🚀 go-pugleaf

Lawrence F. London, Jr. <lflondon@worldnet.att.net> wrote in message
news:37dbe3e9.84889631@netnews.worldnet.att.net...
> On Sun, 12 Sep 1999 09:51:12 -0400, "Tom Gauldin"
> <scoundrl@mindspring.com> wrote:
>
>
> >Nope- I never did a farm deal in my life.  Back in the 1970's there
> >was a big fad among lenders to do farm loans.  I ran a few
> >spreadsheets on my own and told our producers to avoid farm lending
> >like the plague.  The loans didn't make any sense- and neither did
the
> >appraisals based upon the income approach to value.
> >I concluded that farming was merely a very expensive hobby.
>
> What size were the farms seeking loans?
> What were the loans for, equipment, repairs,
> land, getting crops in and arvested? All of the above?
>
The farm loans were to purchase farms.  The typical scenario would be
a person farming 200-300 acres wanting to buy an adjoining farm to
double his land.  His rationale would be that a similar farm had just
sold for $3000 and acre, and at $3200 an acre (example only) he just
couldn't pass up the bargain.  He would say he had equipment that
could farm the additional land, or that he only needed a new combine.
When you then began to pin him down about tillable acreage, crop yield
and price, it would become apparent that he would barely be able to
pay his interest in the best of years.  If there was any amortization
of equipment,  financing or labor factored in, he would be buying into
a loss.

This is exactly what happened during those days, and many would be
entrepreneurial farmers took the gas pipe.

Tom Gauldin   Raleigh NC     (919) 870-0958
scoundrl@mindspring.com
ftp://ftp.mindspring.com/pub/users/scoundrl/home.htm