What a month, new BTO in the neighborhood

As some know I run a pretty small farm, mostly old school equipment, I hope to be using some modern ideas with that.

Month ago neighbor approached me, would we like to buy some land from/through them? They got a deal on 160 acres they were renting forever (their dad actually started renting it, been 'theirs' for many decades), but couldn't swing the whole 160 because of the timing of this farm economy. Some of it was right by their yard.

If we went in and bought some of it, they could do the rest. Otherwise, it would go up for auction, and we all would have new neighbors.

The trick was, at this point there was less than 4 weeks until the deal ended and the auction would be set up. So we had to yes or no in about 2 days and then massive paperwork in too short a time. Talked it over with the wife, we really don't need to expand, we are close enough to retirement.... Wife said we have really great neighbors, don't want some out of county big outfit moving in and using our property for their end rows, go ahead and help the neighbors and keep things as close to how they are.

Ok.

Got it done, everything been signed for a week, so I think its all good and done now.

Was an interesting experience. Two days to decide if you want to buy 55 acres in this farm economy, and less than 3 weeks to find the money, and then it was very complicated as the neighbors did a 1031 exchange, as well as they had to buy all the land and turn a portion over to us. Parcels had to be surveyed and re parceled. I'm leaving out a lot of messy details, but mostly the wife and I sat quietly by and just signed more papers every day, as the banker, lawyer, and title comapnies all sorted out about 2 months of work in 21 days. We used the same lender they did so it was a lot easier for everyone that way, lender was more motivated to get it all done with two customers and was able to get shared paperwork done faster, not wait to hear from one lender to the other.

That was an interesting experience. We would get some papers emailed at 4:00pm, and needed to get it back signed by 10:00am the next morning to keep things on schedule. Wife and I are pretty low key, low debt, keep out of people's way types, so was a lot of new things for us.

I think it makes some sense for us, hope it helps the neighbors too. They got to keep 40 acres next to their yard they wouldn't have. They kept thanking us for helping them out, little odd to have a younger farm family asking you to help out by buying land from them.....

Now I guess we are the BTO in the neighborhood, wheeling and dealing! went so fast I don't think its set in yet. (We are still far smaller acres than county average these days....)

Crazy month. I'm not great at doing my tax book work on time, so was fitting that full time job into the same month.....

See where we go from here.

Paul

That's the ONLY thing that makes me glad I'm as old as I am. I bought a fair amount when the WW2 generation was retiring,but I'm out of debt and don't want to pay for any more. Things are just year to year with me. I've got one land lord that just turned 90,two more in their mid to late 80s,one who had told me years ago that when his two daughters were old enough,he was going to split the place and give it to them to build on,and they're in high school. One landlord died three years ago. A neighbor told my wife a few weeks ago that the big dairy had bought that place,but,as much as I had cussed the widow's son for getting involved and wanting me to sign a written lease,I'm glad now that he did,because I have that tied up til 2018 and don't plan to let it loose. I think the rumor was wrong anyway. Nobody has contacted me to tell me. They bought the place that joins me on the south about three years or so ago. I think she had it confused with that one.

I'd like to at least make a living and hold on to what I have until I'm 67. After that,I'll be more than happy to slow down and just work my own ground that's all paid for. We'll see what happens.

It's always nice to help someone out and maybe down the road they might want to expand and you could sell it to them. A friend when he started did the same thing and sold part of the ground off now he's wishing he had kept it.

We actually did a right of first refusal on part of it, if we sell the closest chunk some day, or something happens to the two of us, they get a chance to match the sell price and buy it back.

Neer know the future, but we would be happy to see that family get it back some day, whether buying it back from us or from our auction some day.

We joked, they just want us to make payments on ot for a while and pick up all the rocks, then they will take it back when land prices fall

Paul

I don't think you will ever regret it. I've got a quarter down in another county and I told the tenant while back that I'll have in my will for him to have first chance at it. We only have handshake agreement and he has farmed it for years. Neither of us want a broker to get 7 or 8%

You brought back memories, we bought the place where we live from Federal Land Bank out of Lousville Ky. I was not aware what Fisrt right of refusal was back then. We had to wait 3 or 6 mo. to know if the orignal owner would buy it back, sure seemed like a long wait. I think I paid them 5% with my offer.

Congrats!! Glad it worked out for you. We started from scratch and bought 3 farms over the years (450 acres). Finally paid for, and most of it rented out now. Never regretted buying them. Wanted to buy another 120 some years ago, one I had rented for 23 years, but better half didn"t want to. That was when land was a fourth of what it is now. But we still have a more than decent retirement base. Does the new land adjoin yours?

Right up tight. Both pieces I actually have field roads touching already, no road travel. The 20 used to be part of my farm, grandpa shifted it to my uncles farm when dad and uncle both got married and started out, to make the two brothers farms closer in equal size. So it is a 20 off of one of my 80s.

The 35 also sits nestled in a corner of the other side of my farm. So all my land touches, I kinda have a big rectangle now with a ditch cutting it in half. The farm yard you visited is mostly right dab in the center of it all.

Can't beat the location of it.

Told the wife we could have bought shiny equipment and had deductions for 7 years; but in 7 years we would have less shiny equipment worth less so what are you gaining with the deductions you lose in depreciation.

Or we can buy this land, and in 7-20 years who know what it will be worth likely cycle back to what we paid along the way, able to rent it out when we retire, be more productive to us than the shiny equipment would be.

Helping a good neighbor was a side benefit but worth something too. They lost some acres, but have a better grouping of land and more than they could have without us. At auction, very little land has been available in this greater neighborhood in a long time, there are several larger operations with still deep pockets still hungry for more so I think it would have gone some higher than the fixed price it had. In this world of bigger and bigger farms, it was odd to be approached to buy some land to help someone out.

Paul

Good for you. We had a chance to buy our uncles land at auction (he promised to sell our fathers land he bought for cheap, didn't happen). After watching the Mennonite's run it way up we said screw it. Went to WV and bought 10 acres more with a house, river frontage and timber for a third of the price. Although it is an hour away we are tickled to death with it.

Congrats; it will turn out fine. Never never regret buying land. That's really the only major regret I have in my life. Not buying more.

I love reading this. Thank you for sharing and for helping them out. A couple of years ago I sold some property that my family had accumulated over the years. My dad has been gone 7 years now and dementia has stolen my mothers mind but it was still her old family home place, but 200 miles away. Opportunity came up to sell it to a neighbor down there.

I knew the history but not the people, come to find out his relatives and mine had been killing each other over a boundary line since before Kentucky was a state. Neither of us knew about all that, he got a 160 acres to add to his operation to make a nice sized farm, I got funds to help keep mom at home, and a feud over a boundary line was settled since it was the adjoining line (and the deed read a track bounded on each side by the lands of.... with not plots or calls or measures. )

Its a joy to help young folks expand and helps you nail down some land to help you. A win for everyone.

congrats, wish I was able to finance but I am unable to with the new mortgage regulations. Glad some farmers are able to purchase some ground still.

Good luck with it approached my 85+ year old retired neighbor about buying his 20 acres that lays across the road from my house.

Hey Paul, good deal! I would like to buy more land. Don't know if I ever will be able to. I had to buy the house and lot on the front of the farm this past year. The other buyer had some development ideas for the small acreage and I did not want whatever it was in the middle of my farm. Only way to stop it was to outbid them.