Advice - Wanting to by some land SD 160-240 acres West River

T

tanner10

New member
I am at a point in my life where I want to buy some land in God's Country (SD) and enjoy the great outdoors, a little farming, increase habitat, etc. With the going rate per acre not sure how to make it cash flow.

Open to some guidance from the experts..
 
I'll it to others to ecourage you. I doubt there is anyway to pay the purchase price on farm ground and make it work. The agricultural markets are cyclic, unstable, current cost of ground is way to high. You might find yourself in a financial vise and have to resort to agricultural practices which you won't like. It's also possible to find yourself making payments on land which has devalued by 50%. Agricultural is a cash business, your cash keeps you in business, during the down turns, financial leveraging in farming is a poor practice. If you want to do habitat, I am all for your, buy what land you can or can afford on your "other" income, create habitat, make crop income when it's a good year. Or find a farmer who is older, not leveraged, who has your ideas about habitat, become an apprentice, with a purchase contract to eventually buy him out, giving him or his heirs, an annual income downstream. You will use your work equity to provide equity, knowledge of the property, and do the good life now. Good luck. I thing there are a lot of us who have the same goals, some of us get older, or have obligations to make it impossible, and many have no access to get started. Some states have agencies to make introductions to the apprentice farmer program to bring people together. If you have to buy it, and are young enough, wait, accumulate cash, someday it will be less, but might not necessarily tomorrow!
 
Follow your dreams. I bought some land a few years back when so many said it was a poor investment, wouldn't work, didn't know what I was doing, land will be cheaper and it isn't worth the hassle. Well I'm glad I did as it has been great for me.

If you do buy some land good luck. Also if you get half as excited and proud of what is yours as I do mine you will be very happy.
 
Thank you for the advice thus far. Father is very ill and have not had time to think or reply...keep the advice coming!
 
Land prices in SD have gone crazy. I would say there is no way to cash flow it unless it's all into ag production. And then a down turn in commodity prices could jeopardize that. Here's an example of how nuts it has gotten. Last fall there were 2 quarters NE of Aberdeen that were auctioned off. These two quarters were not adjacent to one another. One quarter went for $13,000 an acre and the other $14,000 per acre. One of the buyers was a doctor and the other a farmer. This is the extreme but it shows you what is happening. Typically that land would probably sell for $4,000-5,000 an acre, and even that is high and tough to cash flow.
 
West River land too my knowledge is not selling anywhere near $13,000-14,000 acre more in the $2,300-2,800 range and I think it is underpriced at that range. If your after pheasants West River land is perfectly adequate and to my observation may be better due to different farming practices/requirements. Where you have more row crops and less nesting it isn't rocket science that you will have way fewer birds. My land didn't cash flow 12 years ago but it does now but when I bought it I didn't care I wanted something to work with myself.

When you find a piece that you really like go after it as a friend told me you may never get another opportunity as some of this land only comes up for sale once in a lifetime. He also said if you can't hold on to it and it is good land you can always sell it.
 
Know that family that bought it. Funny thing is the word got out that the son wanted the land at no cost being too much. So it was said a group of guys banned together to make sure this happened. I bet those prices would of been normally 9-10 normally.


Dakotazeb said:
Land prices in SD have gone crazy. I would say there is no way to cash flow it unless it's all into ag production. And then a down turn in commodity prices could jeopardize that. Here's an example of how nuts it has gotten. Last fall there were 2 quarters NE of Aberdeen that were auctioned off. These two quarters were not adjacent to one another. One quarter went for $13,000 an acre and the other $14,000 per acre. One of the buyers was a doctor and the other a farmer. This is the extreme but it shows you what is happening. Typically that land would probably sell for $4,000-5,000 an acre, and even that is high and tough to cash flow.
Click to expand...
 
I don't care if it's 10,000 an acre or 1500 per acre, in that area, it's too much, no lender will finance it more that 35%-60% LTV, depending on how bold the are. Do yourself a favor, make your cash flow on market basis 7-10 years ago, if it makes sense, do it. If you buy farm ground to day, may be you should buy gold in a deflating market, farmland isn't deflating currently, but it might be closer than you think. To win in farming you need to be a "contrarian "investor. Doubt the current wisdom, assume that things will change and be prepared.
 
due to my father's illness..passed today I have been inactive.

I did get the results from the auctioneer that sold the 3 tracts of land. 2300 per acre for tract 2 (640 acres), 1825 for tract 1 (640 acres) and 1,450 for tract 3 ( 240 acres). Tract #3 only had 128.7 tillable acres.
 
Sorry to hear of your father's passing. I bet you would've liked to have shared your thouhgts of buying some land with him.

Was the land you referenced that which just recently sold in Jones county?
 
I didn't go to the auction but I did talk to a fellow that went. Seems like land is still creeping up in price. Eight -Ten years ago when I looked at land in Jones County what comes to mind was you could have bought most decent farmland in that area for around 750-900/acre.

I'm not aware of much land for sale right now but surely that will change as there is always some reason someone wants to sell.

At this time I think the market is going to be dominated by other land holders or farmers as compared to pheasant hunters as buyers.
 
You must log in or register to reply here.
Back
Top