Iowa farmland value up 21% for year ending September 1st!

[stinkypete]

it might be up 21% measured in dollars, but that just means its actually down in actual value

[DcifrThs]

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it might be up 21% measured in dollars, but that just means its actually down in actual value

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actually, the actuality of the situation is an act perpetrated by the actors actually in charge of the actions, namely the actuaries who actually set policy in actuality.

Barron

[stinkypete]

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it might be up 21% measured in dollars, but that just means its actually down in actual value

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actually, the actuality of the situation is an act perpetrated by the actors actually in charge of the actions, namely the actuaries who actually set policy in actuality.

Barron

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i stand corrected

[mtgordon]

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this is not even close to comparable. the power of real estate is in the #s. a 21% increase in land value can be a massive return.

lets say it is $5k/acre (made up #s) and you own 100 acres financed w/ 20% down.

you put up 100k + fees/closings etc. (not counting benefits from renting which would obv more than offset those costs)

if the price increases by 20% (to 600k), and you sell in short order, you haven't made 20%, you've made 100% return

Barron

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Except that you paid a years worth of interest (say 6.5% on the 400k that you borrowed which costs you 26k) so you're really up about 75k. How is this different than taking out a load for 400k and buying stocks with it? Either one is basically leverage right?

[Phone Booth]

[ QUOTE ]
this is not even close to comparable. the power of real estate is in the #s. a 21% increase in land value can be a massive return.

lets say it is $5k/acre (made up #s) and you own 100 acres financed w/ 20% down.

you put up 100k + fees/closings etc. (not counting benefits from renting which would obv more than offset those costs)

if the price increases by 20% (to 600k), and you sell in short order, you haven't made 20%, you've made 100% return

Barron

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What's a typical LTV for a farmland mortgage? I doubt it goes as high as 80. Maybe 60-70? I also think purchase price in this instance would be higher than appraised value, which further knocks down leverageability.

[Jimbo]

[ QUOTE ]
this is not even close to comparable. the power of real estate is in the #s. a 21% increase in land value can be a massive return.

lets say it is $5k/acre (made up #s) and you own 100 acres financed w/ 20% down.

you put up 100k + fees/closings etc. (not counting benefits from renting which would obv more than offset those costs)

if the price increases by 20% (to 600k), and you sell in short order, you haven't made 20%, you've made 100% return

Barron

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Dear Barron,

I can get 4 to 1 leverage on daytrading or 2/1 on overnight or longer trades, so can nearly anyone with $25K for that matter. My examples are easily comparable to land and much more likely to profit from multiple transactions since the cost to buy and sell land is so much higher (both on a cost and on a percentge basis) than my expenses to trade stocks and options.

Jimbo

[john voight]

what barron said is kind of what i see in RE (he always posts clearer an more accurate). I mean with all the creativity RE allows for, you can find a good bargain (ov this is most important if your investing short term) buy 500k property (at a discount)for 5k down + closing/other charges, and sell w/ in 3 months. In which case you may possibly earn over 100%

Now, you really need to be experienced, have a solid network, and able to handle risk if you want to make it as easy as it sounds.

I cant discuss options b/c or stocks, b/c I have not done as much reading about them as I have about RE.

[Fishhead24]

Story County, IA
November 7, 2007

80 Acres sold for $476,000 ($5,950/Ac.)

» Click Here For Brochure (PDF

[Fishhead24]

[ QUOTE ]
Story County, IA
November 7, 2007

80 Acres sold for $476,000 ($5,950/Ac.)

» Click Here For Brochure (PDF

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By the way, FEI, the majority of Iowa farmland is bought with cash...........but with the increasing price and leverage of land, this is becoming less and less the case each month these days.

The grain markets are incredibly strong right now(soybeans and corn).

Staying with my forecast which is that this land will peak in the summer of 2009 and then level off and go downward for a few years.