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SE MN | The real problem that you have is that it is too many acres to bite off at once unless you have $1M in your pocket for a down payment. Land hasn't paid for itself for 40 years, which means you need outside income from owned land or other work. I suggest that you look at your finances and decide how much disposable income you have, then determine what kind of loan that payment would service, then divide by local land value. That will give you an idea of the number of acres you should be considering.
I just talked to a banker about 160 acres that should bring about $1.2M. He said that my finances may be too good to get a beginning famer loan since they require you to have a need to get approved but the bank wouldn't approve a stand alone loan because I couldn't demonstrate enough cash flow. This was with a down payment and plans to sell off a building site. 30 yr fixed is at 7.75% less abut 1/2% patronage. 80 acres would be easily doable but the land market locally has very little liquidity. | |
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How can a young farmer afford ground?
