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Mid mich. | I don't post on here much I don't nessecarily think we are going to repeat the 80s but I never hear anyone talk about the large principal payments on land and other non depreacatable items and the tax burden that comes with them. Also high interest rates Were deductible at least. I was fortunate to get my start in 1982 during lean times and learned first hand how hard you have to fight in this occupation in these times. Also I remember my parents had something called investment tax credits they where able to use from prior years ,most everyone these days have used a large portion of there deprecation via section 179 and a few even have equipment loans with no depreacation left Those of us that went through it and remember what it was like tend to be a little more guarded in times like these .
I am on a a bank board that does ag lending a real issue that will surface is the regulators aren't going to allow operating loans for people that can't cash flow multipal years in a row. There are requirements that bower must be able to show the ability to repay on a year by year basis. You need to have a very good relationship and trust with your lender to help,offset this if it is even going to be possible to do so . I can also tell you that banks severely discount your balance sheets because of the risk of asset deprecation . And the federal reserve has been warning banks about the land bubble
Sorry for rambling on , and to each there own we will see who is right in a few years .
Tim | |
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More now vs. then
