# Buying a farm on a house budget...



## Bellyman (Jul 6, 2013)

Thought I'd throw out some details on a place for sale and see whether any of you have some ideas on how it might be possible to buy a farm.

Briefly, a nice little farm just came on the market that's on the fringe area of my desired location. It's something close to 25 acres of land almost all of which is in hay. It does have a decent little house and garage plus a small pole barn off all by itself in a corner of the property. It's relatively level but not completely flat. It's in a nice location with nicely spaced places, mostly other small farms but no real close neighbors. There are pretty much no woods, which I would kinda like, but there's lots of room to plant trees if a person wanted to do that. 

The house, garage and a couple of acres is listed at about $160k, a little above my max, but not so far that I don't think a deal couldn't happen. The thing I was wondering about, though, is whether there would be a way to secure the rest of the acreage separate from 'buying the house'. (My home financing won't allow me to buy the whole farm.)

I've never been a hay farmer and I don't have the equipment. Big garden, yes, hay fields, no. The ground is good enough that I could grow other things besides hay but that's what's already there and planted. Oh, I've worked in the fields and slung the bales around. But never my own fields or equipment.

The farm acreage would be capable of at least some income and I had wondered whether it would be enough to basically just pay for itself. I wouldn't need the place to bring in an income for me, only pay for itself. 

It's something bigger than what I had really been looking for but I really like the place. Any thoughts of how to make something 'fly'? Maybe buy the house and a couple of acres and then maybe offer to do a lease purchase kind of thing for the rest of the land? Sublet some of the land I don't want to use right away? Bring in some cattle (or even horses)? Or some other idea that might at least be worth exploring? 

I'd be interested in your opinions.


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## Michael W. Smith (Jun 2, 2002)

Bellyman said:


> I've never been a hay farmer and I don't have the equipment. Big garden, yes, hay fields, no. The ground is good enough that I could grow other things besides hay but that's what's already there and planted.
> 
> The farm acreage would be capable of at least some income and I had wondered whether it would be enough to basically just pay for itself. I wouldn't need the place to bring in an income for me, only pay for itself.


I don't think there is any kind of crop that is going to pay for itself. Leasing it to a local farmer, you'll get enough to pay the property taxes for the land and a little bit more - but it certainly won't cover the mortgage and interest.

I don't know what your solution is.


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## simi-steading (Sep 27, 2012)

Farm Credit. That's how we bought our "farm".. 60 acres being sold as land with a house on it.. 

They usually want 20-25% down for land though. Leasing a hay field won't pay your mortgage or land loan.

If you want to get into cattle, go find a ton of money.. that ain't cheap to get started in..

When the dirt poor farmer who won the lottery was asked what he was going to do with the money.. He said he was going to keep on farming until that was gone too...


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## Bellyman (Jul 6, 2013)

Ok. Kinda sounds like I ought to just let this one go. I don't have the money for the whole farm (or the 20% down for the whole farm, either) and I'm not sure I want to own the house in the middle of one without owning or at least having the use of more than just an acre or two of land around it. I can do better than that with non-farm places.

I thought maybe there was something I was missing. Guess not. Oh, well. 

Thanks for the input.


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## agmantoo (May 23, 2003)

what is the dollar value of the acreage above the house and a couple of acres? Do not give up too easily! You may just need to determine how to get the remaining acres to produce more income/profit than the hay generates.


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## simi-steading (Sep 27, 2012)

There's always the option of buying it all, then splitting off a few acres with the house and keeping that, then selling the extra land to the neighboring farmer..


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## Bellyman (Jul 6, 2013)

agmantoo said:


> what is the dollar value of the acreage above the house and a couple of acres? Do not give up too easily! You may just need to determine how to get the remaining acres to produce more income/profit than the hay generates.


Actually, I don't know what the price for the entire place is. It's only being advertised as a house and a couple of acres with "more acreage available". I was just trying to come up with some scenarios that might actually have the potential of working when I really only have the budget for the house and very little of the land. Parcels like that generally don't go below about $2k/acre and are often a bit more.

As far as having the land produce more income than the hay, I can think of things that have potential to do well and can manage maybe 2 or 3 acres pretty well. 20+ is not quite the same animal, though.

Thanks for your comments!


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## Bellyman (Jul 6, 2013)

simi-steading said:


> There's always the option of buying it all, then splitting off a few acres with the house and keeping that, then selling the extra land to the neighboring farmer..


I don't think I have the financial backing to be able to buy it all. Wish I did...


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## simi-steading (Sep 27, 2012)

If it's in TN, there's always the option of growing corn, and turning that into "corn wine"  

That still brings in good money in this area.. Seriously.. I can buy a cheap bottle of Scotch for what a bottle of bad shine sells for around these parts. I just don't get it... and I do like good shine..

When we looked at this place we had looked at another close by, that was about 4 times the price.. we tried, but just couldn't swing it... so I know how it feels to not be able to get what you really want.


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## Nimrod (Jun 8, 2010)

Let's say you bought the house and a few acres. How soon do you think you could have the down payment and get financing for the other land? See if the owner is amenable to selling the house and small acreage and an option to buy the rest of the acreage at a fixed price within your time frame. That would give you the assurance that the bigger acreage wouldn't be sold to someone else unless you couldn't save up for it and the option to buy ran out.


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## BohemianWaxwing (Sep 13, 2014)

What Nimrod is suggesting is more or less a simple option that I was going to recommend. You can make an offer on the house and as much land as you can afford and put a right of first refusal in the offer for the remaining land. This means they can't sell it without giving you the option first to buy it at whatever the offer price is. It's no skin off their teeth since they can sell whenever they like, but it likely buys you you time to get settled and see how productive you can make the land so you'd know if you wanted more or not.


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## jwal10 (Jun 5, 2010)

Can you buy the amount of land you want? Sounds like the owner is subdividing anyway, figure out how much you want and buy that, 3-5 acres maybe right off the bat. You have what you want, he can sell the rest IF he wants to, or he may keep the rest until later. Talk to him about what you want, see what he says, may not be much more than the little piece. How much is bare land? Sheds are cheap to build....James


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## Bellyman (Jul 6, 2013)

jwal10 said:


> Can you buy the amount of land you want? Sounds like the owner is subdividing anyway, figure out how much you want and buy that, 3-5 acres maybe right off the bat. You have what you want, he can sell the rest IF he wants to, or he may keep the rest until later. Talk to him about what you want, see what he says, may not be much more than the little piece. How much is bare land? Sheds are cheap to build....James


Thanks James, I can't afford the land I want including the house to start off with. House with 2 acres is actually above my top all in number. I don't have a number on price per acre for extra land. 

It is priced high. I know another place that's a nice house, garage and 4.3 acres for $40k less. Had hoped for a little more acreage more for privacy than production. If I have the open acres, I figure I can plant perimeter trees. It's hard to find a couple of good productive acres with privacy. Usually it's either good farm land or all woods.

Still thinkin'...


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## edcopp (Oct 9, 2004)

Be patient, and save your cash.


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## BohemianWaxwing (Sep 13, 2014)

Yeah, if all your after with more land is privacy, don't go for the over priced, open lot. Wooded land is almost always cheaper and you won't be waiting decades for your "privacy" to grow up... Sounds like maybe a pass on this one would be wise.


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## Bellyman (Jul 6, 2013)

Actually... that 4.3 acre lot with the house and garage... I'm seriously considering making an offer on that one. It's not exactly what we want but might be a decent place to build some equity and live pretty decently for a while. 

We've been in an RV for 10 years now and we're ready for a change. We can't afford what we want and holding out for the ideal just seems to see year after year ticking by with us being no better off for it. 

Maybe it can be a stepping stone to something better. 

Taking the wife to have a look in just a bit. 

Thanks all for the thoughts and opinions. I've appreciated the discussion!


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## Locoster (Mar 29, 2003)

Bellyman said:


> Thought I'd throw out some details on a place for sale and see whether any of you have some ideas on how it might be possible to buy a farm.
> 
> Briefly, a nice little farm just came on the market that's on the fringe area of my desired location. It's something close to 25 acres of land almost all of which is in hay. It does have a decent little house and garage plus a small pole barn off all by itself in a corner of the property. It's relatively level but not completely flat. It's in a nice location with nicely spaced places, mostly other small farms but no real close neighbors. There are pretty much no woods, which I would kinda like, but there's lots of room to plant trees if a person wanted to do that.
> 
> ...


If anyone finds themselves in this situation they have to take into consideration whether the laws requiring septic service are the same for the smaller acreage than for the entire parcel. A large parcel could be qualified for a field pump-out system, and a smaller parcel might have to use a septic tank and use a truck pump-out which is costly. But back to the purchase of the property. One alternative is to make an offer on the smaller parcel with the house, and include in the offer that the vendor provide an "Option to Purchase" the additional acres. The Option to Purchase would specify a price, and time (expiry date), in which the purchaser could buy the land. This means the vendor would have to hold the property until the time of expiry of the Option ti Purchase.


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