40 acres

[Mike Garrett RAA]

Famous Mikie-ism....."it is what it is" and "I can't make chicken soup out of chicken poop". Fee earned, spend it well.

 

[Ray Miller]

Those 40 acres could make that land owner $12,000 a year or more. If share crop could make $20,000 a year depending on input cost and what the market is doing. If they did corn and added a corn maze in the fall could make the owner $40,000 a year depending on location in addition to the cash crop.

I got my tail feathers burnt here last week for giving an AMC a heads up on a 9000 sq.ft $1.8M home in LaCrosse area by telling then there were no comparables within 75 miles in the past 3 years. That the best I could do were $800K comps in the area that was 2 years old. To hire an MAI to do the appraisal. Any way they didn't like my $6K fee figure if I would have done it. My mentor was happy I didn't tackle it. I did view the property over the weekend from the road. It would have been a true pickle to have done. It was on the highest hill that over looked the golf course and country club. It had more angles then most architects would put in a home and all on one story. It looks like it is going to be a nice place when it is done. You will need walkie talkie just to find your girl friend in that place for a brief interlude.

So when one of the Ducks are feeling frogie, don't feel bad about it, its there nature to jump.

 

[Brad Ellis]

Stefan,

Webbed is just kind of ornery today!

Today?

Brad

 

[Terrel L. Shields]

When I see threads like this I have to just shake my head. There isn't much chance that this so-called "farm" is economic in any sense of being a commercial farm....

It's a rural residential property period. It has a value that relates to the value of the land and the dwelling. No one will weight the income approach when buying this property. They want 40 ac. and a house. I don't consider this some sort of commercial property. It's just a homestead with a few acres.

In that sense it is no different than if they were raising poodles in the backyard and selling a few of them.....

But the question I have is so what? If Fannie doesn't want anything over 5 acres anyway, this ain't going fannie mae... So where is the loan going? Why are you parsing what the client is doing when no one seems to know what the client wants.

Appraise the stupid thing as a dwelling with 40 acres...value the acres by whatever means you like. Submit the report. Let them decide if it loan qualifies or not.

40 acres could make that land owner $12,000 a year

It could lose $20,000 if you get an early frost or a flood. IF IF IF a frog had a pocket to carry a pistol in, he'd wouldn't be afraid of snakes. Making/losing money on this is a hypothetical. The value of any farmland will be found within the land value itself. Trying to make it an income property is like making granny's mobile home into a MH Park.

 

[Midwest Guy]

I personally agree with you, however my professional opinion matches my state board. COMMERICAL FARM they say.

I asked about three acres tomatoes and roadside stand on the property. Commerical!

I asked about breeding toy dogs in a detached garage. They said H&BU should be considered.

At the very least, him mentioning any agriculture would kill the deal for the wholesale market and he is obligated to report it. If there is any farming it should be noted.

They want 40 ac. and a house. I don't consider this some sort of commercial property. It's just a homestead with a few acres.

In that sense it is no different than if they were raising poodles in the backyard and selling a few of them.....

 

[Michigan CG]

When I see threads like this I have to just shake my head. There isn't much chance that this so-called "farm" is economic in any sense of being a commercial farm....

It's a rural residential property period. It has a value that relates to the value of the land and the dwelling. No one will weight the income approach when buying this property. They want 40 ac. and a house. I don't consider this some sort of commercial property. It's just a homestead with a few acres.

In that sense it is no different than if they were raising poodles in the backyard and selling a few of them.....

But the question I have is so what? If Fannie doesn't want anything over 5 acres anyway, this ain't going fannie mae... So where is the loan going? Why are you parsing what the client is doing when no one seems to know what the client wants.

Appraise the stupid thing as a dwelling with 40 acres...value the acres by whatever means you like. Submit the report. Let them decide if it loan qualifies or not.

It could lose $20,000 if you get an early frost or a flood. IF IF IF a frog had a pocket to carry a pistol in, he'd wouldn't be afraid of snakes. Making/losing money on this is a hypothetical. The value of any farmland will be found within the land value itself. Trying to make it an income property is like making granny's mobile home into a MH Park.

Terrel, I will beg to disagree with you on this. We have land that has been farmed in the past. Most likely soybeans, corn or wheat in that area. High dollar crops, and most likely high dollar land. If you are sitting on the road looking at it and you have agricultural fields all around that tells you highest and best use if for agricultural production, not a hobby farm.

What is the land that is contiguous to the property? More crop land? The brother was farming it, so he has the equipment to do so. Would a person who only owns that 40 acres farm it himself? No, too much overhead. But a guy who farms 3,000 acres proximate to this property will rent it at say $150/acre/year with no risk to the owner.

The highest and best use to a buyer is to rent the land out to capture the highest productivity of the land. The highest and best use of the land might be to cut the house out and sell the remaining 38 acres at $5,000/acre.