All Forum Posts by: Bryant Diel

@Kim Tucker I assume he owns much more than 160 acres of flat wheat ground if he is making $80k/year for grass and land usage.  Our land is flat wheat ground that my family has not farmed or ranched on for over 15 years, and none of us live in the area anymore to make better use of it.  I have asked other friends who farm the area and they say the cash rent we get for the land is in line with what normal crop leases are in the area.  If there was a way to make more in rents on the land, we would have identified it and wouldn't be looking to exchange it for another investment property.

@Kim Tucker The house on the property is run down and likely just needs to be bulldozed or lit on fire.  We rent the land out to a family friend who farms and $50/acre per year is the going rate.  We could do a crop share, but then you have to get insurance on it and are at the disposal of mother nature as far as yields are concerned.  Annual appreciation on the land is pretty low.  There's an oil well on the property that has been shut off for 2-3 years since oil prices tanked, but will likely be turned back on as oil prices continue to recover.  We plan to keep the mineral rights and only sell the topsoil, and use that as a 25% down payment on some rental properties in the Kansas City area.  I just don't think the land makes enough in comparison to getting a real estate business started that could scale much faster and be worth much more a decade from now and provide additional cash flow for our family.  Thank you for responding, great questions and great recommendations!

@Dan Krupa Thanks for the response. Since you're an agent, do you have access to the real estate "portals" that send out the automatic emails showing properties that satisfy my selected parameters? Would love to get set up on that if you have the ability to do so. I plan to get in touch with a CPA and attorney in the coming weeks, will likely set up an LLC to have more legal protections vs holding it all in our own personal names. I've seen a lot of nice fourplexes and other small multifamily properties north of the river!

@Trista Fenner Thanks!  Still in the early stages so we are likely months away from being ready to start looking.

@Shane H. I went to Washburn U, so I'm very familiar with Topeka.  No quail on the farm land, used to have a lot of pheasant in the area but it's so much dryer now that they didn't stick around.  Your valuation per acre range is in the ballpark - it's roughly 98% crop land - can't speak to soil quality though - if it rains enough the yields are always good.  We plan to set up a trust or other legal entity to do the sale and purchase, so sounds like that would qualify it for 1031 from a title perspective.  Would love to leverage it all for 25% down on multiple deals, but since we don't have very extensive real estate investing experience, thought it might be best to start with one property and refinance to have funding for the second property a year after the first.  In regards to estate planning and assisted living, my mom is considering long-term care insurance to help with her living costs once she retires.  Would we want to include her in the legal entity we create to handle this transaction or no - for estate planning/getting assets out of her name?  Appreciate the help, will send a colleague request to continue privately.

@Adam Greene the land is northwest of Burlington, OK, just a few miles south of the KS border. We plan to offer it to a family friend/farmer that has been the lessee since we stopped farming and another friend of mine in the area who farms. It has an oil well on it, so we plan to keep the mineral rights since there's no better ROI than ROI on something you don't have to put any money into - just hope the price of oil continues to climb. Appreciate the response!

@Dave Foster nice to find a 1031 exchange expert on these forums!  We can continue this conversation via direct message.

Thanks Josh!

Hey Everyone,

My name is Bryant Diel, and I reside in Kansas City, Missouri.  Aside from listening to the BP podcasts and reading the Rich Dad Poor Dad book series, I don't have any actual experience in real estate investing.  I rented houses and apartments while I was in college and for the first three years of living in KC, so I know how it works from the tenant's point of view.  My fiance bought the house that we live in, so through that I have a mild understanding of the home buying process.  I'm a CPA and worked in public accounting as a financial statement auditor for 3 years, and have since moved on to an accounting role at a large corporation here in town.  The goals that I hope to achieve through real estate investing are: 1) to provide a cash flow stream for my mother as she gets older and requires assisted living or nursing home facilities, 2) provide a cash flow stream for my younger brother (who has Down's Syndrome) as he gets older and requires assisted living facilities and increased medical attention, and 3) provide a means of early retirement for me and my older brother.

While listening to BP podcast #276 (my favorite) the other morning, I had that lightbulb moment of how to get started in real estate investing.  Me and my family own 160 acres of wheat ground in northern Oklahoma that is only paying around $8k per year in cash rent (before taxes).  The land does not have a loan on it, so we own it free and clear.  My lightbulb idea was to sell the land and use that as the down payment on a small multifamily or apartment building here in the KC area, and utilize a Section 1031 exchange to avoid taxes on the sale of the land.  Since this real estate business would be owned by my mother and us three boys, I am unsure what legal entity would be best to setup for all of this to achieve the most legal security and tax advantages down the road.  I can guarantee that a 4 unit or more rental property in KC with a substantial down payment would provide more than $8k/year in cash flow, but again I'm unsure how to structure it all.  The goal from there would be to buy another small multifamily property each year from that point on.

I appreciate anyone that takes the time to read this post and look forward to connecting with other BP'ers!

Thanks,

Bryant