Buying a Farm with No Money Down

Updated: Oct 19, 2021

Let’s be clear: a no down purchase of a farm is a possibility and depends on various factors that I cover with you in this blog.


Agricultural Real Estate Funding


First of all agricultural real estate funding is a world of its own and the less you know about real estate funding the better off you are. I base this not only on my own experience as a broker for 26 years but also as the author of the white Paper on Energy Efficient Mortgages – which is based on reducing operating expenses via conservation which increased the price per sq foot while reducing the nnn expenses paid by tenants. As it applies to residential it extended the back end ratio (how much debt to income) as a result of lowering utility bills. Now that’s established here is how the formula that could lead to a zero down purchase is based per the USDA loan programs for Rural Development.


Formula for Zero Down Purchase


The loans go up to $32 million with a 70% LTV(loan to value). Which means you put down 30%. 70% of the value of the real estate 60% of the value of the crops 50% of the value of equipment. If you have a $1m property that $700k if the crop is worth $400k 60%=$240k and $150k in equipment at 50%=$75k= total $1,015k or more than the total cost of the farm. MORE will always be looking for the best property with the best actual values and this is a complicated and technical process and well worth the effort. As a matter of fact this maybe the most attractive investment you still would have to possess the $300k earnest money down payment and it may not be the best overall investment criteria. As I previously stated forget everything you know about funding in real estate as the next element is going to expand your horizon it is that unlike a conventional loan process which is confined to one mortgage broker and one direct lender when applying for USDA backed loans and grants you may apply for all of them concurrently. Recognizing the numerous combinations, a possibility with 150 loans and 250 grants. The key to have your research and plans as well as all forms prepared in advance of application. It’s a simple action of drawing inside the lines historically the farmers have not been able to take advantage of all of these products for that one simple

reason the inability to prepare a business plan and forms. The USDA 2021 Budget is $32 billion in loans and more in grants this is allocated by Congress and the money is to be used or lost. It’s an a-political arm of the government although ever administration makes a point of some legislation.




The US needs food security: we are not a country that does well with rationing even if its toilet paper. The intention of the US is to insure that farmers and farmland be maintained at such a level to satisfy domestic and foreign demand. Which brings us to the issue at hand which is that 40% of the farmland lacks the proper level of nutrients to be planted and an additional 20% due to drought conditions the solutions already exist on a global level and a being applied domestically that’s where MORE and you come in and the how to increase the value of the farm by improving the yield we will discuss this in alter blog covering the 1890 Grant Title Act. Lets say an existing farm worth $1m based on its yield were to increase the yield by 10 times the value of the farm would increase as a multiplier of that change or 10 times its original value. Translating this into basic real estate if an apartment building value is based on its actual rent than if its actual rent increased 10 times so would the property value. This is where we begin the adventure in Smart Farming


AI & Robotics

AI/Robotics/Hydroponics/Geothermal/Vertical Farming have been applied to agriculture with these results and MORE. The Smart Farmer yield will not only but the quality and nutritional value will improve using 80% less water. Why has this taken so long? The current farmer is based on a business model developed in 1980 or there abouts and is to say the least obsolete. After 2 years of research in this field I concluded it was going to take an entirely new generation of smart farmers that embrace and understand the technology and in many instances as live work environments its appealing as a society. We began a great migration when the pandemic began and now that the future is coming into focus this new society of Smart Farming has come. Be on the lookout for MORE. Reach out with your questions and reserve a consultation.


Expect MORE. Enjoy MORE. Love MORE. Give MORE.