Just wondering if that couple has kids, and if so, what that phone call would be like:
"We have good news and bad news. The good news is that Dad finally bought that 80 he's always wanted. The bad news is, it cost $1.6 million...."
The IRS will have a ball with that one, come estate tax time! At least they have great basis....
jrsiajdranch is right, I live 100 miles south of this area where the farm sold and they ALWAYS have some of the highest price ground around, Its a never interesting place to live, I don't believe they miss a crop very often, they use to have a lot of livestock feeding. Its a never unique place to live. There are places like that in America, there are also places that strive to keep everyone else out and keep prices so they are sustainable. Is $20000 an acre a crazy price, who knows I thought the last one I heard sell in that area for $16000 was crazy, then the two before that for $13000 that looks cheap now. Those are just the sales I hear of.
I guess if they got the money, and the banks are willing to bank them, then let them buy the land.
Farming isn't easy, I read he was a dairy farmer, I know a lot of people that work in town that really dont "earn" what they get paid.
I'm glad they got it, I have no idea why this sale is different then the $16000/ac one before, no one carried on about that one.
Some times than note it is ""the note""on the estate is the big surprise to unwinding a legacy and makes the inheritance tax ''pail'' in comparison--- is this a statement cash isn't worth anything---
OK so we have all stated our opinions on the land purchase. What I think is funny, for lack of a better word. Is the wife was getting a tooth filled? I doubt my wife would have not been at the auction with me knowing a pile of dough may be spent.
I live not far from this land and have ground in Sioux County. This is a very wealthy community and this land will not come up for sale again. It is also a prime 80. If you were to look at the income potential of this land vs. other poorer quality land in the US, it probably is not the most expensive. Along with good ground, we seem to miss all the major weather problems every year. Some years better than others, but never a total loss. On top of that, there is a cow, pig, or ethonal plant on every corner to soak up every bushel. We need exports to set the price, but there is no corn moving out of Sioux County.
Getting to $20k where $16k has been sold probably was painful, but not out of line if you went to the auction already comfortable with $16k. Will the land go down. I think you can bet on it, but that 80 was only for sale this week. If he can spread out his cost of ownership across other ground that was bought sub $2000 and is paid for, then he will be just fine. Corn and Beans will go down, but not back to 2 bucks. This guy is going to have this farm for the next 30 years and 30 years from now he will look just as right as the guys that bought ground in the 70's and kept it through the 80's.
Re: One lesson to learn here.
If you have money you have the option to do something just because you want to. You don't have to use good reasoning or logic. You just do it because you want to.
It's the same way as a guy buying a mercedes or porshe. No one argues that it must be a sound investment. No body argues about cash flow. It's simply people living their lives and doing what they wish.
I am happy that these folks have made this choice and are successful to the point they can make thios choice. If they are dairy farmers they have probably earned every cent. These folks deserve to make money, they did the work.
WE should rejoice at other people's success whether they did in a dairy barn or on an assembly line. That is what america is supposed to be like There is nothing attractive about second guessing what other people do.
Re: One lesson to learn here. Right on Kraft t
Agree with everything Kraft just wrote, this is America we are supppose to be able to buy what we want and if we fail we fail.
Re: One lesson to learn here.
Good perspectous Kraft-t --- as I traveled in other business and was say 100 to 500 miles from home ---none seemed to care if I had 1 acre or 5000---did my job and treated the locals with consideration and 95% of the time was equally treated back---rarely was the discussion of estate planning brought up much less how large or small one accumulates where---
In this part of Iowa, land values are immensely inflated because they have a lot of big dairies and feed lots that need ground for manure applicaiton. That is one reason land sells for more there than in other areas. The Des Moines Lobe probably has as good or better land at much less money (but still far more than I could pay).
Many, many factors involved in a sale of this magnifute.