Hossfly
Posts: 5647
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Joined: 12/3/2001
Last Login: 6/19/2013
From: New Caney,
TX, USA
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quote:
ORIGINAL: ctdahle
Great, now I know that you are willing to discuss real prices in the real world and that is critical. Many R/C ers seem to think that once they own the airplane, they have some sort of constitutional right to a flying site, on public land, for free.
Now lets play with some numbers. They may seem shockingly high, but I suspect that 10 years from now they will seem naively low.
The thing about land is...They ain't making any more of it. So clubs that want to be flying 20 years from now need to OWN their land, and the only way they are going to keep it is if they are associated in a very friendly way with a compatible industry that MUST also have land.
Excellent Post ctdahle.
quote:
I've had the good fortune of living where land is cheap and have been priviledged to fly from nice big flying sites, so I think the minimum size for a flying field is a quarter-section, 160 acres. If I had to start from scratch, I'd look for an irrigated quarter appropriate for growing grains or hay.
I'd team up with the most financially savvy members of the club and I'd form a corporation or LLC that would buy the piece of farmland. These people would have to have the financial strength to guarantee the loan. Then I would find a farmer who would lease the land and grow hay or grain on the overflight area. The LLC would lease the land to the farmer for farming and to the club for flying. Flying activites would have to be scheduled around the farming, but that should be doable. The idea is to have the farm income cover a substantial part of your mortgage payment.
Some of my comments and maybe an easier way: If there is an individual in the club that has a fair amount of retirement lump sum income and would like to have a rather definite income on the amount rather than lose it to the stock brokers, then this option may well work for a club that wishes to own their land. In addition, 50 acres can define a very good RC site, however if the funds are there more is always better. 
1.Incorporate the club: IRC 501 (c) (7) works very well.
2. The retiree sets up an account to purchase the land by rolling over the purchase price into a Trust Held Self Directed IRA account.
3. Retiree then buys the land. The Trust becomes the property owner For Benefit Of XXX (retiree). The retiree then determines with the club the terms of the sale to the club as any regular real estate function. CAUTION: I fully recommend the use of a Real Estate Attorney vice a Broker, as an attorney can usually circumnavigate some state laws that are restrictive in such a dealing. Generally RE Brokers are not able to do such.
4. In the S-D IRA, the retiree CAN act as his own agent. That is better because actions can be accomplished faster and with less problems. Retiree, as own agent, handles all functions of taxes, mortgage notes, any farming leases, and other financial considerations. Normally he will collect funds, turn them over to Trust, maintain all records, and any other considerations. Agents cost money, and do make errors, so doing it by self is less expensive and much easier.
5. Reference farm leases, the size of the land parcel will have different values as well as the tax expenses. Land under agriculture is taxed much less than non-ag land. Jetero RC Club, Inc. has 50 acres. 44 acres is in ag for Hay. The property tax on those 44 acres amounts to about 1/6th of the actual facility 6 acres property tax. The lease to the farmer is free, because he harvests hay 3-4 times a year and keeps the place looking good. The savings in property tax is pay enough for the club, and helps the farmer remain happy when he has to bring equipment, etc., into the area to do the harvesting. WIN - WIN.
6. CAUTION: The retiree can be a member of the club, as long as he pays member dues. He can dictate certain conditions called Deed Restrictions during the sale contract. HE CANNOT serve as an officer or special position as this would become one of the arms-length prohibited transactions which the IRS could then determine the sale amount to be a distribution and the entire amount subject to Federal Income Tax.
quote:
I'm not familiar with land prices in your area, but I'd make a really wild guess that you could buy and improve an appropriate piece of farmland for half a million.
//SNIP//
But you'll need to cover contingencies as well, insurance, maintenance, club house, sealing the runway.
Insurance may cost too much to have. Jetero never purchased insurance. Insurance for such a place costs more than a fine home.  On the other hand when Hurricane IKE wiped out the structure last year, it cost some $20,000 to rebuild.
For 13 years, insurance would have been about as much. ?????? Who knows?
quote:
For a well planned and well managed flying site with a nice clubhouse and a properly and safely laid out runway, I'd say that a $2,000 initiation fee and annual dues of $400 would be reasonable. However, that would put flying out of reach for MANY modelers. Cheaper than golf however (local country club here: initiation fee, $30,000, annual dues, $5,000).
Jetero has been able to maintain a $50 initiation fee plus $150 annual dues. CHEAP! However with the rebuild, and a declining membership, that may not last long. Pure speculation on my part. In addition due to a number of variables, Jetero switched bankers a couple years ago from one retiree to another. IMO a very poor business deal as they went from Prime minus 1, determined each October for the following 12 months, interest to a straight 6.5%. 
Anyway Clubs should be out looking and planning for the next 20 years. I was 20 years younger and that was just yesterday, it seems. Time is gone before one can turn around and no one knows where it went.
Edit: replace a wrong word and add 6. above
< Message edited by Hossfly -- 7/26/2009 8:25 PM >
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