Sioux Falls, SD · Member since 2017 · 2 posts · 0 votes
Hello, I'm a 30 year old dairy Farmer from Minnesota and I had some questions for you bigger pockets real estate geniuses. Basically I want to use the equity we have built up in the farm to start real estate investing. My plan was to get a line of credit backed by some pasture land I have and start investing in rentals and propertys to flip. Does anyone have any experience doing something like this?
Lender · Minneapolis, MN · Member since 2016 · 30 posts · 34 votes
9y
Karl,
This one may be difficult.
Where are you located?
Do you have a lender you work with for the dairy equipment / activities? Is this a financial institution, or a dealer financing program? Have you tried running it past your existing banking relationship yet?
Lender · Minneapolis, MN · Member since 2016 · 30 posts · 34 votes
9y
Karl,
This one may be difficult.
Where are you located?
Do you have a lender you work with for the dairy equipment / activities? Is this a financial institution, or a dealer financing program? Have you tried running it past your existing banking relationship yet?
Sioux Falls, SD · Member since 2017 · 2 posts · 0 votes
9y
Thanks for reply Micheal
I am located right out of luverne mn, it's in the southwest corner of the state ok. I haven't run it past the bank we use yet (they're our primary lender). The banks is probably my best bet then?
Flipper/Rehabber · Minneapolis, MN · Member since 2016 · 1k+ posts · 1k+ votes
9y
I don't have experience with what you are looking to do however most banks do NOT like to lend on acreage/vacant land. If you are looking to go this route financing will be your greatest hurdle, I would expect to pay a higher interest rate than a conventional loan. AgStar is a big player in farm loans, but I suspect in your area there may be a local bank who may stick their neck out for you. If your bank won't lend I would contact AgStar.
Lender · DFW · Member since 2017 · 8 posts · 1 vote
9y
Karl,
Not sure how MN homestead laws work, but in Texas the lender wouldn't be able to leverage the house and 200 acres (if married) for anything but building, refinancing or improving the permanent residence outside of city limits.
If you can use the equity, you might consider reserving it for down turns in the milk market. How many dairy cows are you milking? Holsteins or Jerseys?