Originally posted by @Account Closed:
@Richard C.
i know, hes so dumb that hes made millions and does whatever he wants whenever he wants. what a life huh?
I grew up farming and I'll tell you its not an easy way to make a living unless you're a generational farmer. If anyone can tell me how to buy farm ground with no money down that cash flows, you'll have my undivided attention. I've been trying to find a way for years around here. You go to a sale ready for action, you look around and see numerous large farmers that are double digit millionaires standing around talking to each other, (because they don't seriously acknowledge any "little" guys in the room. Pretty soon the pissing match begins between two or three big dogs that were handed free and clear farms from parents and if the ground in question is close to where their other farms are or whatever justification that they can muster, they will pay whatever it takes to buy it, and that's saying something when testosterone and egos get fired up at an auction .
Once a farm gets its debt under control, and this could take three or four generations to get there, it gets hard to stop the money from pouring in, and I mean millions and millions of dollars. There are only so many boats, airplanes, motorcycles, fancy trucks and cars, trips, 2nd third and fourth houses, or whatever you have to buy to show the world that you're rich. After you've bought all the toys you want, and there is nothing left to buy that will impress anyone, you find that the money still floods in and if you don't spend it the government takes it. (there is almost no expense that can't be justified as a farmer,........think about it. )So this big dog farmer has no choice but to buy more ground, because "they're not making any more of it" So you go to the auction thinking that you can stretch a lot and maybe give 7 to 8 thousand per acre and hope nothing bad happens for ten or so years so you can get it paid down. Because if you don't have deep pockets, or lots of other ground to offset the loss of one piece , weather, drought, bugs, disease, market volatility, and increasing overhead prices can take you down fast and with no remorse.
You will probably never get a chance to raise your hand because before you know it, the price is well over 12 thousand dollars per acre that may bring in 300 dollars per year per acre for rent. Then you notice that these few men that show up with grimy hands, dirty clothes, and worn out hats and boots that many people make fun of as hicks and red necks have run the price up to 15 thousand dollars an acre and in thirty days write a check for 2.5 million dollars and buy a 160 acre field in corn country. And by the way some of the big boys do this every time a field comes open in their territory. Possibly three of four times a year, every year.
I just described a farm sale I attended less than a month ago. It was worse last year when grain prices were three times higher than they are this year. This all but guarantees that the rich get richer , and the little farmer has very little chance. Not an easy way to make money for new guys. It used to be that you'd see doctors and lawyer come to the sales to invest the cash they have in farm ground, but anymore they have a hard time competing.
I always wondered when I farmed with dad why anyone would invest over a million dollars just to bring home 50 thousand, especially with all the pitfalls that come with farming.
Since I've been relatively successful in real estate, these big farmers let me in their little groups at coffee and such and its crazy how they open up and reveal what kind of money they make. Its almost unbelievable. And I'm not saying this out of jealousy, because farming is a way of life , not a job, and every big farmer that I know gets up just as early and works just as hard as any little guy. When they say up before sunrise and down way past sunset, they mean it, and that's every day. (Unless you're religious, and almost all farmers are, then you get Sundays off.) Unless its supposed to rain on Monday and you don't have all your crop in yet, then you hope god undesrtands and do whatever you have to to try and beat mother nature.
Most farmers have earned their money, I found that renting properties was a hell of a lot easier than farming and is way more lucrative. That's why I embraced properties instead of land.
Sorry for the long post, I've been trying to buy raw farmland for years with no luck. I'd love a little insight. Funny thing is, most of the rich guys tell me " just put down a million dollars against it and it will cashflow pretty good. I just figure that these guys have been wealthy for too long and cannot relate to the average Joe.
Sean K
