Okay, so now it's down to getting the legal paperwork on the farm buy-in done. We need to have a sales agreement for our purchase of the shares of the LLC drawn up, and have the LLC charter altered to reflect our ownership shares. We've been asking the lawyer to get this done since August 20, 2009.
The urgency now, besides all our asses and the future of the farm hanging in the wind, is that bank needs these documents in order to back the mortgage, allowing us to move forward with the site preparation, ordering and delivery of the house, and the whole rest of our bloody lives.
I began calling the lawyer daily last week. Pleasant, courteous reminder voice mails that we're waiting and we have a deadline. He called Monday this week.
And he's buggering things up...
In all fairness, he's protecting Pat's interest, which he absolutely should do-- that's his job; he's been her lookout for a long time now, and he has every authority to watch her back. We'd insist on it if we weren't the ones he was trying to protect her from. It's quite a conundrum.
The details aren't all that important, but what it's coming down to is that because his job entails daily encounters with divorces gone ugly and property deals gone wrong and all the legal wrangling it takes to undo those things, he's very skeptical of the arrangement we've worked out, which is much more like a succession plan for a family farm than a corporation buyout. He is looking at all the potential nightmares of a deal that is not neat, pretty, mutually ramparted against disaster, and tied up with a bow, and he's not liking what he's seeing.
Well, this deal isn't clean and pretty, but it's the best we three can do. And we all know that, and we all accept the risks, and for godsakes, Marty and I are civilized people who pay our bills on time, treat others with courtesy and respect in all things, particularly matters legal, financial, or otherwise formal, and we are not getting divorced. We have never entered any arrangement lightly, not least of which our marriage, so for godsake, stop looking at the national averages and the NY Post and look at us. We're the real deal and can be trusted.
But isn't that what every swindler says?
It's a very challenging thing to have your integrity, your honesty, your respectability questioned. Particularly by someone who rarely has the opportunity to deal with people as forthright and decent as we are...
So while I don't know that I'd ever say it out loud, I feel compelled to document exactly what we're giving up, what we're sacrificing, what we're getting ourselves into as we enter this arrangement. Yes, we have a once-in-a-lifetime opportunity to enter a life with horses, but it's not that simple.
1. Financial Security-- we are buying a 200 year old farm, with 200 year old barns. At the very least, roofs will need replacing in the next five years. At their size and height, I'm estimating $30,000. We also need to replace a truck ($17,000 minimum) and trailer ($10,000). We'd like to put in electricity in two of the barns so we can actually work after dark-- total bill maybe $5,000 to do it right, safely, and so no one gets electrocuted and no fires erupt. Oh, and plumbing to the far barns would be nice-- let's say $4,500 for that job. And don't forget that we're dealing with horses-- factor in $3,000-$10,000 annually in unexpected repairs, vet bills, and ridiculous miscellany that no one had budgeted for.
Add to that the regular expenses of running this farm-- taxes, insurance, hay, feed, vet bills, farrier bills, routine operational overhead. The reality is that the farm, as running now, isn't paying for these things. It's going to take a good five years of pouring money into operations just to get it back on its feet and breaking even. And that money is going to be ours...
For all this potential and certain expense, we are giving up our current debt-free, paid-for, 30 year old house with all major systems (heat, appliances, etc.) less than 5 years old, and two payment-free vehicles that could keep us going for another five years or so before we have to make the investment in a new one. Yay!
2. Free Time-- we aren't buying a hobby farm. This is a working farm, with 11 horses owned by the farm, our two horses and 3 boarders. These animals require 24 hour supervision 365 days of the year. It's too many animals, requiring too much specialized care, and too dangerous a proposition, to leave it in the hands of a pet-sitter (if you can even find one you trust who is willing to do it for a fee you could afford) for more than half a day. So that means that for the next 25 years, while the horses are all still living, we do not go away for the weekend, go away for a week at the beach, go away to my parents' house overnight. We are responsible for being there, at the farm, every 8 hours. We can go to work, but right back home (to do more work) after that.
And that doesn't even begin to address the hours of work that we'll be doing while we're there. Farms require constant, vigilant maintenance. All the things we know need repairing are enough to fill evenings and weekends for the next three years, and in just that time, half again as many things in good repair now will have fallen into disrepair and need addressing. The work of daily care (turnout, mucking, bedding, watering, haying, feeding, turnin, etc.) and facility maintenance alone is never ending; add to that 5 young horses that need training in order to make them decent sales prospects or lesson horse candidates. There will be no free time for at least the next five years. And don't get me started on haying and what that job takes-- completely on its own agricultural schedule, regardless of our needs...
3. Privacy-- again, this isn't a private residence. This is a boarding and training stable, which means that the place is always at the mercy of the arrival of the public-- boarders and prospective clients arrive any old time they please. Lesson students and people with horses in training tend to schedule in advance, but even some of those folks just pop in, hoping we can drop everything because they have a free hour this afternoon. Photographers, nature buffs, and horse lovers drop in whenever they please, wander the property, and require hauling oneself up from the dinner table to go outside and see what the person leaning over the stallion pasture gate is up to... We give up any chance of calling our home our own private castle; we enter the realm of running a public zoo.
4. Freedom from responsibility-- with this venture, we take on responsibility for the lives and health of 16 horses, three (and periodically more) boarding families, more than a dozen client families, and one 72 year old partner. We buy this farm and we have to make daily care decisions for the horses, and react to every new incident they put in our way-- injuries, illnesses, damage to facilities, oddities of behavior or health, etc., etc. And we have to care for the needs of our boarding clients-- enough space and privacy and entitlement for each, not too much for any one, barn drama potentialities. Plus the same for our lesson and training clients, each of whom has his or her own particular quirks and oddities.
Plus we enter this partnership with a woman as old as our own aging parents. We deal every day with the question of how much she can do, how much longer she can do it all, when she's going to need a break, when and how her body is going to insist on a break. And we take on all her end of life responsibilities... she has no family to come in and care for her in her old age, we become her family responsible for caring for her if she becomes ill, injured, or otherwise incapacitated. We will be the people making decisions about how much extraordinary life-extending care she receives. If we are lucky enough to live out our natural lives, the reality is that we will be the people witnessing her death and making her funeral arrangements.
And beyond that, we are responsible, liable, every minute of every day for the safety of anyone who enters our property. Trespasser, boarder, lesson student, meter-reader-- anyone gets hurt out there and files a lawsuit, and we likely lose the whole thing. "Attractive nuisance" is, I believe, the legal definition of a horse farm-- people who have no idea how to be safe there are drawn to it, and if they get hurt, it's our fault.
We could very easily, for half the monthly payment and none of the responsibility, board our two horses at a local boarding stable and go on about our lives. Then we'd be free to vacation, relax, go to the barn if we want or not, and basically live the lives of two people who make a decent living and have no responsibilities other than themselves, their dogs, and their aging parents.
---
This is not a care-free, easy, just go play at the farm arrangement we're getting into. We know that. We understand that. We've thought about it long and hard and come to the decision that we're up to the challenges and we're about to make a bed that it will be very hard to lie in for a while. We enter this arrangement knowing full well what we're taking on, and that we're doing it voluntarily. And truth be told, we've been doing it for well over two years already, without the security that our efforts, money, and time is going to any cause other than keeping things barely afloat for the time being-- doing it with absolutely no safety net at all.
It just pisses me off that, after all this, the integrity of our marriage, our ability to pay the bills, and our business relationship to Pat is being questioned by a guy who never has dirt under his fingernails and has absolutely no idea the work it takes to do what we're doing.
I'm glad he's looking out for her, but I'm feeling pretty squeezed here...
Wednesday, February 3, 2010
Friday, January 8, 2010
The Bank
It's January, and my goal for January was to get moving on the financing of the farm/house purchase. It was a mixed week, but it ended well today!
On Tuesday, I phoned our credit union, which has held three car loans, a home-improvement loan, a home-equity loan, and all our paychecks for the nearly 18 years we've been married. We're at the point with this credit union that, when it's time to buy a car, we call and say, "we're going car shopping," and they say, "okay, you can spend up to XXX. Call us when you need the check." And their XXX figure is always outrageously more than we'd ever spend on a car. (It's just a car, for chrissakes!)
So we have a history, a good credit rating, and a familiar relationship.
So I called on Tuesday to ask for a sit-down to talk out the eccentricities of buying this farm thing. It's an odd deal, since we're buying into partnership on the LLC that owns the land of the farm, and then asking to borrow more money to put up our housing...on the land that is owned by the Farm LLC, into which we've just bought... so, it's a little more complicated than just a regular mortgage, particularly since we've decided on the double-wide...those are a whole other kettle of fish. So we need a sit down.
So I call up and introduce myself and say I'd like to schedule a time to discuss financing around our purchase of a farm. The girl says, "Is it a working farm?" And I, all proud as can be not to be one of those poseur hobby-farmers say, "Oh, yes!" and the girl says, "We don't loan to working farms."
"Huh?"
So I say, "well, really we're just looking for financing of a residence at the farm, not financing for the farm itself." And the girl asks, "Is the residence going to be on a working farm?" "Uh, yes." "We don't deal with working farms."
So I said, "Seriously? Not at all? Not even a home equity loan against our current, non-farm house?" and she says, "Hold on, let me ask," and puts me on hold. Pause. Pause. "Um, ma'am, we can't do any lending with working farms."
Wow. I am thunderstruck. No idea this would be the response. And after being thunderstruck, I start to get anxious. Shit...our primary lending agency won't have anything to do with us... WTF do we do now? Holy crap, is the mortgage crisis in America so screwed up that we're dead in the water before we get started?
So...I send an email to the Bank, yes, Bank, not Credit Union, different entity entirely, that holds the Farm's business banking accounts and detail the entire plan-- that we're buying into the LLC, that we want to put up a double wide, what our estimates are, what our credit rating and current debt load are, what our city house is valued at, and the fact that we intend to sell the city house AFTER moving into the doublewide that we're asking to finance. I figure, shit, get it all out there in the email and see what happens before even getting terribly involved.
So in about an hour, I get a really friendly email back from the branch manager, who is also a loan officer, that he's pretty certain they can help us out, and he'd love to sit down and talk with us-- when would we like to come in?
Well, that's a friendlier reception, so I'm at least optimistic about that. I set up an appointment for Friday morning before work.
And then I fret for the rest of the week... running scenarios, agonizing about the weirdness of the transaction, worried that our credit, while rated really well, is just a sham and that we have no money and no one will think us a good risk.
And then my car craps out on me. Current estimate-- $400, but we won't know until that work is done whether more work needs doing, and the parts for the $400 job have to be ordered, so I'm out a car and looking at putting the next paycheck, which was supposed to go to paying the school taxes at the city house, into the damn car.
Fret, freak, stew, worry.
Finally Friday comes this morning, and it's snowing a bastard out. The usual 30-minute drive to the farm takes 50-minutes, so I stop in, grab some financing paperwork, throw some carrots at the kids, and hope to be able to get the loaner car back up out of the farm driveway, over the plowed-to-the-side hump of snow, and get to the bank in time. Or at all.
Get to the bank, ask to meet with Mr. XXX, and the teller goes, Mr. XXY? Yes, that's it; I suck at names, particularly when I'm nervous. Mr. XXY comes out, has me into his office and we begin.
And it all gets better from there. He's got a full rundown of what I sent him in the email--- he paid attention, knows who I am and what I want. That doing of homework is so often NOT done these days that I'm super-appreciative.
Then, he says he is 3rd generation dairy farmer. His kids are in 4-H. His wife runs the 4-H horse group in Waverly. Wait a minute, I say, didn't we host them for a farm tour and demo last December? Yes, yes we did.
His kids ride horses; his daughter is looking for a horse to upgrade to now that she's outgrown her pony. He knows exactly where our farm is, and even knows what kind of trailers we use-- "the little ones, right? Look like you could put a bale of hay in them, and that's all?"
So this guy speaks our language, knows us, knows farming, knows inter-generational succession-planning issues inside and out.
And he thinks financing this operation is a no-brainer. From the great credit and collateral that we bring to the table to the incredible investment any land purchase is in the era of gas-lease-mania, to the immaculate condition we keep our fences in, he thinks this is a brilliant opportunity for us, and something the bank should back.
Holy shit.
We talk more about some of the legal buggery and the hitches and bumps to get past, but he's convinced we can do it. The only question for him is whether this is a commercial mortgage loan (since the LLC owns the land) or a personal mortgage loan (to a partner in the LLC). He has to talk to his commercial lending guy and will get back to me on Monday.
And then we keep talking. He's a farmer; his dad, uncle, and brothers are farmers; his granddad ran the farm, with the farm checkbook in his shirt pocket in the hospital until two days before he died. He wants his kids to have a secure future, but sure as hell wants them to have the farm, too. He gets it.
And then he mentions a neighbor of ours, and I say, "Oh, Paul-- he's our contractor; he's doing the site prep!" And he goes, "Beetle! Oh, he's great; he'll do a great job for you!"
It's all small-town, friendly, farm-oriented, familiar... and I am so relieved.
So much of this stuff, all along the unexpected, unfamiliar way, has felt pre-ordained, like someone has laid out this path especially for us... today was another touchstone along the way. Try to cling to the familiar, the safe, the established (like our Credit Union) and get rejected. Step out into the ether, and find a beautiful safety net stretched out below.
Who knows? It could all fall apart and turn to shit, but right now it feels like it might just work out.
On Tuesday, I phoned our credit union, which has held three car loans, a home-improvement loan, a home-equity loan, and all our paychecks for the nearly 18 years we've been married. We're at the point with this credit union that, when it's time to buy a car, we call and say, "we're going car shopping," and they say, "okay, you can spend up to XXX. Call us when you need the check." And their XXX figure is always outrageously more than we'd ever spend on a car. (It's just a car, for chrissakes!)
So we have a history, a good credit rating, and a familiar relationship.
So I called on Tuesday to ask for a sit-down to talk out the eccentricities of buying this farm thing. It's an odd deal, since we're buying into partnership on the LLC that owns the land of the farm, and then asking to borrow more money to put up our housing...on the land that is owned by the Farm LLC, into which we've just bought... so, it's a little more complicated than just a regular mortgage, particularly since we've decided on the double-wide...those are a whole other kettle of fish. So we need a sit down.
So I call up and introduce myself and say I'd like to schedule a time to discuss financing around our purchase of a farm. The girl says, "Is it a working farm?" And I, all proud as can be not to be one of those poseur hobby-farmers say, "Oh, yes!" and the girl says, "We don't loan to working farms."
"Huh?"
So I say, "well, really we're just looking for financing of a residence at the farm, not financing for the farm itself." And the girl asks, "Is the residence going to be on a working farm?" "Uh, yes." "We don't deal with working farms."
So I said, "Seriously? Not at all? Not even a home equity loan against our current, non-farm house?" and she says, "Hold on, let me ask," and puts me on hold. Pause. Pause. "Um, ma'am, we can't do any lending with working farms."
Wow. I am thunderstruck. No idea this would be the response. And after being thunderstruck, I start to get anxious. Shit...our primary lending agency won't have anything to do with us... WTF do we do now? Holy crap, is the mortgage crisis in America so screwed up that we're dead in the water before we get started?
So...I send an email to the Bank, yes, Bank, not Credit Union, different entity entirely, that holds the Farm's business banking accounts and detail the entire plan-- that we're buying into the LLC, that we want to put up a double wide, what our estimates are, what our credit rating and current debt load are, what our city house is valued at, and the fact that we intend to sell the city house AFTER moving into the doublewide that we're asking to finance. I figure, shit, get it all out there in the email and see what happens before even getting terribly involved.
So in about an hour, I get a really friendly email back from the branch manager, who is also a loan officer, that he's pretty certain they can help us out, and he'd love to sit down and talk with us-- when would we like to come in?
Well, that's a friendlier reception, so I'm at least optimistic about that. I set up an appointment for Friday morning before work.
And then I fret for the rest of the week... running scenarios, agonizing about the weirdness of the transaction, worried that our credit, while rated really well, is just a sham and that we have no money and no one will think us a good risk.
And then my car craps out on me. Current estimate-- $400, but we won't know until that work is done whether more work needs doing, and the parts for the $400 job have to be ordered, so I'm out a car and looking at putting the next paycheck, which was supposed to go to paying the school taxes at the city house, into the damn car.
Fret, freak, stew, worry.
Finally Friday comes this morning, and it's snowing a bastard out. The usual 30-minute drive to the farm takes 50-minutes, so I stop in, grab some financing paperwork, throw some carrots at the kids, and hope to be able to get the loaner car back up out of the farm driveway, over the plowed-to-the-side hump of snow, and get to the bank in time. Or at all.
Get to the bank, ask to meet with Mr. XXX, and the teller goes, Mr. XXY? Yes, that's it; I suck at names, particularly when I'm nervous. Mr. XXY comes out, has me into his office and we begin.
And it all gets better from there. He's got a full rundown of what I sent him in the email--- he paid attention, knows who I am and what I want. That doing of homework is so often NOT done these days that I'm super-appreciative.
Then, he says he is 3rd generation dairy farmer. His kids are in 4-H. His wife runs the 4-H horse group in Waverly. Wait a minute, I say, didn't we host them for a farm tour and demo last December? Yes, yes we did.
His kids ride horses; his daughter is looking for a horse to upgrade to now that she's outgrown her pony. He knows exactly where our farm is, and even knows what kind of trailers we use-- "the little ones, right? Look like you could put a bale of hay in them, and that's all?"
So this guy speaks our language, knows us, knows farming, knows inter-generational succession-planning issues inside and out.
And he thinks financing this operation is a no-brainer. From the great credit and collateral that we bring to the table to the incredible investment any land purchase is in the era of gas-lease-mania, to the immaculate condition we keep our fences in, he thinks this is a brilliant opportunity for us, and something the bank should back.
Holy shit.
We talk more about some of the legal buggery and the hitches and bumps to get past, but he's convinced we can do it. The only question for him is whether this is a commercial mortgage loan (since the LLC owns the land) or a personal mortgage loan (to a partner in the LLC). He has to talk to his commercial lending guy and will get back to me on Monday.
And then we keep talking. He's a farmer; his dad, uncle, and brothers are farmers; his granddad ran the farm, with the farm checkbook in his shirt pocket in the hospital until two days before he died. He wants his kids to have a secure future, but sure as hell wants them to have the farm, too. He gets it.
And then he mentions a neighbor of ours, and I say, "Oh, Paul-- he's our contractor; he's doing the site prep!" And he goes, "Beetle! Oh, he's great; he'll do a great job for you!"
It's all small-town, friendly, farm-oriented, familiar... and I am so relieved.
So much of this stuff, all along the unexpected, unfamiliar way, has felt pre-ordained, like someone has laid out this path especially for us... today was another touchstone along the way. Try to cling to the familiar, the safe, the established (like our Credit Union) and get rejected. Step out into the ether, and find a beautiful safety net stretched out below.
Who knows? It could all fall apart and turn to shit, but right now it feels like it might just work out.
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