Got a call from a family friend who knows that I sell a fair bit of oats to people in tote bags. Said to come over and pick up some empty bags he had from some product he bought in the spring. Low and behold, he had empty bags for me, but also used the opportunity to ask if I wanted to rent more land.
Started out by saying that he had one more year left to farm, and then he would be packing it in. Asked if I would want to take on his rented land this year, and then his own land the following year. I was awe struck, and kinda froze for a bit. A befuddled "Of course" came out of my mouth after a small pause, but I couldn't help but think how I was going to manage this. This would be adding 50% to our grain land base.
It ended that he would put in a good word with his landlords, and that his favorite time of year is seeding and watching the crops come up. He was hinting that he would like to come and help run the equipment spring and fall. This settled my fears, as it would help immensely to have a seasoned veteran at the helm of a seeder in spring, and a combine in the fall.
After having the time to think about it for a few evenings, I thought back to our conversation and he had mentioned how he was working on some of his equipment to get it ready for his auction after this year, and I started thinking. Is an auction really necessary? I could use the extra equipment to take on that much extra land, and he wouldn't have to go through the stress of an auction.
My question is, would he benefit by financing me on his line of equipment? Spread it out over a few years instead of one lump sum? Or maybe he could lease it to me instead to gain a tax advantage? Just spit balling, trying to come up with a situation advantageous for both of us. What I can come up with is that he would still have the same amount of recapture whether he had an auction, or financed me over a period of time. Am I right in thinking that there is no benefit to him to finance me?
Another thing bothering me is a good friend separate from all of this had made it known to me if this guy was to retire, he would like to take on the land he was renting. I don't want to lose a friend over a land deal. But when someone says they are going to pull some strings to get you some land, it is very hard to pass up. What would you do in that situation?
Started out by saying that he had one more year left to farm, and then he would be packing it in. Asked if I would want to take on his rented land this year, and then his own land the following year. I was awe struck, and kinda froze for a bit. A befuddled "Of course" came out of my mouth after a small pause, but I couldn't help but think how I was going to manage this. This would be adding 50% to our grain land base.
It ended that he would put in a good word with his landlords, and that his favorite time of year is seeding and watching the crops come up. He was hinting that he would like to come and help run the equipment spring and fall. This settled my fears, as it would help immensely to have a seasoned veteran at the helm of a seeder in spring, and a combine in the fall.
After having the time to think about it for a few evenings, I thought back to our conversation and he had mentioned how he was working on some of his equipment to get it ready for his auction after this year, and I started thinking. Is an auction really necessary? I could use the extra equipment to take on that much extra land, and he wouldn't have to go through the stress of an auction.
My question is, would he benefit by financing me on his line of equipment? Spread it out over a few years instead of one lump sum? Or maybe he could lease it to me instead to gain a tax advantage? Just spit balling, trying to come up with a situation advantageous for both of us. What I can come up with is that he would still have the same amount of recapture whether he had an auction, or financed me over a period of time. Am I right in thinking that there is no benefit to him to finance me?
Another thing bothering me is a good friend separate from all of this had made it known to me if this guy was to retire, he would like to take on the land he was renting. I don't want to lose a friend over a land deal. But when someone says they are going to pull some strings to get you some land, it is very hard to pass up. What would you do in that situation?
Comment