I wanted to see if there was anyone that could offer some advice on becoming a first time land owner.

Background:
-my wife and I (29 years old) live in DFW. We would like to eventually buy some land and build a home on it. Basically, get out of the big city and raise a family in the country. I have a mobile job and cover central and north Texas, so commuting isn’t an issue for me. As for her, commuting would be a PITA, but if we can afford to, it would be great if she could stay at home with kiddos.

At first, I thought that I would like purchase 20-50 acres with hopes of throwing a few cows on it. But now I’m leaning more towards 75-200 acres so it can hold more cows and a larger herd. The cattle piece of it wouldn’t really be a serious income generating deal, but more for tax breaks and a little additional income. More of a hobby….I think!

As far as financing it, I figured I’d contact an Ag Credit union or land bank of some sort. I’m assuming that they would have better rates, (not sure thought). And from what I have read, a down payment for land is 20%, right? Another option I have would be to apply for the “First Time Farmers” USDA program AKA Beginning Farmers and Ranchers Development Program (BFRDP). Down payment for this program is 5%. The term of the loan is 20 years. The interest rate is 4 percent below the direct FO rate, but not lower than 1.5 percent. (that was copy/pasted from the website)

I’m not sure if I meet all the requirement of the First Time Farmers Program though. It says-- “all applicants must have participated in the business operations of a farm for at least three years out of the 10 years prior to the date the application is submitted”. I may have not earned an income for a farm, but I work for one of the Top 3 Ag chemical and seed companies. I deal with farmers daily and make chemical and seed recommendations all day long. So I am not too sure where I would stand in that regards.

Any and all advice is greatly appreciated!

I don't have any advice, but I'll be watching this thread to see what you (I) can learn. I'm interested in the same thing, albeit likely less acreage.

I know where 295acres of prime central Texas land is for sale.... For $500 I can put you in touch with the owner.....

^^^^ Great response! That being said, I'll do it for only $400.

For running a larger herd, I'd recommend trying to lease land.

We are leasing about 400 acres, and paying only about $3grand a year. Compare that to land cost (which would be about the same per acre), and I think we are getting more bang for the buck.

Still own your house and some land around it, but give leasing a try. We have a rolling 3 year lease where we are guaranteed the place for 3 more years after the check gets cashed each year.

Lands of Texas site: 75-200ac; covering Collin, Dallas, Denton, Ellis, Hood, Hunt, Johnson, Kaufman, Parker, and Wise counties.

Lowest price appears to be $250K'ish.

http://www.landsoftexas.com/texas/land-for-sale/?sort=4&lp=&dt=All&kw=&lpa=&lbed=&hpa=&advanced=1&ha=200&lhsqft=&la=75&hp=&style=2&state_id=48&pagenum=1&search=county&hhsqft=&getres=Search+Properties&hbed=&fs=1&county_id=5824%2C5893%2C5821%2C5956%2C5954%2C5823%2C5955%2C5919%2C5890%2C5892%2C5819&lbath=&hbath=

[This message has been edited by Finn Maccumhail (edited 5/30/2014 2:21p).]

^ plus another $150k+ for a house, road, etc.

One thing that is guaranteed in this world... we are never going to a substantial increase in the amount of land (even with low land reclamation projects.) Land value, therefore, by basic economics, should go up as the demand for space becomes greater (more people on the planet.)

I'd buy. And hold on to it. You can gift it to your kids.

Owning land ties you to the land. Gives you pride. Gives you a little square of this earth to say "this is mine." There is hard to put a value on that.

To your point about size... we run about 50 cows on 520 acres. We could run more (and have, up to about 80 head, which is enough for my Dad and I to handle) but have cut back due to the uncertainty of the drought. Heck, we were down to 13 head 2 summers ago, and have been selectively buying and keeping our heifer calves.

Whichever way you go, best of luck. It's a trip.

Oh, and there is a Texags sponsor that is an Ag Credit company.

"It's not revenge... It's the reckoning... - Marcus Luttrell, USN Retired.

Haha!! Reel/bellco I knew someone would make a reference to that other piece of property!

Thann-ya, I would definitely consider leasing some land, but I would like to have some around my future house. Not too sure how much really, but at least 40 acres would be nice. Still big enough to have a few cows. Maybe get lucky and have some wooded areas with a deer feeder a some deer.

Ducks-as for a home, I figured $250,000 for a really nice home. $250,000 in the country is probably worth about $300k+ in the city. I want to build something I can live in for many years. Maybe $250k for home and/or barn and $300k-400k for land.

Wadd-couldn’t agree with you more! I know I don’t “need” to buy land, but I would like to invest in it at a young age. I’ve got $ in my 401k and IRA’s and contribute mothly to each of them and the rest I have sitting in my bank account isn’t doing much! And yes, I was already planning on contacting them soon.

I really like that Waxahachie/Maypearl area, but I know the closer to DFW the more I’ll have to pay. Somewhere between 35E and 35W and where they join again down in Hillsboro would be ideal.

Thanks everyone for the info. Would love to hear from others!

OP, we did the same thing you are wanting to do.

Here is my advice:

1.) We bought land to do cattle.....

**** that. Get a piece that has Ag exemption and convert to Wildlife. Its easier. It's legit. And you get the same tax breaks. On top of that, you can foster promoting and preserving wildlife and habitat instead of mowing it down to dirt and polluting the county with cow farts....just kidding.

2.) Its a GREAT idea that you are moving out to where you are going to have land.

3.) Keep your acreage purchase small enough so that you can afford to build or buy a decent home with it. Make life easy...don't get some **** from 1940 that needs 'a little work'...it doesnt. It needs a LOT of work. Get something already fixed up or build new.

4.) Keep your land purchase sized such that you can maintain it with the free time you have.

I don't think many people have a solid handle on how much work is involved in maintaining property and fences and all the crap that goes with it...even with no cattle.

I have a neighbor that lives in Houston and bought 200 acres down the road from me. He was going to get cattle and horses and do the ranch thing and then build a house and move out with his wife and kids. Well, they have a few cows...and a few horses...and there's still a trailer sitting on the place. I don't know about you, but that sounds like it sucks to me. Why buy all that, do it half assed, and not even live there to enjoy?

I dunno....to each his own.

Also, don't forget to budget for 'extra' stuff your buddies in town don't budget for...tractors, equipment, etc.

Be prepared to spend your evenings and weekends at home doing stuff while your buddies are at the bar drinking and cutting up. Its not a bad thing...its just different.


[This message has been edited by BrazosDog02 (edited 5/30/2014 3:11p).]

Great info! I appreciate it!

So you get the same perks having the wildlife habitat as cattlemen do? I guess I have never really thought about that before. Do you have to have any type of CRP program in place? Or just a form of a habitat?

Do you have any other way of generating income off your property? I know that's not always a big deal to must, but in my mind if I could make $5,000-10,000 a year messing with a few cattle, then why not (famous last words, right?!)

I've had a cowboy tell me a few weeks ago that the easiest cattle operation would be to buy low birth weight steers and feed them out for 8-12 months. Get their weigh up and sell them. That way you don't have to worry about calving and such.

I would argue that you are not going to "make" $5-10K per year "messing with cattle." Expenses are just too high, especially if you have to buy hay.

You might gross $5-10K, but until that note is paid off, you aren't making any money...

This is an interesting thread. This desk jockey often day-dreams of doing this. My wife's a city gal so it will never happen.

You think? I’m oblivious to the pricing piece of it

How many head would you think a guy would need to make a little money on the side? 30-50? Or more?
Lets assume you have improved pastures and you don’t need to buy a bunch of hay.

I'd suggest buying an existing home on acreage.
There are rural properties with homes that fit your size requirements all over the place.
There is benefit to moving into a place that already has wells, fences, roads, out buildings, etc. You will also learn from the former owner or neighbors about maintaining the property.

You can learn what you like and dont like and spend your time modifying it to fit your needs rather than spending your time installing it for the first time and hoping it works.

[This message has been edited by PineTreeAg (edited 5/30/2014 4:17p).]

quote:

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This is an interesting thread. This desk jockey often day-dreams of doing this. My wife's a city gal so it will never happen.

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My uptown girl has opened up to it magically since she got pregnant. I guess the thought of private schooling in Houston is motivation to her.

fyi--Ellis County is a pain in the rear to get a wildlife valuation.

Challenges in your plan:

1)Cattle are expensive right now to start from scratch. Poorly bred heifers costs $1500 each. Herd of 20 = $30,000 upfront.

2)"Lets assume you have improved pastures and you don’t need to buy a bunch of hay."

There is no such thing these days. with improved pasture you have to fertilize seasonally (being in the ag business you can fill in your own $ on cost of fertilizer per acre). Then you need water (rain) for grass to grow. not something you can get a lot of these days. Improved pasture still goes dormant in the winter requiring you to feed hay or overseed in the winter. Your area of the state experiences much more freezes than my part on the coast. Our original farm maintains 25 cows on 160 acres. This is an irrigated farm with 50% improved pasture, about 25% annually planted in winter wheat or rye. We put up 160 bales for this farm alone, feeding on average 3 bales per week in good weather December through March.
Good hay runs $60/bale.

I'm lucky enough to inherit into the family business (while still having my desk job) and have no idea how i would be able to afford to build something from scratch.

I dunno maybe its just the 4th generation farming in me that scares the crapola out of me anytime the thoughts of loans and debt come up.

You are certainly welcome to look into it, but I doubt you are eligible for the young farmer thing because you are not farming. And the land bank guys can chime in but I think they require 20 to 25 percent of their appraisal for the down payment, regardless of purchase price.

quote:

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Owning land ties you to the land. Gives you pride. Gives you a little square of this earth to say "this is mine." There is hard to put a value on that.

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Al long as you pay your taxes, anyway.

To get an ag exemption, your land will have needed to be used primarily for agriculture for the previous 5 years. If you buy land that is not ag exempt at the time of purchase, you will need to farm or ranch it for 5 years and then apply.

For wildlife exemption, it will need to be ag exempt first.

Haven’t thought about that much PineTree, but I guess I need to keep an open mind to it.

Ursusguy I was afraid of that. And I think Ellis Co has one of if not the highest tax rates in the state!

Agy-you're exactly right. Improved pastures are only good with good rain and we all know that rain is never consistent in TX! -1)Yes, probably the worst time to buy cattle. No telling if the market will come back down in the next 8-12 months.
So at $60 a bale X 3 bales a week = $180 X 4 weeks a month = $720 X 4 months a year = $2,880 in hay expenses.

What if I could find a place with 20-40a of row crop where I could plant wheat for grazing (dec-march) and 50 acres in pasture for grazing. Bale up the wheat if it is good enough. Heck, it was 40 bu or more, I would probably take it to harvest. But then the cost of a custom combine might make me rethink that. Not sure what kind of quality wheat hay makes, but if I could get 3-4 bales on 20-40 acres, it would have a decent amount to feed later in the summer. Depending on my stocking rate, that wheat hay might last 3-5 months.

For the guys that raise cattle, what would be the minimum about of cattle you would be willing to mess with in order to make some form of income off of them? I know some guys might make their living off of cows, so their numbers might be much higher compared to the weekend guy.

Is 20 head worth fooling with? How about 50? What would your break-even be? Again, I guess you have to ask what you main objective is. Do you want to put some cash in your pocket or just mess with a few comes for taxes purposes?

Assuming we had decent rain and an average cattle price, how many acres would you say you would need to run your given amount of cattle on?

$60 a bale? Is hay going for that low lately? Fortunately we got just enough rain to get some vertical hay.

Scmelba...you are right. But with the ag exemption, it's reasonable for us in Medina County.

If you have to buy cattle, it's gonna suck. That's why we have been keeping our heifers, even at the prices these days.

I have 9 cows left now down from about 25 a few years ago. I have in my budget to make $360/hd this year. 25 is the same amount of work as 9 so yeah, it's probably not worth it now.

Here's a link to some crop and livestock budgets the ag extension puts out. Maybe help you out a little.
http://agecoext.tamu.edu/resources/crop-livestock-budgets/budgets-by-commodity/

Real expensive and time consuming to get into cattle. If you have zero experience, you need help from someone that knows cows. Think pulling a calf out of a heifer that gets stuck. Yikes.

I'm living out on my Dad's land now and he loves having someone that can take care of stuff not just on the weekends, which is the only time he can get out here. As others have said, maintaining land takes a lot of work, time, and money especially if you have some sort of livestock on it. Don't think you can jump into cattle and start turning a profit on day one.

OP I would recommend you get this book:
http://www.amazon.com/gp/aw/d/1603447954?pc_redir=1401376872&robot_redir=1
This was required reading in my AGEC 422 class and has lot of tips and information for first time buyers (and even seasoned people too). It's a good resource that can remind you to think about factors or conditions you might have overlooked during your initial projections.

But most of all good luck, I and I'm sure a lot of guys on this board too, love living out in the country. It beats the city hands down.

[This message has been edited by Agfan2013 (edited 5/31/2014 9:40a).]

Don't have heifers if you don't want to pull calves. I mess around with a few cows. Have 20 head. Plant few oat patches in the winter for deer and graze them. Didn't feed but 10 bales all winter and really wouldn't have had to do that. I lease a 20 ac pasture that I planted in jigs where I cut a minimum of 20 bales(drought years) and normally get 50 bales. I normally keep 2 bales per cow and sell the rest at $75per bale. The money I make has always gone back into my land improvements. Which would come out of my pocket one way or another. As for time, I really do t do much. Work them twice a year. Go look at them a few times a week to make sure everything is ok and move pastures. Maybe I'm doing something wrong. I pretty much break even every year if you figure all the "stuff" my farm buys and improves.

To answer the earlier question about wildlife....YES, you get the same tax benefits as cattlemen. But it's not just filing out a form. There are forms but you have to meet with a biologist to check you property size and decide what things you need to do to qualify and actually do some good. And you have to do it. They will come out occasion lay and make sure it's being done. I know for me since I have done simple things like deferred mowing I have gotten better grass, more flowers, more wildlife, butterflies, etc.

You have to redo you forms and plan every year and document what you are doing. By most accounts it's more difficult than just having cows and and ag exemption. When my hives are enough in number, I'll go back to regular ag exemption for ease.

For is we have a few large gardens and bees. We sell overflow veggies and chicken eggs and honey. It's not to get money so much as not wasting our extra. The income basically pays for the hobby of having bees and gardens and chickens. Which mean they cost nothing. And that's fine.

[This message has been edited by Brazosdog02 (edited 5/31/2014 9:55a).]

[This message has been edited by Brazosdog02 (edited 5/31/2014 9:55a).]

Oh and the depreciation on my taxes is nice. At one time I lease some land and had close to 200 head. Unfortunately lost that lease and sold everything. I would think the economics are there to make a little if you had 50-100 head. Having 20 head is about the same work as 100 if you don't mess with a bunch of heifers. If rather buy a 4yr old bred cow and sell my heifer calves. Also if you do have a good wet years I like buying heavy bread broke mouth of ss cows. You can buy them cheap and turn them for a profit pretty easily.

If you don't know anything about cattle, I would suggest not getting cattle until you do. Awful expensive to learn as you go in the biz.

I'm about to "buy" a heifer from some friends and they'll keep her at their place in return for some work when I am available to help. Ie: the other day I went and helped them load, in the mud and muck, a pen of heifers they sold and then went to drop them off at a ranch in Stockdale. Week after next we are going to separate the bull calves out, and I'll probably pick my heifer then. I helped them find a deal on a replacement bull, and taught them a little along the way. Its their way of paying me back.

I'd start learning all you can and volunteering to do some hard labor in return for knowledge on the cattle side. That and take the short course at TAMU.

I'm in a similar position. I can't decide if I want to move farther out of BCS or just buy a weekend place. I've been looking for places that I could put in a pond, shoot, atv, hunt and try cut hay instead. Grass doesn't wander into the road or have calves at night in the freezing rain. The wildlife exemption is a great idea too.

We had cattle growing up. Even 10-20 head can be a lot of work. Living on the property will help. But, most hobby ranchers I know rarely make much money. The tax benefits help. Personally, I don't think I want to mess with animals.

Cattle or not, there are so many things to think about, pay for, and keep up like fences, water, pasture quality, neighbors, wildlife, mineral rights, utilities, equipment, barns, and more.

Regardless, the cost is absurd and only getting worse. But, worth it.

[This message has been edited by kyledr04 (edited 5/31/2014 8:03p).]

For those that may be up in the DFW area, and may be interested in the wildlife tax valuation, there will be a related workshop 8/22 up in McKinney. I'll likely be speaking on a general overview of the wildlife tax valuation. The general emphasis this year for the traditional wildlife management segment is grassland restoration and brush management. Additionally, we are holding a special segment on the "Opportunities and Challenges of Hunting in Suburban Counties". This segment should be interesting. We will have an Agrilife agent who specializes landowner legal issues speak on liabilities. Another speaker talking about the future role of hunting in these counties, and hunter expectations. And a combo game warden/biologist talk on dealing with special challenges. The final session will be a fairly well known feral hog expert.

I'll let yall know more later on if yall are interested.

There is a lot of good information in this thread. I'll add my opinion as well (as someone who has a full time job and ranches on the side - possibly to change soon however):

1. If you have limited resources, you need to buy a place that you can afford to pay the land payment without income from the cattle and understock it significantly. Understocking reduces your labor involved with the cattle, reduces the need for cross-fencing and suppresses weeds and brush. (Not to mention reduces your up-front cost for the cattle: fewer cows = lower cow note.) Mature cows with low-ish birthweight bulls can pretty much take care of of themselves if they have enough pasture. This will also help out if hunting is a priority.
2. Water is the most important thing there is. If you don't live there (and even if you do), you MUST have reliable, non-well water in each pasture with multiple days (preferably weeks) of water in reserve. Otherwise, if you don't live there you're checking water daily. Same with fences. If you don't have good fences, you're on fencing duty regularly.
3. Don't forget costs associated with trailers, cattle pens, etc. Those are barriers to entry to the cattle business. You can't get around the pens issue if you don't already have them (well, you can use borrowed cattle panels) but try to borrow or hire a cattle trailer if you only have a few head.
4. Profit motive and taxes - you're going to have to show a profit (3 of 5 years IIRC, but there are exceptions for people under 35 starting out) to the IRS on Schedule F. Fortunately, you get to deduct the interest portion of the land payment off ranch income. Unfortunately, you also have to claim the principle portion of your payment as "income", even though you have negative cash flow. This can make you profitable, but still be cash negative after paying Self-employment tax (15.3%, thanks government) and your highest marginal rate on the extra "income" from farming and ranching.
5. Unless they are in like-new condition and/or of durable, low-maintenance construction, existing barns and houses are a liability, not an asset. Trust me on this one. Anybody need some barn wood?

In short, have a lot of extra money anyway, don't expect to make any extra cash (expect the opposite, actually), build everything new with metal and masonry, and pay extra to get big bodied, cross-bred cows that can reliably calf unassisted. Do that, and you can maximize the pleasantness of your country living experience.

[This message has been edited by SWCBonfire (edited 6/1/2014 10:33a).]

We are finishing up building on our small piece of land so we've basically been there done that in the past year.

On the ag exemption, the test is 5 of the last 7 years must be ag use. You could buy it from someone who is not currently using it for ag so it's not in ag status but if at the time appraisals come out you start using it for ag again and 5 of the past 7 years it has been used for ag, then you're good to go.

On wildlife management, many counties hate this and are real pitas about it. Ask me how I know. It's a lot of work for them vs. just driving by and seeing animals/crops so they like to make up their own rules. Minimum acreage is a common one for them to scare people away from wildlife. There is NO minimum if the acreage was not reduced in size compared to Jan 1 of the previous year yet they will shoot you down the instant they find out you don't meet the minimum acreage. May take a lawsuit to force them to comply with state law. It's also not a walk in the park for the landowner. Well I guess yesterday was a walk in the park for me since I walked up and down 8 acres of pasture so that I could finish up our fire ant treatment for the spring. We have trees to plant, cactus to dig up, cedar regrowth to tackle, discing and reseeding that needs to be done, a berm that needs to be built. But hey, I have chickadees, cardinals, titmice, wrens, bluebirds, and all kinds of other birds singing to me in the morning and this morning through the window I watched turkey stroll by. Another thing to note is that for wildlife management, there is no 5 of 7 years test, land must have been ag exempt the previous year.

Last, your 250k budget on building a house is not going to get you a "real nice" house but I guess that depends on your definition of real nice. You will easily eat up thousands and thousands just to get utilities and septic to the house. We built a 2350sqft 3/2.5/2 (no other rooms in house, no office, formal dining etc just the bedrooms, bathrooms, open living/kitchen/dining, and a large utility/laundry) and we already had excellent fence, septic, electric, water, shop, and gravel drive and we've spent more than what you're estimating.