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| Reps come around periodically out of Omaha and KC. They represent investors who have pooled money. Basically the lease back is a very situational tool where the producer's payments are too big, so they buy land from the producer and lease it back to fix their cashflow issues. The biggest issue with their offering is they will not pay prevailing market price, at least not in western IA, yet basically want market rent. They claim, since they are guaranteeing the producer will get to lease, they should be allowed to buy below market value. Although I would caution everyone to have an attorney review the fine print first.
I've never done business with one of these companies and I've never even shared their card with customers who do have severe cashflow problems. Every time there has been an alternative better solution. In fact, I'd argue most of the time just selling at fair market value is a better alternative.
Most recently when a rep came around, he admitted to me that most deals are being done in the southern US and very few get done in IA. They weren't willing to pay even 75% of recent auction prices at that time. | |
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Farm leaseback companies
