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Old 08-05-2008, 09:16 PM   post #1 of 19
Edward
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Question First time farm buyer, how to go about it...

...or what did you do? The Farm Service Agency has info, but

I have a for-instance; here's the setup:

Lets say you want to purchase an existing, successful farm/business in a large farming community and you want to step into it without making wholesale changes.

The farm is 20 acres.

You havent farmed for profit, ever. Just for hobby and helping on other farms once in awhile.

You have good credit, no real outstanding debts to speak of.

You have cash but only about 10% of the price of the farm.

The FSA will not cover the remaining 90% of the cost of the farm, the farm costs more than what they lend.

The SBA does not loan for farms, or so they said.

The owners will carry contract but that is not desirable to the buyer.

So if you wanted to break into farming (as opposed to inheriting, etc), and had to find creative ways to finance it, what would you do or how did you go about it?

Or does anyone know what available aside from the FSA website info?
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Old 08-05-2008, 10:00 PM   post #2 of 19
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Default Re: First time farm buyer, how to go about it...

I guess the first thing I would ask is.....Do you have a business plan??

That's the first thing any reputable lending institution is going to want to see.

What exactly does this farm grow profitably on only twenty acres??
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Old 08-05-2008, 10:03 PM   post #3 of 19
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Default Re: First time farm buyer, how to go about it...

Might look at an angel investor. Interesting! Awaiting other's comments or suggestions. Best of Luck.
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Old 08-05-2008, 10:47 PM   post #4 of 19
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Default Re: First time farm buyer, how to go about it...

Thanks for the replies

Argee; no business plan yet. Havent ever made one so this is new to me, but the SBA website has some outlines to use. I might be checking the local office tomorrow. Called and spoke to the property owner and just get some info then called SBA main number; they said they dont loan for farms however after talking to FSA, they said to call them again...
But talking to FSA today, I was just trying to get an idea of what is available. Should I have not called before having a business plan in place? I figured a business plan would have also what I was looking for in borrowing and didnt know what to ask for to borrow (type loan, etc) so thats why I called them to see whats available. the main thing with them, it seems, is having a history of farming. But if thats required then why do they call them "First time farmer loans"?

raytasch, whats an angel investor? A rich uncle?
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Old 08-05-2008, 11:13 PM   post #5 of 19
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Default Re: First time farm buyer, how to go about it...

Rich uncles, friends, famly members should be considered. Go here to learn more about an angel. A comprehensive business plan will indicate to a potential lender that you have an understanding as to what you are getting into. Good luck

http://www.smallbusinessnotes.com/fi...elinvestors.ht
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Old 08-06-2008, 12:13 AM   post #6 of 19
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Default Re: First time farm buyer, how to go about it...

Edward a farmer ? .. have u been drinking again ??
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Old 08-06-2008, 12:31 AM   post #7 of 19
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Default Re: First time farm buyer, how to go about it...

I'm gonna grow dirt!
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Old 08-06-2008, 01:51 AM   post #8 of 19
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Default Re: First time farm buyer, how to go about it...

Edward,

I'm assuming this is in FL? Did they farm this acreage before and what did they grow? Just curious and good luck.
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Old 08-06-2008, 06:19 AM   post #9 of 19
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Default Re: First time farm buyer, how to go about it...

Contact you local Farm Credit Land Bank. They are in the business to loan money on ag land.
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Old 08-06-2008, 07:46 AM   post #10 of 19
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Default Re: First time farm buyer, how to go about it...

Edward, contact your local Farm Credit Services. They are in the business of loaning to first time farm buyers. Just google search (state) Farm credit Services and it will bring up several websites. Yes, you will probably need a business plan together to get the loan. But they really aren't that hard. If you have any questions just pm me and I'm sure my hubby can help you out. Good Luck!!
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Old 08-06-2008, 09:41 AM   post #11 of 19
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Default Re: First time farm buyer, how to go about it...

Quote:
Originally Posted by Greenster View Post
Edward,

I'm assuming this is in FL? Did they farm this acreage before and what did they grow? Just curious and good luck.
Out of state. Orchards at one time but now gourd crops mostly.
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Old 08-06-2008, 09:57 AM   post #12 of 19
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Default Re: First time farm buyer, how to go about it...

Quote:
Originally Posted by farmer2wife View Post
Edward, contact your local Farm Credit Services. They are in the business of loaning to first time farm buyers. Just google search (state) Farm credit Services and it will bring up several websites. Yes, you will probably need a business plan together to get the loan. But they really aren't that hard. If you have any questions just pm me and I'm sure my hubby can help you out. Good Luck!!
Thank you and fwinters for the info.

I was told by SBA they (SBA) dont loan for farms, but what if the business is attached? There is a home on the land...

But I will search that Farm Credit Services (thank you for the info) - the farm is not in Florida.

Its not listed for sale publicly, so I dont know how much info I ought to post about it. Sorry for being so vague.

But I can tell you its not in Alaska, so you folks who are PMing me asking me to grow Cannabis can stop. (j/k)

the FSA person yesterday told me they would loan on land value (in general they said that, not that they would approve me for a loan). I guess they dont take into account the business attached to it, which increases the sale price. However I think the cost to buy land with even existing crops would cost as much as this place, once you factor in the costs associated with building a business up to what this existing one is like. Yeesh thats not very clear but hopefully makes sense.

Its all something the wife and I had talked about doing many years ago. it never worked out. The desire is still there. I am not "doing this for her" as I think that would be silly - and could lead to disappointment if I did it for that reason and if it didn't pan out, and then I would not have her around to blame...LOL (j/k again).

I've decided when I am buried I want to be placed in the pine overcoat with my fingers in my ears and on the headstone a " " hehe

But I am going on what someone recently suggested to me and am pursuing this til the door shuts for good.
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Old 08-06-2008, 10:36 AM   post #13 of 19
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Default Re: First time farm buyer, how to go about it...

Again, good luck in your endevers. If you are looking at an existing operating farm be sure to do a very comprehensive 'due diligence.' If a purchase offer is tendered be certain you learn everything that is to be known about the operation. You'll only get one chance so do it right. You'll probably need professional help here.
Many times owner financing is the best case scenareo.
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Old 08-06-2008, 10:48 AM   post #14 of 19
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Default Re: First time farm buyer, how to go about it...

Edward,

Since I know hardly anything about farming but a little about business I would do a local search (maybe include neighboring counties) for new business, industry or farming that has listed a recent DBA with their local courthouse (and ran the mandatory newspaper advertisement).

Chances are pretty fair that someone has filed a DBA (Doing Business As) that either took over a farm, started one up or inherited it from a family member. I'm pretty sure they would love to talk about the hurdles and pitfalls of starting up as well.

Just thought I'd toss this out in the advent other sources dry up or prove difficult. Good luck by the way.

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Old 08-06-2008, 01:32 PM   post #15 of 19
Edward
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Default Re: First time farm buyer, how to go about it...

Thanks guys. this would be cool if it worked out, I think. But it be would allot of (good) work.

the kids; they want a little of everything LOL...farm, animals, sunshine, snow, beach, change of seasons..I dont think there is anywhere that you "get it all" (is there?). So if I move inland, I will have to put in a pool and truck in some sand and make my own beach
Hey didnt someone on here have a tiki bar or something? Maybe they can come help my build one
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