# Buying farm land



## L&Jfarms (Jul 16, 2008)

So i am in my early 20's, and my dad and i are into dual purpose farming. we have around 60 cows, and we farm about 30 acres of corn/beans. We have about 45 in hay that we use for our cows, and sell the rest of it. 
Any ways...i'm looking to buy some land of my own. What my question is is what do i have to do to get the loan for the land. First i have to find land. lol Then Come up with a business plan? After that i have no idea. I live in eastern iowa and i think i can find some land going up for sale here for a good price. (lots of old farmers looking to get out of it) Also what does the bank look at? What do i need to do? Is there a grant of some sort for young farmers starting out on there own? Any thing will help!!!!! Thanks.


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## Freeholder (Jun 19, 2004)

You can check on grants, although I doubt that you'll find much help that way. With the economy teetering on the brink, this is NOT the time to be going into debt, though! I recommend you read all of Joel Salatin's books before you go any farther with anything. You may be able to lease some land to get started with, if you can't do what you want on your Dad's place for a while longer. But definitely DO NOT go into debt at this time!! If you are currently debt-free, you are in better shape than nearly every other person out there.

Kathleen


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## Navotifarm (Dec 16, 2009)

The best way to find out what the bank (or other lender) requires is to ask them directly. First they will want "established" credit so you can ask them the best way for you to accomplish that which probably involves borrowing $ and successful repayment. Then they will want proven ability to repay or something they can snatch and sell if you fail to be able to repay. This would be called "security" like for example you put your dad's farm up as security. Not a good idea!
Have you considered "lease with option to buy" or "rent to own"? Get the seller to hold the papers on your loan?


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## Mel- (Mar 30, 2004)

I don't think this sounds like the typical going in debt. he is borrowing money for farm land that he would then farm and make income off of. this is business debt. can't make money without spending money.

I'd talk to your bank.


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## fishhead (Jul 19, 2006)

Check with your nearest Small Business Administration office. They can help you with a business plan and possibly funding sources.


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## palani (Jun 12, 2005)

What does your father say?


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## Blu3duk (Jun 2, 2002)

Check out the USDA Farm Service 
They have programs...although stringent they may beable to help. Also chek out USDA Rural Development.


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## Terri (May 10, 2002)

You COULD call your bank and ask them what they are looking for. Then find out your credit score.

That is, at least, a starting point!


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## RosewoodfarmVA (Oct 5, 2005)

I can identify as Im now 27 and have farmed for a living since I was 18. I use the land on our family farm (owned by my parents) as well as tend land in this area for rent. All major expenses such as fencing and barns are invested in the family farm, the rented land is hay. In many cases you can tend land for free or what it costs in taxes if you can show yourself capable of taking care of it to the owners high standards. In this area there are many 'big timers' that will rent land for $$ but after a few years it looks like junk and everything's falling apart because they are into so much and spread so thin that they don't have time or energy to spend on maintenance. Many owners are happy to deal with a younger person that demonstrates an ability to keep things up, even if they make little or no $$ on the deal, just to keep their farms up and looking good. 

In my opinion you should look at land purchase not from the standpoint of making an income from that land but in increasing land value and earning money from the low purchase and high sale of that land. Consider farming it as just paying the bills til you can sell it at a profit. In this area income from farmland is low in comparison to the cost of that land and accompanying taxes etc. I would find it hard to make enough (on a per acre basis) to pay off land in 20 or 30 years just from the crops that land can grow due to the high cost of land, which is inflated due to recreational use (hunting) by city buyer/owners and the "yankee retirement" that is occuring in this area. I think you can make a greater profit by renting or tending vacant land in your area. Perhaps approaching nearby farmers that are elderly, or farms owned by out of state or recreational people, and asking if you can pay for the taxes on their farms in exchange for tending the cropland and generally taking care of the place. You would be paying taxes on any land that you would own anyway, and fertilizer and other inputs would happen every year regardless of who owned the land. You'll find that you can clear a greater profit without having to make enough to pay off a mortgage as well. If possible save money along the way so that when you find a 'perfect' farm for you to keep, you will have a chunk with which to purchase said land. I would not be in any hurry however to purchase land just so you can keep farming, you should be able to find rentable land around. Only buy as a last resort, and at a rock bottom price. You'll never make enough on farming to warrant buying land at normal or high prices, unless you are purchasing the land more as an investment than for farming... Just my opinion and what has worked for us...


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