All Forum Posts by: Sara Lung

Hi Carla,

Just saw this post. It's already 2 years since your post, what did you end up doing with your almond farmer?

Generally when you lease out your land to an almond farmer, you don't get anything the first 3 years while the almond trees are young. Around year #4, to year #25 you get about 15% of the crop share, or equivalentlyl negotiated between landlord and farmer.

I also have land leased to an almond farmer. Hope you did well.

Does any experts think the real estate values will skyrocket with the arrival of casino?  I am thinking about the North Fork Rancheria Casino in Central CA on Hwy 99, north of Madera, CA. It just got approved by the California Supreme court in Sept 2020. People around me (non RE people), are saying Meh! But I am saying WOW!!! It's going to explode. Right? This may seem obvious for the experts, but I have never bought RE near casino before.

There is one particular parcel I am drooling on. It's a 15.7 acre land on Ave 18, Madera, smack wedged betweeen the casino and Freewat 99. OMG! I want this land so bad. 

Am I right? or, am I crazy? Thanks for your input in advance. Thank goodness for bigger pockets all these years. I am trully grateful is an understatement.

Mr Hulstrand,

I was away from BP for a long time. To answer your question about the almond farm, I signed a 30 year lease with a  almond grower. I have the land, he has the irrigation system and almond trees. We are completely 2 separate assets. We are not allowed to buy each other's property, although we each can sell our property to a third person, creating a new landlord or a new tenant farmer. The first 3 years I charge a flat fee for land rent. From year 4-30 I charge a percentage of his crop.

What do you think? A good lease, or no?

Thank you for responding to my post, @Mr Gradowitz. The 1 year statute of limitation, I heard, is for Trustee Sale. Does it apply to county tax auction too? 

Is the statute of limitation different for SFH, vs vacant land? I know of a fellow tax auction flipper, was flipping a vacant lot a year after he bought it. He tried many title companies, but he couldn't get any of them to issue title insurance for his buyer. How much time must laps before he can sell his lot with title insurance? I vaguely remember someone mentioned 5 years. Is that true?

Thanks again. And to all the other BP experts. 

Say I buy a house at the California county tax auction (**********), I rehab it, and put on the market for re-sale, will I be able to give my buyer clear title?

I heard there is a time period I must wait after my tax auction purchase, before I can re-sale with clear title? Can I rent out this rehabbed house during this waiting time?

How long is this wait time? 1 year? 5 years? Does the wait time change if I am flipping a rehabbed house, or re-sale vacant lot? 

Over the years I have learned so so so much from the community at BP, even when there were nay sayers all around me. I can't express enough how I am truly truly grateful.  

I also have the same problem. I am interested in purchasing 20 acres of land with "surface rights only". I want to dig an agricultural well, put in underground irrigation pipes, and plant almond trees. Would I be prohibited from doing this, because I have "surface rights only"?

Please give me all your opinions. Thanks in advance. I will also ask the county planning office, but they take a long time to call me back.

Hi,

I finally sold a piece of vacant land this January. I have $110K in capital gain, and I tried to use 1031 to buy other lands. I still have $70K capital gain left after the 6 month 1031 replacement period expired. Now I am faced with huge $20K capital gain tax next April. What to do???

I don't really want to create a complex entity, because I will probably only buy/sell 3-4 times during my life time. What to do???

I normally file 1040 tax return. What schedule(s) should I use to calculate this tax?

Thanks very much to all the great experts on this great site. 

Thank you Mr Klaus, Mr Hamilton.

I want to lease it to a nut farmer for a flat fee once a year and forget it and go do other pursuits. Like a 30 year Triple Net lease.

If I lease it for a percentage of the crop, or a percentage of the farmer's profit, I may get more money, but every year I or my children may worry if the farmer is under-reporting his harvest, or reporting a farm loss.

I think the farmer will not like the percentage lease either. Agricultural technologies advance everyday. The farmer may worry that I will question his farming technique and offer my suggestions on how to farm better. Too many cooks in the kitchen. He may also resent that I will suspect his under-reporting without proof.

I just as soon lease it and forget it.

The one thing that is even more worrisome to me is when I or my children wants to sell, or the farmer wants to buy the land below his trees, but I don't like the price he is offering for it. Suppose I want to sell the land to someone else. Let someone else become the new landlord for the farmer. Well, during the time I wait for a new land buyer, (1-2-3 years, land sells slowly), the farmer gets pissed off because his offer to buy land was rejected for being too low. He decides to retaliate by trashing his farm, weed everywhere waist high, trees all sick with disease, irrigation system vandalized, etc. etc. In the case of percentage rent, his reported profit or reported harvest goes way way down. He can make my land very very undesirable, unappealing to any other prospective land buyer. He can make my land utterly impossible to sell for a decent price. This is my big worry. This scenario is what I want to prevent in the initial set up of the 30 year lease.

Can you please suggest how I can prevent this scenario? Thanks. Any help is greatly appreciated. Thanks, BP experts.

Sorry. I copy and pasted some of this post. But I just wanted to ask again for help.

.

Thanks, Mr Krulac, Mr Hamilton for your responses.

The 30 year lease term is what a nut farmer will require. His investment is all spent in the beginning of the 30 years. He must do soil tests and enrich the soil, build new irrigation system, dig new agricultural well, build caretaker's quarters, plant trees, allow trees to grow for 5 years before he'll ever see his first harvest. The bulk of what a tree farmer must do is done in the first 5 years. After that it's monitor, maintain, his robust and disease free trees, and enjoy harvest time. The commercially viable life span of a nut tree is about 30 years. Between year 7 and year 25 is peak production time for the trees. After 30 years it's time to dig all the trees up and re-plant new trees again.

So, for this reason, the nut tree farmer will not agree to a short term lease with a series of extensions.

I will not agree with the IRS that this 30 year lease is a disguised sale. I'll consult with an attorney and CPA, but it's difficult to find one with expertise in land leasing for trees. Please help!

Thanks for reading and giving your thoughts. Thanks BP for this great community of like minded investors. Can some one recommend an attorney and CPA with expertise in land leasing for trees, please?

Thank you, Mr Klaus. I agree in the next 30 years the area will for sure change for the better for land owners.

At present the highest and best use for the land is a high end crop like nut trees because of the Ag-40 zoning. I tried to rent to a sod grower for shorter lease term, but he wanted better soil type than my land had.

In general I want my children and grand children to experience lack, to learn the value of hard work, and be rewarded for all his own pursuits. At the same time I don't want the 30 year lease to restrict any future possibilities. My children and grand children should be able to decide when the time comes.

Please help. How can I or my heirs sell the future land to someone other than the tree farmer?

Thanks again. Thanks all BP experts.