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Floyd County, Iowa | Bear in mind that I'm not an attorney, but here's my thinking.
Dad's half of farm is worth $500,000. You would buy his half for $500,000.
Dad's half of mortgage is $150,000. He pays that off with proceeds of sale, and pays off his half of operating loan for $50,000, also with proceeds of sale. This means that you'd have to have $200k down payment, unless dad has enough cash to satisfy credit obligations, without your downpayment.
Dad has $300,000 cash left ($500k sale of property - $150k mortgage - $50k operating loan).
If dad has some of his operating loan used for fall applied fertilizer, seed, etc, you would pay him that, in addition to property.
You have a mortgage of $500k for the land. You will also have to have an operating loan for your expenses, some of which you may be buying from dad (fall inputs, etc).
Dad's machinery is still his to keep (for whatever reason), or to sell.
You would have to talk to creditor (bank, etc) and attorney about just taking over his debt, and working out the details of such, if it can be done. My way of thinking is to have a clean cut sale and purchase, just like if you were buying a neighbor's place. Could be wrong, you'll just have to get professional advice.
my 2 cents, for whatever it's worth. | |
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Rock in a Hard Place: Suggestions Please!!
