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View Full Version : Thoughts on a possible additional(!) property



Heliodoro
Jul. 16, 2012, 03:04 PM
DH and I have a home, we love it. Just big enough for the 2 of us and the 3 cats. When it was bought, it was supposed to have 19.5 acres, in the end DH ended up with 9.5, most of it's wooded (it's kind of a sore subject...). The remaining 10 belong to a friend of the former Homeowner and remains mostly fallow, landowner (aka Elmer Fudd) comes out maybe 5x/yr to hunt and uses our driveway (for a fee we started last year). We've offered to buy the 10acres, it's a nice rectangle plot, great for pasture and riding, no dice. DH and I don't see this guy budging anytime soon... We've talked of leasing the land, but decided against it for the time being.

Now our good neighbor across the way is talking about the "what if's" of life since he's in his 70s and his children do not want/cannot take care of the family homestead, so he's talking about selling it in the coming years/when he becomes unable. The property consists of a huge house, I'm terrible at square footage, at least 3 bedrooms and 2 full baths on the main floor. Kitchen, dining room, bathroom and great room are in the process of being remodeled (new appliances, new floors, walls painted). 80+acres (probably closer to 100), most of it farmed by locals. Large well made barn that's ~15yrs old, used to store equipment and cars with a cement block. Smaller barn/2 car garage, not in great shape, but structurally sound.

I'm thinking neighbor's property could be the only way to get my horse at my own farm as long as Elmer Fudd is around... Briefly mentioned this idea to Mr. Helio, he's not totally opposed, but we have some serious discussions ahead. He really likes the idea of having Goober and future pals at home, or at least he keeps mentioning it. Neither DH or I want to live in the old farmhouse, it's nice, but we love our home, so the idea came about of renting the house out(which scares us a little), but using the barn for my horse(s) and some of the land for pasture and riding areas, keeping on some of the farmers (for tax purposes to keep it "agricultural") or we could possibly grow our own hay...We cannot afford 2 mortgages at the moment just to have a horse farm, I don't know many normal people that could/can.

DH is also concerned about the limited time we have now with both of us traveling 35min+ to full time contract jobs (read: no benefits and no security). He doesn't mind doing farm work, but just our "little" property keeps him busy in his free time. If I had a "breadwinner" paying job, he'd "be more than happy playing farmer." I don't. Not looking likely in the near future. I've thought of also the possibility of taking in a few(like 2 or 3) boarders, but I know that the liability may not be worth it in the long run. Also, I could "put a shingle out" as a LL trainer/instructor for more income, maybe take in one resale project from the track and flip it (I would have to have some sort of business plan for resale projects, ie: will spend up to $___ and then pony has to find new home, or only 3 mo training then sell).

Obviously, this is still in it's fledgling stages, but does anyone else see how this could work or are we just that delusional? if Elmer would just sell his plot, life would be sooo much easier...

Snowflake
Jul. 17, 2012, 12:22 PM
I'm in WNY too and have Elmer Fudd next door as well. He's a doctor in Lancaster and I've called him and asked him about buying/leasing 2-3 acres so I can be within zoning for horses in my town. He has 53 acres in total. No dice. The farmers behind me who have over 300 won't even sell the 100x600 piece I would need and I even told them I'd be happy to leave it as is - they could keep doing what they're doing with it but that it would be on my deed - and that was no dice either. Sigh... I know what you mean.

I'm looking for a boarding barn in WNY so if you do wish to take on boarders - let me know!

HPFarmette
Jul. 17, 2012, 12:37 PM
Ooh, Heliodoro, I would say get it if you can, "they ain't makin any more!".
Renting out the house would be scary if you get bad tenants and/or lots of plumbing etc. headaches. OTOH you might get great tenants and maybe they would be horse people and HELP. Then you and Mr. could go out of town occasionally! Leasing out most of the land to the current farmers=great idea. Prospect of raising your own hay? Excellent, but takes lots of equipment and labor....would one of the nearby farmers do it?

Are there any type of Farm Credit special mortgage deals for a horse farm?

I have similar cravings since there is a fabulous parcel next to me, with a 7 stall barn, currently locked up in legal limbo.

Wonder if I am near you.....

SMF11
Jul. 17, 2012, 12:42 PM
It sounds almost like if you bought this farm you'd have to run it as a business. I wonder if doing a business plan would help you think through all the issues. You'd want to work through the house issues (rental, work on it etc) the farm issues (what would be needed to keep it "agricultural", who would do the work, income streams if any) and then the horse aspect (savings in board, boarders? expenses?).

Heliodoro
Jul. 17, 2012, 12:49 PM
It sounds almost like if you bought this farm you'd have to run it as a business. I wonder if doing a business plan would help you think through all the issues. You'd want to work through the house issues (rental, work on it etc) the farm issues (what would be needed to keep it "agricultural", who would do the work, income streams if any) and then the horse aspect (savings in board, boarders? expenses?).

That's pretty much how I came to this idea of owning both properties. One would have to finance itself, we're not exactly rolling in $$$. DH and I have lots to mull over and it's not something for the immediate future at this point, most likely 5+ years.

Heliodoro
Jul. 17, 2012, 12:57 PM
Ooh, Heliodoro, I would say get it if you can, "they ain't makin any more!".
Renting out the house would be scary if you get bad tenants and/or lots of plumbing etc. headaches.
The house is in excellent condition. Like I said being mostly remodeled downstairs, geothermal was put in 2 years ago. It's the scary tenants that has me concerned.

The house is supposedly haunted, maybe that will weed out the deadbeats!

Leasing out most of the land to the current farmers=great idea. Prospect of raising your own hay? Excellent, but takes lots of equipment and labor....would one of the nearby farmers do it?
Growing hay = lots more work on our part. I know there are some farmers around here that grow hay (dairy country), but I just don't know the ins and outs of true farming life...yet!

Are there any type of Farm Credit special mortgage deals for a horse farm?
Something to definitely look into. I still have a VA loan from the Reserves I can use, they usually have pretty good rates. The farming out would help with taxes (NY!) in the long run.

Wonder if I am near you.....
We straddle the Nunda/Mt Morris line with access to the East side of Letchworth. Beautiful country!

Bolded mine

AKB
Jul. 17, 2012, 04:54 PM
I would look into putting your horses on your current property. You have 9.5 acres. It should not be prohibitively expensive to clear 2 acres and put in a barn. Buying the farm across the street would involve too much time and money, from my perspective.

suz
Jul. 17, 2012, 04:56 PM
sounds like a heck of an opportunity.
if i were you i'd snap it up and get a horse owning tenant to assist with horse care.

Robin@DHH
Jul. 17, 2012, 06:42 PM
Have you considered purchasing the entire property and
then selling the house and whatever amount of acres have
to go with it, then keeping the barn and land for your use
and for renting out the farmland. That way you won't
have a house rental to worry about but will have a nice
amount of land and what sounds like a nice barn.

tangledweb
Jul. 17, 2012, 07:58 PM
You'd need to love your current house a lot to make it worth having two separate properties.

The physical logistics of driving back and forth, just think of two separate electricity bills, two mail boxes, etc, etc.

Does being a non-resident farm owner have property tax implications where you are?

Selling your current house and moving to the bigger property outright is not an option?

Ambitious Kate
Jul. 17, 2012, 08:25 PM
Have you considered purchasing the entire property and
then selling the house and whatever amount of acres have
to go with it, then keeping the barn and land for your use
and for renting out the farmland. That way you won't
have a house rental to worry about but will have a nice
amount of land and what sounds like a nice barn.

I would consider this.

I would work up cost/savings plans for lots of options, such as renting the house, and doing the above.

Yes, you can hang out a shingle and board. With the right amount of boarders, you can cover the costs of your own horses and help with the costs of maintaining the farm. You would have to factor in building a couple of rings, but lessons and boarding is not a bad way to sort this out.

I would very seriously go over reconfiguring the properties. Start at town hall with the zoning of each property - such as commercial/farmland/business/and residential. For example, you may be able to build a barn based on your equity after purchase which has a gorgeous apartment over it, to rent. There may be many ways to get income from the properties - fields to lease, for hay, etc.

You need to research and think outside the box. I say investigate, and also don't delay. If the owner of that property is ruminating about this kind of sale, today, he may well act on it very quickly and very soon, if he gets a mind to. You may have to act fast, so do your homework now, so you know what you want to do, if it comes up fast. Also, you will know now if you DON'T want to do it, if it comes up fast, and you won't be bothered by doing your research under pressure.

Heliodoro
Jul. 18, 2012, 09:54 AM
Just want to make it clear, neighbor has just started talking about selling the place. He's in pretty good health for his age and is enjoying life. He has other responsibilities that lead to him not selling the property off right quick. DH and I are great friends with this man (heck, he was in our wedding party!) and his family, we regularly have cocktails and dinner together on the weekends, so we get to be the sounding board for his ideas regarding the place. In one week it has gone from "maybe in 10-15 years I'll sell it" to "I'm thinking, I'll just buy a Condo in FL in 2 years..." We're not making any rash decisions until we get the feeling he's serious on a time frame, he gets these wild ideas and then settles down in a few days.

We have already discussed buying part of his property that is on "our" side of the road, it's ~7 acres with a nice pond, owner is game for that plan. It will basically "box in" Elmer Fudd's field and maybe also persuade him to sell us that lot, which would make me happier in the long run. Elmer can't build on his lot, he doesn't have enough road frontage and we're not budging... I could try to make some pastures out of that space as well, but it would require some funky fencelines and serious walking to get to!

SMF11
Jul. 18, 2012, 11:42 AM
Another idea is to offer the owner a life estate in his farm. Meaning you pay a lesser amount (how much less is determined by an IRS table depending on the age of the current owner) and he gets to stay in the house as long as he wants.

Also, you could look into how a putting a conservation easement on the land might help you. The more development rights you give up, the bigger the tax break (it is not all or nothing, you can keep back three building lots, or one, or none e.g.).

Just a couple more ideas that might make the deal more financially attractive.