Land partnership

[Doublewide]

250 yards of a small property separates this potential purchase and my current property. The access to this property is from a road, and to split the parcels would require someone to have an easement through the other's parcel, so pretty unlikely. I wish it were more cut and dry to how to handle a split because that's an option I would prefer.

I would take a land split and an easement over a partnership, I have multiple easements going through my property. I would just have soon not have them but they are easy to control if written properly, any good land attorney can write one up for a minimal cost that could be agreeable to both parties. If two parties couldn't agree on a simple easement and who gets which parcel I wouldn't want to see how a land usage disagreement would end up.

 

[Tree Spud]

A thing to consider that can get ugly is a divorce. No matter how sound your partnerships I think it's prudent to have something in writing just in case an ex decides they want half of everything.

Only half?

Two buddies who got divorced, the wife went after what they cherished the most ... the guns and hunting land. They were amazed that while married the wife never cared about the hunting stuff, but once the divorce started, the wife had a detailed list of every gun, bow, knife, bullet, arrow, etc. They even leveraged the trophy head mounts. They couldn't believe how well prepared their wife was for the divorce. LOL!

 

[omicron1792]

Strongly considering entering into an agreement with a friend on a parcel of land. I can't afford the whole thing and it very nearly borders my best property. I can't stomach the thought of it selling to a group of four or more guys who don't practice some version of QDM, so I've decided to bring on a "partner".

Who has bought land with a group or partner? What were some pros/cons and what type of stuff do we need to get squared away before hand?
My friend has a 20 year old son and my son is 7, so we both will have a +1 in regards to the land. He agreed that we were the only ones (the four of us) that will be hunting. Obviously want to split costs down the middle as much as possible. I already have the tractor and food plot equipment at my place, but my friend has a skid loader, so that agreement may settle itself. What is a good way to write in buy out options in case one party wants out? He mentioned a 5% increase in value every year and I said fair market value at the time of the buy out. We still have to hammer out the details a little, but he's a good friend, and I trust his judgment on deer. I am a little worried if him and his son come out to hunt that I'll feel pressured to hunt my neighboring land to stay out of their way, even if I wanted to hunt the joint property.

Lots to think about. What else am I missing?

How big is the new plot Brian?

 

[omicron1792]

Strongly considering entering into an agreement with a friend on a parcel of land. I can't afford the whole thing and it very nearly borders my best property. I can't stomach the thought of it selling to a group of four or more guys who don't practice some version of QDM, so I've decided to bring on a "partner".

Who has bought land with a group or partner? What were some pros/cons and what type of stuff do we need to get squared away before hand?
My friend has a 20 year old son and my son is 7, so we both will have a +1 in regards to the land. He agreed that we were the only ones (the four of us) that will be hunting. Obviously want to split costs down the middle as much as possible. I already have the tractor and food plot equipment at my place, but my friend has a skid loader, so that agreement may settle itself. What is a good way to write in buy out options in case one party wants out? He mentioned a 5% increase in value every year and I said fair market value at the time of the buy out. We still have to hammer out the details a little, but he's a good friend, and I trust his judgment on deer. I am a little worried if him and his son come out to hunt that I'll feel pressured to hunt my neighboring land to stay out of their way, even if I wanted to hunt the joint property.

Lots to think about. What else am I missing?

I know lots of joint ownerships. Most have More than two, but most people I know are buying equity pieces in property.

Why not set it up as its own entity, then you two own 50% of the stock? A land attorney could draw it up easily. Then you could have covenants and rules that are part of the property and in writing.

 

[Howboutthemdawgs]

I know lots of joint ownerships. Most have More than two, but most people I know are buying equity pieces in property.

Why not set it up as its own entity, then you two own 50% of the stock? A land attorney could draw it up easily. Then you could have covenants and rules that are part of the property and in writing.

Like those equity clubs in Mississippi and Arkansas area? Those seem to work but I wonder if they aren’t relatively successful because they are more “emotionless”. Meaning there is a more than one partner, most don’t always know each other, long running, and you enter in with the understanding that there is a set of rules that are in place and not fluid. 2 buddies with kids getting together has more perceived nuance to how rigid the agreement is.

 

[Turkish]

Like those equity clubs in Mississippi and Arkansas area? Those seem to work but I wonder if they aren’t relatively successful because they are more “emotionless”. Meaning there is a more than one partner, most don’t always know each other, long running, and you enter in with the understanding that there is a set of rules that are in place and not fluid. 2 buddies with kids getting together has more perceived nuance to how rigid the agreement is.

I think your description of the difference between the large shareholder clubs and a small partnership is probably very accurate.

 

[Brian662]

I guess I would just look at any land partnership that you know of or experiences you’ve heard of. I don’t personally know of any that worked. Maybe y’all can buck the trend? Does he need you to do it? Maybe he just buys it and you have a good buddy as a neighbor. Lord knows you don’t need another piece of ground to kill a big deer…you have that covered.

I will be selling one of my properties to get into my portion of this deal. I think my "partner" and I will come to terms with splitting the land either equally or in an agreement percentage and likely go that route.

 

[Brian662]

How big is the new plot Brian?

~100 acres

 

[Ben.MN/WI]

I personally would steer clear with any type of land partnership. Splitting the property up into two 50 acre parcels seems like a better idea to me, but it could get tricky depending on access, location of fields, etc. It would be hard to split up a property and give both parties a parcel of equal quality, but I would still prefer that over joint ownership.

 

[omicron1792]

Like those equity clubs in Mississippi and Arkansas area? Those seem to work but I wonder if they aren’t relatively successful because they are more “emotionless”. Meaning there is a more than one partner, most don’t always know each other, long running, and you enter in with the understanding that there is a set of rules that are in place and not fluid. 2 buddies with kids getting together has more perceived nuance to how rigid the agreement is.

All good points. I guess I’m an optimist. I think this could be done, and with him having financial ability worst case you just sell your half to him.

 

[bwoods11]

I’m in 2 partnerships, and yes they can be a challenge. If you can split the land I’d recommend that . It’s worked for me, but might not for others.

However, it can be done. I own 2 farms that I’d never own if it were not for this scenario. We have a buyout clause and an agreement on deer. One buck per partner rule, seems to work? Family only, with late season does being the exception. We sometimes split the gun season, changing weeks based on the year .

 

[bwoods11]

Let me also add (land partnerships) might work better if you have other farms under ownership….Example .. both owners have a really nice parcel or 2-3 ? The partnership would be secondary parcel that is not “as” important.

Maybe more of an investment, or a secondary hunting spot?

 

[cbw]

I am in two partnerships for property and so far, both are working out well this far.

One is with my son… a rental home. I own 49%, he owns 51%. We split all expenses and profits at this percentage.

Buy out clause is based on fair market value, but if the buyer turns around and sells within a specific period of time (I think 1 year), additional profits would be shared. That said, I also really like SDs reco for the Mexican standoff.

Happy to share any agreements that we have.

Be cautious. Get everything in writing. Clarity is kindness.


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[Ben.MN/WI]

Let me also add (land partnerships) might work better if you have other farms under ownership….Example .. both owners have a really nice parcel or 2-3 ? The partnership would be secondary parcel that is not “as” important.

Maybe more of an investment, or a secondary hunting spot?

I think that's a good point. It might be a little tricky if one of the partners used it as their main hunting spot while the other had another property and wanted to save this place for the perfect conditions. It could get complicated if both partners aren't on the same page or if life circumstances change and one guy suddenly has to use this place as their main hunting location while the other tried to save it to hunt later.

 

[RGrizzzz]

Establish a fixed number of ownership shares. Two seems like the right number. If you don't, imagine the divorce scenario, where you own 50%, he owns 25% and his ex owns 25%. This helps with inheritance as well. We just thought this through for a family property purchase.

 

[Brian662]

Let me also add (land partnerships) might work better if you have other farms under ownership….Example .. both owners have a really nice parcel or 2-3 ? The partnership would be secondary parcel that is not “as” important.

Maybe more of an investment, or a secondary hunting spot?

This is kind of the scenario in play here. I have two hunting parcels close to home in MN as well as my parcel next door and he has a 40 as well as permission spots close to his home in WI. We both would drive 2.5 to 3.5 hours to hunt this location and he will likely stay at my house next door.

I like the idea of buck harvest limits per party, but it's likely that we split the parcel somehow and he hunts his ~50 how he wants and I hunt my ~50 how I want. I'd like to come to an agreement with him to keep the pressure low (kids and us only) and optimal doe harvest numbers based on survey.

 

[bwoods11]

This is kind of the scenario in play here. I have two hunting parcels close to home in MN as well as my parcel next door and he has a 40 as well as permission spots close to his home in WI. We both would drive 2.5 to 3.5 hours to hunt this location and he will likely stay at my house next door.

I like the idea of buck harvest limits per party, but it's likely that we split the parcel somehow and he hunts his ~50 how he wants and I hunt my ~50 how I want. I'd like to come to an agreement with him to keep the pressure low (kids and us only) and optimal doe harvest numbers based on

For me, I’d put up with some headaches if it meant getting the farm. Of course it all depends on if it’s a good buy, location etc..

I had a chance to buy 900 acres on South Dakota for around $1000/acre… almost 800 crop land! Could not swing the whole thing, so I was considering taking on a partner, a guy that owns a habitat business! Then I kind of talked myself out of it .

Dumb mistake, that farm would be full of deer and pheasants right now with habitat improvements, and worth about 3 million.

 

[letemgrow]

Only half?

Two buddies who got divorced, the wife went after what they cherished the most ... the guns and hunting land. They were amazed that while married the wife never cared about the hunting stuff, but once the divorce started, the wife had a detailed list of every gun, bow, knife, bullet, arrow, etc. They even leveraged the trophy head mounts. They couldn't believe how well prepared their wife was for the divorce. LOL!

Makes sense given that women tend to be geared towards resource use and not production.

It stands to reason that is a HUGE issue going in partnerships, especially in today's world with so many divorces.

 

[buckdeer1]

Don't forget about a clause in case something happens to one of you.Usually each person carries a life insurance policy on the other and the cash from this buys out the deceased members estate.Just make sure that it specifies what it is to pay for as I have seen the agent not specify this and the other just got a fat check and still kept the property.

 

[Brian662]

Signed the purchase agreement today and put the earnest money down.
I'm buying 66 acres because of my 1031 exchange and my buddy is buying 40.

Hunting rights and Hunting expenses split down the middle. I'll pay my higher share of taxes but get the higher share of logging revenue that is left after we doze trails, install blinds, clear plots, etc. Plan is for me to buy him out when he's 60, he's 52 now.

Got a first right of refusal on the remaining portion of the land (~100 acres) we didn't buy, most of which is ag land. We also got it written into the purchase agreement we can get top access through the remaining land for equipment or Hunting access as long as they own the land.

Pretty sweet deal, I'm pumped. Just a few small hoops to jump through and we close May 17.