improve the soil and then re-sell or lease to a farmer?
What types of opportunities do you go after in this potential niche?
Or how about multiple tenants? Stacking farming enterprises is very beneficial all the way around. You could rent to a small dairy farmer and a chicken farmer. The dairy farmer does "rotational grazing" where the cows are confined to small areas or "paddocks" and moved daily to new fresh grass daily. The chickens follow behind the cows and eat all the fly larvae and spread out the cow patties at the same time. Then you could also rent to a cheesemaker who will turn the cows milk into a high value product.
North of Houston · Member since 2018 · 349 posts · 181 votes
7y
I am in Texas so may be my example is a bit different. Texas has very little government land(s) compared to the other states and we have to keep it in agricultural use or get hit with property taxes (we loose this exemption we get otherwise) . Plus we rarely snow over where the roads are unusable for most of the State
The end result, people have to have their land being used by farmers so in my scenario, I am letting farmers grow crops for almost free but he also mows and keeps up other properties too. Still any play for land for its growing capability is a dead end over here in my view.
What does work is getting is going after the retirement market moving away from your winters. Find big tracts and installing a all weather road plus electricity then subdividing fin to 10 to 50 acre ranchetts, that seems to really work well if there are trees and changes in the typography, plus it does not hurt to have good hunting, fishing and a lot of wild game
Developer · Amherst, MA · Member since 2018 · 35 posts · 7 votes
7y
@Charley C. Interesting. I like the idea of buying a large tract and then subdividing it into 10-50 acre ranchettes. Have you done any of these projects yourself?
On average like $15000-30000 per an acre but there is definitely some cheaper land and some more expensive
North of Houston · Member since 2018 · 349 posts · 181 votes
7y
years ago, was involved with with a small part of what I had to do, we had a lot of road frontage and didn't have to build roads. one those lucky moments. Now days, I worked in the city doing multifamily construction. I watch these deals happen and get reports form doing them through the years. They seem to do well. The best ones just sell them out right and don't get tangle up with seller financing.
In the Texas hill country, I do have 100 acres that's prime for doing that but its really too far from where I live to fool with all that. I bought it 3 years back under $3000 an acre and if I divided with a real road and power lines, I am pretty sure it will fetch $10,000 and acre based on the sales comps. You got to have comps and an existing market to get then buyers to buy with confidence, otherwise don't do it
I am not sure what I would pay per foot for an all weather gravel road that is about 30 feet wide (easement 50') but thats what it would take. its long little narrow and rectangular so it should but perfectly in to ranchetts
Your first option is to find a track on a corner, then you don't have to build a road, that's a no-brainer. just hire the power company to bring power and your done. If you do have to build a road, look to see how far away a pit is. Preferable you might have gravel on the very land you are buying.
Edmond, OK · Member since 2012 · 456 posts · 270 votes
7y
@Charley C.
I am looking to buy land currently zoned agricultural in my state of Oklahoma, as part of a long term buy-and-hold strategy
I've focused on tracts that meet the following criteria.
1. Should abutt Interstate I-35, our main artery for the big cities.
2. Have a corner, preferably all 4 corners, with road. So looking for tracts sized 160 acres and higher
3. Relatively flat topology, not in a flood plain.
4. Learnt from @Jay Hinrichs to ensure a soul test shows land can be inhabited by humans
North of Houston · Member since 2018 · 349 posts · 181 votes
7y
@Jai Reddy zoning? way out in the sticks? learning something new about Oklahoma.
Hey you bring up a very good point about the humans, I do want to expand on that. Look and see what is visible about homes near by. In Texas, there are certain parts that have these numerous periodic disgusting old mobile homes rented out. Just randomly put where ever there is a water well and power. If the habitat is neglected and abused then so is absentee neighbor's ranch now /dumpsite. When I got to the point of walking the properties, many would have piles of what happens after an eviction and not just one pile in one place, I saw generations of garbage and going back years. I think its a better play to even pay more $ for less land if the ranches in the area are clean and well kept and/or owner occupied
Edmond, OK · Member since 2012 · 456 posts · 270 votes
7y
@Kyle Ferguson I haven;t acquired any yet. Looking at MLS, Craigslist and now starting to direct mail owners based on County Assessor records I look up.
Developer · Amherst, MA · Member since 2018 · 35 posts · 7 votes
7y
@Jai Reddy I highly recommend investing in the direct mail. We run 95% of our business from direct mail to landowners. A well put together mailer turns into results. Its all about those off-market deals.
Edmond, OK · Member since 2012 · 456 posts · 270 votes
7y
@Kyle Ferguson Thanks Kyle. Yes, there was a post by someone under Real Estate Success Stories that really encouraged me to try direct mail. What we get from the BP Community is priceless.
Or how about multiple tenants? Stacking farming enterprises is very beneficial all the way around. You could rent to a small dairy farmer and a chicken farmer. The dairy farmer does "rotational grazing" where the cows are confined to small areas or "paddocks" and moved daily to new fresh grass daily. The chickens follow behind the cows and eat all the fly larvae and spread out the cow patties at the same time. Then you could also rent to a cheesemaker who will turn the cows milk into a high value product.
Perry, GA · Member since 2016 · 46 posts · 21 votes
7y
Here is what's neat: if you lease it out to a "holistic farmer" you are getting returns directly into the very soil. The bank may not recognize it but but there are smart people that WILL see the value.
I could be wrong and that farmland is quantifiable by fertility in some way? Not sure about that but the point is that you can have renters that appreciate the value of the land not depreciate it if they agree to manage their flocks holistically. And this is the kind of returns that money can't buy!! You cannot go spread out the best fertilizer money can buy and compete with livestock working the land as nature was designed.
If you think about it it's like having people pay YOU to landscape YOUR yard into a very fertile garden. Then they buy it from you at a hefty profit to you gladly. They are well aware of the value of this land now. Where else are they going to find this caliber of holistically "charged" soil?
Specialist · Indiana counties · Member since 2019 · 8 posts · 0 votes
6y
This is terrible advice all of it . Message me. I'm a landowner in multiple Counties in Indiana . Farming is for REAL here and inventory is low so prices are high . I'm
Not selling , but I can tell you the economic model and how to Valuate Ag land