World of Money


The owning couple’s age is the main issue

Published / by momadmin

He’s 90, she’s in her mid-70’s. He’s the one who keeps farming; she enjoys being on the farm but doesn’t farm per se. But at 90 years old, he can’t keep farming for too many more years. They have four kids and multiple grandkids, none of whom want to farm but all of them love having the farm in their family. I don’t know what the inheritance setup is, but I’m pretty sure that if the senior couple both passed away the family would sell.

We’ve talked to them in the past about what happens when they reach a point where they can’t or don’t want to farm anymore, and have told them of our interest in eventually buying. The most recent of those conversations was earlier this year. Let’s just say they haven’t done much constructive planning along those lines, at least not that they’ve disclosed to us. They have told us none of the family members want to continue farming if/when they retire. Because of the floodplain issues with that property (only the house/barn is above the NEW floodplain), it’s not a good candidate for development.

We’re one of three parties currently renting from them. Knowing a certain amount about the other two parties, neither of them are in a position to buy even if they wanted to. I think we have the best relationship with the family and we definitely have the longest-running relationship. But none of that matters much if we can’t get a loan at some point. I know that they’d be willing to work out a payment plan with us, but I would hardly expect their kids/grandkids to go into an arrangement like that if the older couple passed away before we had something already in writing. So yea, I feel a certain amount of pressure to “get ready” for being able to buy this property if/when it comes up. And I don’t think we have a lot of time to get our ducks in a row. Every new year, everyone in the family mutters about “this might be the last year” that they continue farming.

Now that I’m in a better mood, and thinking more constructively (as opposed to OMG)

Published / by momadmin

I wanted to go back and say thanks Sharon for your post about being in business with a falling credit score. It really made a huge difference that day in terms of me getting a grip on the idea that my credit rating is falling like a rock.

Now I’ve got some followup questions:

First, I suspect my particular instance is due not only to closing several past debt accounts, but also that my current accounts are NOT listed. My tax payments aren’t listed, my accountant’s bill isn’t listed, and my feed bill (which had a high point of $6K and was paid off last year) is not listed. All of those, which were/are current and/or paid in full, would possibly make a nice difference. But how much of a difference? Should I petition those creditors to put that information on my credit report?

Secondly, I am most concerned about our tentative plans to buy that larger farm I mentioned earlier. The plan until Monday was to continue renting there for at least a few more years, as we pay off other bills and as we pay off this place. Say, in 2016, we’d offer to buy the larger farm. By then, we’d have zero consumer debt, we’d have our home paid off, and we’d be able to show a solid 10 year history of renting from them, on good terms and always paid on time and in full. If I used current numbers, here’s how it would add up:

Target Farm current appraised value: $1,000,000
Our farm, current appraised value: $350,000

Approximate Loan terms if we were going to finance conventionally:
25% down payment = $250,000 (funded by the sale of our current home/farm)
Monthly payments of roughly $10,000 (funded primarily by farm sales but it would also be our home payment, so some personal income in there too).
If we went Contract for Deed, here’s the approximate loan terms we’d want to propose:
35% down payment of $350,000 (funded by the sale of our current home/farm)
Monthly payments to the family of roughly $5000 for 3-5 years, funded by combo of farm sales + personal income)
Balloon payment to the family after that 3-5 year period, with the balance going onto a commercial property mortgage
Now, if my credit history is already on the way down the drain, and it’s not ever going to recover, then the above plan is NOT going to work. We can definitely start snowballing for the farm purchase after we pay off our current bills. But frankly, I don’t know of any family on the planet who would willingly go into a large real estate deal someone with a zero credit rating. Is there a DR-friendly way to keep my credit rating high enough, for the next 10 years or so, so that we can complete this long-term transaction? If not, are there other funding alternatives that folks can see which would make this transaction possible?
If push came to shove, I suppose we could give up our ideas on that particular property, and go buy something with the cash we’d have if we simply sold our place. But that would be starting over, at an age (mid-50’s by then) when we really need to be socking away income on an established property. I’m really rather nervous now about how best to proceed, given all the above. I know this is looking WAY down the road, but I’d love any insights or suggestions folks might have. Particularly those who are applying DR rules to their business lives, and have had to make large-scale purchases like this as part of their business. Thanks all.

I struggled with this years ago

Published / by momadmin

I saw my score decline, and as you, I have a business to run which in some ways depends upon my business associates preconceived “credit worthiness” using the FICO score. I fought with my mortgage company to keep reporting a zero balance for instance, same thing for the last car I purchased on credit, but finally the fight to keep reporting zero balances just wasn’t worth it any more and I watched the score decline. I had some casket companies who all of the sudden started requiring a deposit, which they were going to keep for me and pay interest on the deposit at the end of 36 months – when I (the business) had been working with them for 40 years. I dropped them and went with different vendors. The same thing happened when it came time to renew a vehicle insurance policy which had been in force for 16 years at the time and at times during that tenure, had over 20 cars on it. At first I appealed their decision to, in my estimation, arbitrarily raise rates not on our policy history, but on a score which might suggest that we were a risk. I won the appeal, then decided that it would probably be something which would occur again so I dropped them and moved my business to another carrier. Lot of work, but it was the principle which wouldn’t allow me to stay.

I said all of that to say that I pay more for car insurance than I probably need to but I like the idea of a company which looks at the business/person regardless of a three digit score.

Here’s a couple of things to try

Published / by momadmin

First if you are otherwise happy with your price and service, try talking to the head manager at your service branch. You were likely talking to office staff which usually has little flexibility to make changes. If you get no where with it, as your these new policies in writing. Often there is nothing in writing and that will give you more negotiating power. You can call the company directly (the head office not your branch) and try to work something out. If you still get no where, let them know you plan to shop around. Just because you lease their tank doesn’t mean you can’t leave the company. A new company can set a tank and Amerigas can pick up their tank. As a new customer, you will likely get a good set price and fill. Of course after that initail fill the price will increase so MAKE SURE you ask what the price will be going forward.

I know that buying your own tank may not be in the cards right now, but I would make it a priority to save up to do so. Dh says you will always have more power as a customer if you own your own tank. Companies know that it’s easier for you to shop somewhere else if you own your own tank. You will almost always get a better price too.

He also suggests getting on a refil program that is like once every three months. Even if you only do a 1/2 fill each time. The more you pop up into their computer systems the more they see you as a loyal customer….again they will want to work with you more if they see that.

That is all I can think of right now, I will email you again if I think of more.