Tuesday, May 31, 2016

Finding a Prairie Home

We've found an ideal acreage. That's the short story. The longer one is it's near a paved road, not far from Lincoln, has a pond, rolling hills, (overgrazed / weedy) fields, clumps of trees, an old barn that's screaming for weddings and workshops, a perfect area for a display garden / hoop houses, good locations for an artist residency, and a house that's falling in. It's a place to live for a long time, to steward, heal, and nurture.

Maybe it's not wise to be so transparent or open, but other folks in similar situations have documented their process on blogs and it's been a big help to me as I learn about options and what to expect. It is clear that lending has changed significantly in the last ten years -- as in, it's harder to get favorable conditions that leave one with working capital to make improvements on land. And a land loan is far harder to find than a regular home mortgage. The land we've found has an older home that's in structural trouble, and if it wasn't on the property would make the entire parcel far more feasible.

Most lenders want anywhere from 30% to 50% down payment. The good thing about 50% down is it makes for a much smaller mortgage payment, the bad thing is you don't have money to fix up a barn, put in deer fences, purchase equipment, etc. I wonder if lending institutions prefer to lend money only when you already have enough. I'm also asking myself if this a matter of commitment. We could live in an RV on the land and that'd work, but we'd be miserable -- esp with three beloved cats who don't like each other. Ideally, we'd stay in our current home until next spring, taking the rest of 2016 to clean up the site and make improvements. Some of the land could be grazed and / or hayed, I think, to pay for a good portion of property taxes. And my projections show a nursery could easily, even in its first spring, cover the first year's payments. I fully expect the garden design business to keep growing.

FSA loans are great -- 5% down and good rates for beginning farmers -- but you have to farm for human consumption. So corn, soybeans, animals, vegetables. It seems like diversifying rural entrepreneurship might be a wise investment, especially with crop prices falling, land prices rising, and folks flocking to urban centers. There are places that offer smaller loans for improvements, but that's probably down the road. We'll keep looking. If it's meant to be it's meant to be.


Jean Campbell said...

I hope it works out for you. Can you get an FSA loan and hire someone to plant and in subsequent years harvest something like hay? Or lease the tillable land to a nearby farmer? FSA rules allow you to be in control without doing all the actual work; they can explain it better than I.

Benjamin Vogt said...

Jean -- I just had FSA tell me this morning I had to do the farming work, could not rent it out. Right now it's a brome / fescue mess -- I guess that's hay-able, but not much income. It's overgrazed I think, thus the problem. Obviously, corn or soybeans would provide a clean slate, but I'd only use it as creating that slate if it was the best option. The prairie would give us a seed source.

Kezar Lady said...

We purchased some Maine acreage 12 years ago. It was forested but had been logged within the last 40 years. There is a stream running through it with active beaver,otters porcupines, fisher,moose and many deer. We wanted to provide open fields for ground nesting birds and an area of regrowth for grouse and hare.
We found the federal government has many programs to assist in these types of activities. The Natural Resource office alloted monies for clearing and mowing of our meadows. I planted all native wild flowers for pollinators and butterflies. It is one of my "heart places". Despite the abundance of ticks, I spend a great deal of time there - pleased and a bit proud.
So,just do it. I know from your blog and other internet postings that you will relish this opportunity to do your prairie thing!! And I will come visit!
Linda Wurm

Benjamin Vogt said...

Linda-- I'm glad you found your heart place; surely spending time there over years draws forth the connection. We know there are ways to restore the land, but it will take a ton of time and patience; the immediate challenge is, of course, starting so we can get to the later stages. Come visit!

KatzeKitty said...

Have you looked into peer-to-peer lending? https://www.lendingclub.com/ is best (prosper.com has many states around here that restrict lending and/or borrowing, like IOWA). This could be a way to fund the work that needs doing, maybe some of the purchase price itself. Your supporters would be investing in something they believe it without giving an outright donation.

Jane Yule said...

Have you inquired at the Center For Rural Affairs in Lyons Nebraska to see if they could advise or help you?

Benjamin Vogt said...

Jane -- Yes, I have, but their main guy is out of town so I'm just waiting to hear back. :)
Katzekitty -- TY! I'll check these out! We are close but so far away. And I feel like we need to have the land before we can plan things out, and know what biz loans to go for or what kickstarter to run.

L.H. said...

We recently bought an undeveloped acreage by Ft Calhoun, NE with a traditional 10-yr land loan through CORE Bank at 20% down. Hopefully there are other options that work for you out there.

Diana Studer said...

Is this it? You have decided? If so, congratulations.

I look forward to following the story as you 'make' things happen.

Benjamin Vogt said...

LH -- I hope, just have to keep looking! Jealous of your spot up north (where I bet land is a lot more affordable).
Diana -- I wish it was it, but just a bit out of reach for us. It was a perfect place on many, many levels -- the most levels yet in our two year search.

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