Originally Posted By: skyactiv
I know ZERO about farming. The bank officer where I bank told me of a farm that is about to be foreclosed on.
The guy that owns it parents died and he bought out his siblings with a loan and is unable to keep up on the payments.
It has 146 acres of tillable land, a house, barn, no implements and is in NW Ohio. $903K. I can buy it without a mortgage.
The banker says it has very good soil and is a very good farming district. Who would I contact about evaluating it and what
else should I know? I would lease the land as I have no knowledge or intention or farming it.
FWIW, I grew up on a farm, now live on a farm, help my brother with some occasional farming chores, including driving a truck during harvest, but I'm not a farmer.
I highlighted a few segments of your posts that I think you should concentrate on. First part is that you know zero about farming. It's like trying to jump into any other profession without knowledge of it, you would be at a disadvantage. Second, he's probably paying interest on a loan, but the current owner can't make ends meet owning it. Third, the banker will say everything good about the land because when it comes to land, "They just don't make it anymore" is the familiar saying about land. It's not like a car that wears out or a house that can burn down, the land will be there until the end of time, meaning that they can foreclose on land at any time there is no payment, unlike a car that wears out. (Yea, I know you said you could buy it without a loan) Bankers love to take out loans on land because it's easier to foreclose on it.
Sorry for the long post. A couple of years ago, soybeans were $14/bushel, corn was $8/bushel and it was easy for a land owner to make money. Prices for grain commodities have been cut in half or more and the cost of putting it into the ground, including the cost of seed, has not decreased at all. I don't think the price they pay for grain will increase in the near future. You will see a lot more farmland foreclosed on in the next few years, especially if NAFTA is dissolved.
Not saying to skip buying land, I'm just saying you better do your homework before you plunk down your money.