Verified FBN Member (KS)
Business

What are your general rules for land purchases in regards to down payments/ length of amortization?

Verified FBN Member (IA)
(edited)

Enough down payment and enough amortization to make it cash flow on avg prices and avg yields. Or need to subsidize it some how. Off farm income or paid for land.

For me on my first farm a couple years ago... %5 down,

FSA beginning farmer loan 40 year amortization @2.5% on %45 principal

local bank on the other %50 principal 30 year amortization.

That’s the only way it would pencil even close for me without extra cash flow in. Good luck. It would have been tough for us without that FSA program. A lot of hoops to jump through, but if the opportunity is there it’s worth your time. When do buy the neighbors ground? When it’s for sale!

Verified FBN Member (KS)

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