As someone who has bought and sold farms, there are more costs that weren't included in the calculation you did. You need to add the following purchase costs: loan origination fees, interest payments, title insurance, property taxes, attorney's fees, (misc. closing fees), an appraisal if you are financing, potentially a new survey (always a good idea). When you sell the property, you will also be hit with title transfer fees, an attorney fee, potentially short-term capital gains taxes, a commission to a real-estate agent, and other closing costs. There is a very good reason why Warren Buffet doesn't buy hunting land properties. Unless someone really made a mistake and sold the property to you for much less that what it's worth, it's not a great investment. It's fun, but it's not a great investment compared to alternatives.
You make a couple great points, thank you for the discussion! The intent of the video was to give a 10,000 foot view into the numbers to be relatable. You're absolutely correct that there's more variables/line items but those net out with the conservatism we've built out. We also have done this 30+ times in 4 years so we are here to tell you there are material gains to be made. Regarding the agent fee - worth every penny of they are bringing you buyers you wouldn't otherwise have access to. But we definitely have done plenty of deals without.
Great video jeff. I work with a lot of land buyers as you know and I do this exact breakdown for them. So I can tell your followers you are spot on. Well done.
The great part about owning land is that you can enjoy it even if it does take a little bit longer to sell. So you're at least getting use out of it (vs a stock for example). The CAGR can get impacted so ideally it'd be 1-2 years
As someone who has bought and sold farms, there are more costs that weren't included in the calculation you did. You need to add the following purchase costs: loan origination fees, interest payments, title insurance, property taxes, attorney's fees, (misc. closing fees), an appraisal if you are financing, potentially a new survey (always a good idea). When you sell the property, you will also be hit with title transfer fees, an attorney fee, potentially short-term capital gains taxes, a commission to a real-estate agent, and other closing costs. There is a very good reason why Warren Buffet doesn't buy hunting land properties. Unless someone really made a mistake and sold the property to you for much less that what it's worth, it's not a great investment. It's fun, but it's not a great investment compared to alternatives.
You’re exactly correct and especially that capital gains tax. It’s a killer but you still can make big $$$ flipping hunting land.
You make a couple great points, thank you for the discussion! The intent of the video was to give a 10,000 foot view into the numbers to be relatable. You're absolutely correct that there's more variables/line items but those net out with the conservatism we've built out. We also have done this 30+ times in 4 years so we are here to tell you there are material gains to be made. Regarding the agent fee - worth every penny of they are bringing you buyers you wouldn't otherwise have access to. But we definitely have done plenty of deals without.
& thank you so much for watching
everything listed is done when buying any real estate.
Great video jeff. I work with a lot of land buyers as you know and I do this exact breakdown for them. So I can tell your followers you are spot on. Well done.
That’s how you do it!
Thanks bud!
& thanks for watching!
All strategic. I like it
Kyra Waynes 100!
Excited to see this plan come full circle
You & me both!
Thank you so much for watching!
This video was awesome. Fast full of info and to the point
That's very nice feedback thank you so much
And thank you for watching!
So much thought and planning goes into this!
Understatement!
Thank you so much for watching!
How many acres was the corn and soybean field? Are you going to try and rotate the corn and beans?
Great question! It's about a 12 acre field in total.
We won't rotate because the corn helps dictate where the deer come from
Thank you so much for watching!
Nice breakdown! What is the typical holding timeframe you project for your ROI?
This farm 1-2 years. Great question
The great part about owning land is that you can enjoy it even if it does take a little bit longer to sell. So you're at least getting use out of it (vs a stock for example). The CAGR can get impacted so ideally it'd be 1-2 years
Thank you so much for watching!
That real estate agent fee is the bad one. Cut that out and the rest are easy cheesy when you’re making 90k.
It can be worth it if the agent is bringing you buyers you wouldn't otherwise have access to! I
Thank you so much for watching!
Money talks
That & big deer!