Ever think of selling out?

[pumpkinlady]

I feel like I have come to a major stepping stone in my life. My husband was raised on a farm and has always farmed since a young boy. We own a 90 acre farm that he has mostly tended to own his own. He also has farmed his father's 80 acres. We have had very successful side businesses selling summer and fall produce that have enabled us to put his daughter through college, buy a nice boat and a summer place at the lake. Our savings have been growing and life is getting sweeter...but...we seem to have become burnt out with working off the farm (DH works 6-7 days week in a mill and I work 5 days) and all the farm work is just getting to be to much. We didn't plant anything to sell this year and sold off almost all the cows. We now only have 3 horses and 9 cows. We figured maybe a couple of years off just might be the break we need. We feel like we have all this wonderful land but just don't get to enjoy it.
So...a couple of months ago the local stripmine approached us to sell out to them. Hmmmm....they are still in the process in offering and it is getting so tempting to accept. If we do we will be able to retire within the next 10 years and won't have to worry in our old age and they are also offering to let us live in our house for the next 10 years rent free. Sounds good. My husband is ready to let go of the land but I am nervous for some reason. I just keep stalling. I know we can go and buy a nice place with a few acres and we have the acreage at the lake to live on to. I just am not good at change anymore. I love sitting on the back porch at night and watch the deer come out and the fireflies are so beautiful, but that won't pay the bills when we are old and maybe in need of care. Are we ready to trade in a farming life and learn how to play and take it easy? I just don't know and it is scary to think about. Have any of you ever pondered anything similar?

[fordy]

...................A person can only follow a Mundane rountine for so many years before they come to the realization that it's time to change , both in lifestyle and in geography . I've arrived at that point in my life and will be effecting those needed changes as job and time permit . I'm tired of being roasted in texas for 5 months out of 12. And , I'm going to relocate to a location where the Temp's drop down to 40 after the sun goes down , EVEN if it got up to 100 during the day . My goal is to build a very rustic cabin\home over a couple of years whilst living in a travel trailer and just enjoying a much simpler existence . I can live on a day to day basis on very little actually as long as I have adequate food and water . My only bad habit is daydreaming alot and and not making much headway but I'm getting closer everyday . fordy..

[Cosmic]

Probably all depends on what you really want?????

If the coal company is making nice, best to play along. See where their bottom line really is. In the end they probably always get what they want in some manner. Or you get some fully unexpected consequences.

Beware of promises of the check is coming in the future. Make them put it all in writing and have a good lawyer look it over good. Fully understand the deal yourself.

All depends on the details. Is the price well above what you could get selling as farmland? Is it a cash in the bank deal?? Who would still own the land after the coal company is done? Would you still own the house?

Devil is always in the details, could work well for you if you know what you actually want and insist on it. Getting a good lump sum is only part of the battle, you must then know something about management of money for income. Surprising how many working folks think it only about getting a nice check. You must understand investments to keep and profit from the nice check.

Never, never trust investment gurus. You must be well grounded yourself, can win in one game and lose so very, very easy in the other. You understand farming but do you understand a lifestyle based on incomes from a cash flow from investments? Especially if it is geared around longer timeframes.

Can still work, might be a bit of spade work and thinking through to be done.

[TimandPatti]

We moved to a smaller place this past Feb. Basically we just wanted something smaller and easier to take care of as we get older. Even if you just have a few acres you can have quite a few things. We have room for a big garden and a pasture for critters.
We couldn't have moved into a neighborhood in town.
It's peaceful out here and like you, we love sitting on the back porch at night.

[dlangland]

I did sell out not even 4 yrs. ago. I had 17 acres. I loved every minute of it although the farmhouse was one of those never get done projects. I never ran out of htings to do, and rarely came in the house, so what would I care what my house was like. I couldn't have cared less, although it did eventually come around, mainly due to rain and blizzard days when it was even too cold to work on my barn. When my oldest daughter left for college, I fought with my youngest daughter who justgraduated. She w a city kid...and all those school activities...band/orchestra/debate/symphony,,,I felt like truck driver until she was old enough to drive, then I sat by the phone, same as with my oldest...ditches, night driving after practixes, and ice don't mix, so I agreed to move back to town until she graduated. Within 2 weeks I was on the verge of a breakdown. The claustrophobia of city life...not me. I spent yrs. plotting my escape back to the country. I realize life in town is more convenient. I had a fancy house..but it is about 10 paces either direction to either neighbor. Not for me. The sad thing was I already knew that about myself, and I actually would have been a better mom is I had stayed put instead of being so pent up. 12 days counting moving day before I officially live in the country again. for over 3 months I have been doing 3 day work weekends there. I will be such a better person.

[mulliganbush]

Pumpkinlady, It's your life. It's up to you. There are too many factors--how secure is your retirement, for instance--for any of us to even hazard a guess as what we would do in your place.

Your husband might want to view some of the previously strip-mined land to see how his family farm will look after they've finished.

Ray

[dlangland]

I think people should specifically direct who it is they are typing to. I know it is not me because I have done my thing without a man for almost 18 yrs. and never lived in a mining area. but perhaps someone doen't necessarily have time to read bak through the thread, when someone types somehting like that right after I have typed, I could accidentally think it pertained to me. Yes, I did figure it out. Just a thought.

[crashy]

I would just go live at the lake....sounds nice!!! It does not take much land to have a garden, a few birds maybe even a cow or two. We live on 1.25 acres we think we need more (LOL) but you can really do a lot here. I just wish the #^%^$#% town was not building all around us

[agmantoo]

I have sold out several times and then did 1031 exchanges. These transactions permitted me to increase my acreage. Prior to selling ask yourself a few questions.

Is the property I now own going to increase as fast or faster than where I can park the money? If so why sell now?

Is the payment for the property going to be made immediately? Money received in the future has less value than that received now. I discourage taking payments!

What are going to be the tax consequences from the sale?

Can I locate a new homestead in the area I want to live? If so, do a 1031 for the new property to avoid taxes. Remember with a 1031 you can not personally take possession of the payment.

Do not give a "free look" to the buyer. Get some nonrefundable money up front and also ask that if the purchase does not go through that you get a copy of all the engineering work.

Once you decide what you are going to do, particularly if you sell do not "look back" just accept your decision and go forward with a positive attitude.

[uncle Will in In.]

If you can't cash rent your farm for a reasonable amount, I would explore the possibilty of not selling the house and a few surounding acres at all. Seeing them tear up your farm would be very depressing however. What ever you decide, talk it over with a good tax person. The IRS can get greedy beyond belief with the capital gain that you would surely have on property owned several years.

[Michael W. Smith]

Hello fellow Pennsylvanian!! I'm not sure I'm understanding the coal company "buying you out".

Around my area, coal companies stripmine the land. You get paid for each ton of coal taken off of your property. Once they are done, they back fill and make the terrain the same as it was, and plant a covercrop. They are only buying the coal - not the whole land.

It seems suspicious to me that the coal company wants to buy the whole property. Seems to me that they know something that you don't. Perhaps they know they can buy the farm from you, strip mine it to get the coal, and then sell the property once it has been stripped netting them even more money.

If you don't know about strip mining, find a place that has been stripped. All trees are bulldozed, the topsoil is put into a big pile, and then dirt, rocks, etc, are dug out to get to the coal. From start to finish could take as long as 4 years. Are you going to want to live in a "free" house for 10 years with huge piles of dirt and rock around you? Wildlife will move to other places. Once they are done, and the piles are leveled out and the topsoil is put back, they will plant a cover crop. But it will be years before the land has recovered.

This is a decision that both of you must make. Some people get "attached" to the land and won't "sell out" regardless of the money being dangled in front. Some people could care less about their land and if a profit can be made, they will sell. If you are attached to your land, seeing it "raped" could be heartbreaking. If you aren't attached, you probably won't mind what happens to it.

I would be very cautious of this "deal". Why does the coal company want to BUY the property rather than just strip it for you? It sounds like there is a pile of coal on your property, and the coal company thinks they can buy it for a pittance of what they can get out of it. Do you have an option to let the coal company strip it? You would then get paid for the coal, and while they are stripping it if you don't like the noise or the looks, go to your lake property to live. Once they are done, you can come back to live on the farm. And if you don't want the farm after that, you can sell it yourself and get the money from it as well.

[foxtrapper]

Sure I think of selling out. And eventually, I/we will.

But make sure you know where you're going as you make that decision. Otherwise, you are flying blind and can really hurt yourself.

Using my place as an example, it's doubled in value recently, and will probably continue to climb. Developments are steadily pushing in, and one of the county plans is to convert my road to a major local highway. All good reasons to sell and get something else.

But the prices around here have climbed even faster, so the best I could do is to buy less house and less land. That's not an improvement in my opinion. So I don't sell, and probably won't until I retire and run far away to where I can get a lot more, or at least something better suited to retirement and that age.

[Cosmic]

You basically didn't tell us a critical fact.

Who owns the rights to the coal on the land as it stands??? If the coal company already owns the mineral rights (Coal) they probably don't need your permission for squat.

A good guess is they don't own the rights and you do. Or they would not even be talking to you.

Maybe the coal is worth far more than you realize. You need to basically have a foggy idea of the amount of coal that may be there if you own it and what its total worth is. What type coal is it, what is the present market value per ton for such coals??

Then you have some idea to ballpark any offer as to its fair value. Provided you really want to have your property mined. As mentioned, typically mining companies do not buy property outright, unless for a reason.

Might be saying go slow and get all the facts. What is the engineering study or nearby land yielding in terms of coal values. Has the land ever been cored for a study and assessment of what is under it. Is your land in the direct path of a good well known vein of coal????

[pumpkinlady]

I tried to respond a few times but I have been unable to post until this morning. Thank you for some good advice, thoughts and concerns. That is the good thing about this forum; it is a great sounding board. Makes me feel better that others have dealt with similar things.

To clarify on some of the responses and questions: We are already financial secure in our retirement investments; this would be an added bonus that would permit us to be freer spending in our retirement.

We had our property appraised in just the past 3 months and can realized a pretty good guesstimate on what it would be worth in 10 years. Yes, we have the mineral rights. If we sell out we would not want payments or at least get more than 50% down because of loss of profit earnings on the sale. Taxes are an issue also. We would continue to work and live the same life style as we do now. No fancy trips or new vehicles. The money we would normally spend on mortgage payments and taxes would be invested and after 10 years this also will add up to a nice little sum.

When the time comes to move we would find 5 or 10 acres somewhere that we could still a couple of feeders and maybe a few other animals. By then we will be ready to downsize.

They are stripping for limestone in our area but do remove the coal if it is a foot or more (due to laws). I am familiar with how they operate and have been neighborly with them for the past 14 years. They have signed most landowners on with leases but we are the ones insisting on a buyout. Since I am the township secretary I have access to what they have paid others in the area for their farms. It is easy to find a fair starting point on the value of the land when you know how deep they are mining across the road at your neighbors, how many feet of ground cover that would be removed, an estimate of stone tonnage in ground along with some coal, where the land is situated in how they need to cross over several roads for future stripping.

I am in no hurry in accepting any offers and have an attorney and financial advisor to work with also. Just gathering info and input from others. Thanks again…~Laurie~