Buying an Ag Farm-how determine what farm storage buildings are worth (for rental)?
The never ending search for a property continues...
FYI--This is horse related, because I will ultimately turn this into a horse farm . I'm looking at reaching out to someone who has a working ag farm that has multiple bins, quansett (sp?) machine shed(s), etc. and would like to propose a deal to buy the entire home site (they are not living in the home anymore--have a new one elsewhere but still farm) and rent back the storage to the current owner until he retires in exchange for an option to purchase additional land at a reduced rate, or something along those lines.
My problem is I have no idea what a storage rental is for something like that. Anyone know how you find that type of thing out? Over a dozen grain bins, 100x50 machine shed, 60x40 machine shed, etc.
Anyone have any big red flags pop out at them with a deal like this? They would need to maintain the extensive gravel drives, as they are the ones driving semis/combines/tractors on them...that's all I've thought of so far. Mowing around all that stuff would fall to me I think.
I highly doubt he will give anyone an option for land at a reduced rate sometime in the future, maybe first refusal. The outbuildings and bins are worth whatever the market will bear, your best bet is to offer it to the farmer as part of the purchase. Make sure that there is a limited time frame, I would say 1 year, and by then you would have a better understanding of what is available in your area and what it is worth.
Keep in mind sometimes it is better to have great neighbours who are willing to help you out then it is to have a few bucks in your pocket. My bestest farmer neighbours have sold their spread and will be moving away this summer. I am going to be lost without them.
I'm sure you are right. A girl can dream. I realized I didn't mention I was also thinking with the additional land that I would rent it back to him for up to 10 years as part of the deal. Or whatever...just brainstorming. I don't actually need the additional land right now, but it would be really nice to have an option to purchase it in x years for FMV or something like that.
They are older and none of the kids live around here (or farm), so I could see them going for an option to purchase...