Buying New Farm Land
Well, we are in the exciting phase of searching for land within a fairly large radius around our current city - Kansas City.
One thing I feel fairly uncertain is about financing. When we sell our current property -- we will be able to pull out around $100k in equity.
We are looking for property with 50 - 75 acres and find most of the properties we are looking at are in the $150 -200k range.
So, we will need to borrow $50 - 100k to buy the property. Depending on how much we decide to hold back for startup capital.
I am finding there is a big difference between loans given for farm property and a traditional mortgage. Calling around it seems that there are very few national mortgage companies that write farm loans. So it'll be up to the local banks. It appears rates are much higher for these loans -- currently around 6%?
I cannot qualify for a FSA loan because i do not have prior farm management experience.
The final stumbling point that I haven't quite figured out -- is how banks will qualify me based on future farm income. I will be moving a long distance and starting out with the assumption of trying to make it on farm income alone possibly supplemented with odd jobs using my equipment running experience. I have access to skidsteers and Meyers tree saws used in pasture clearing operations. However, will not have any guaranteed income to prove being qualified.
Has anyone been in a similar situation and how did that work out? Any tips? Are the above info and assumptions I've made in line with what you have found?