“These are the times that try men's souls.” | 4166, you need to have a good sit down talk with FIL and see what he is living off right now from farm income. Then he needs to decide if he wants family to continue the tradition of family running the place. If he wants family to continue then he will have to subsidize the farm with selling it to you for a reduced rate with him packing the contract. Need to see what his actual draw if off farm income from current sales of cattle, milk, crops. Then see if you can come to terms on a monthly payment coming from milk check from you. Maybe your wife would be better quitting job and tending kids and help working on the farm. This all things that need to be addressed. You will also need to subsidize as well if you ask FIL to do so. That means living way with in your means.
Also with him packing the contract, he gets the benefits of just taking yearly payments, not a big lump sum that will get taxed harder, it will give you both options. If you default he will get farm back. However he needs to go in fully well knowing at anytime you could sell this farm for a big profit vs. what you paid for it on contract. If the man trusted you to give you a reduced price, then you owe it to him to keep in the family and don't sell it outsiders. Keep it for your kids if at all possible.
Try and stay as far away from banks as possible for this purchase. But you do need a working relationship with a bank and ready to get a operating loan if need be to help during tough times. If he trusts you to run his equipment, keep it maintained run it as long as possibly can, then when it comes time to trade pay him the salvage value you are going to get on trade difference. This will enable you to farm and keep debt down. Then look to expansion with your own animals, try not to purchase, with proper care, you should be able to increase slowly over time. |
young farmer
