Case Study

Case Study: Valuing Land in Pocahontas County

Hosted by Rob Moore, an experienced farm operations professional, this test case uses an off-market opportunity to demonstrate how Acres can be used to help value a property.


Let's dive into an intriguing case study that perfectly exemplifies the power of Acres in providing deep insights into land value and its potential suitability for investment. Hosted by Rob Moore, an experienced farm operations professional, this test case uses an off-market opportunity in Pocahontas County, Iowa to demonstrate how Acres can be used to help research the value of a property.

 

The Opportunity

A farmer from Pocahontas County, Iowa reached out with a potential investment opportunity. The farm, priced just under $10,000 per gross acre, amounted to a total investment of around one and a half million dollars.

Calculating Cost Per Tillable Acre

Given that this property is farmland, the first step was recalculating the cost on a per tillable acre basis rather than gross acreage. Clicking on the FSA (CLU) map setting allowed Rob to easily identify 130 tillable acres and adjust the price to about $11,500 per farmable acre.

The FSA layer overlays the map with boundaries for tillable acres

Regional Sales Data

Next, Rob searched for comparable sales using sale date, type, and acreage. The Sold Land layer in Acres allowed him to easily find data from the past six months, and he was able to confirm that the offer came within a reasonable price range for the region.

Land Diligence

Rob began his land diligence process by looking at the soil data available in Acres. This property has an 83.3 CSR2 and the dominant soil types are heavier clay soils. The soil data paired with the elevation layer revealed potential flooding concerns, with moderate erosion and a significant slope in the southwest corner.

The flood layer, historic vegetation index, and historic satellite imagery helped Rob confirm this risk by showing a reduction in vegetation related to standing water. This provided important insight prior to visiting the property.

The flood layer reveals potential risks on the property.

The Decision

Rob used his research on Acres to support on-site diligence. When taking this into consideration alongside additional data, like property tax and county yield information, Rob’s valuation came in below what the seller found acceptable. The decision was made to pass on the opportunity due to the disconnect between the seller’s and buyer’s expectations.

Final Thoughts

Remember, the decision to consider or pursue an opportunity should be based on individual circumstances, preferences, and the advice of qualified professionals. As demonstrated by Rob's process, Acres is a great starting point for your research. It not only helps with on-site diligence but also allows you to make more informed decisions that meet your needs.

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