Farm Talk: Buying a Ranch vs. Building From Scratch

Paul discusses the differences between buying an existing ranch, or starting from scratch and building your own.

Paul tells us about the advantages, and disadvantages, in both.  If you purchase an existing ranch, you can imagine that there are quite a few things that are already built and ready – such as a barn, guest house, animal structures, corrals, orchards, etc. But what you might not realize is that there are other very important things in place, as well – such as underground water, natural gas, and electricity.

The alternative to this, is building a ranch from scratch – purchasing vacant land, designing the ranch of your dreams, and putting it together.  This will appeal to some folks who are very particular and have the time, and the means, to see their vision through to fruition – but there is a lot to consider!

Paul shares a great story about a recent client who was looking at ranch land, both small (5 to 10 acre range), and large (over 100 acres).  His client wasn’t sure exactly what he wanted, so Paul helped him narrow down his wants & needs, and gave him the pros & cons of buying a ranch, as well as starting from scratch.

Tune in and hear some valuable information that will help you make an informed real estate decision!

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Farm Talk: Buy a Ranch vs Build from Scratch

Today I want to talk about buying an existing ranch versus building one from scratch. What exactly do I mean by that? Well, buying an existing ranch would essentially be buying a property where all of the structures, infrastructure and any orchards are already in place. The house, maybe a guest house, Equestrian Barn, workshop barn, etc. are all existing or mostly existing. Also, there might be some animal structures like pens or corrals. And, of course, all of the things that we don’t really think about – the things that we take advantage of. Things like the underground water, natural gas, electricity, etc.; those are all in place. Then the alternative to this is building a ranch from scratch. That would essentially entail buying vacant land and then designing something of your dream and putting it together. For some folks, quick and easy is the way to go and for other folks that are more particular and have the means and the dream to start something and carry it through fruition, building something from scratch might be the option.

A few days ago, I was contacted by a gentleman named Jim from Los Angeles and Jim was looking online at various “ranch properties” and I would say most of them were vacant land, but there might’ve been a few exceptions. He was kind of scattered all over the place looking in a 50-mile radius. Some of the properties that he was looking at were small – in the five to 10-acre range – but then he was also looking at some properties that were over 150 acres in size. It was clear to me that he’s not quite sure what he wants to do, whether he wants a small property or a big property, whether he wants something existing or something that he wants to build from scratch. So, I reached out to him and I said, “Hey Jim, I’m here to help you and maybe you can tell me a little bit more about what you’re looking for so that I can assist.” He’s open to both ideas; both buying a ranch as well as well as building something from scratch. And he needs a house with at least six bedrooms, whether it’s already built or whether he has to build it himself. He also has a budget of 1.5 million for the purchase, so a quite sizable purchase, but then he also can put quite a bit of money into making it his own. He also wants to make sure that it’s within two hours’ drive of Los Angeles because if you get any farther than that, he’s probably not going to enjoy it all that often because it’s just going to be too far away to visit on a frequent basis.

I threw out the pros and cons of both buying existing versus building from scratch. Now with buying existing, of course, it already exists and you’ve got to like it or you got to like it enough to live there, but you can always make changes. And again, one thing people don’t appreciate, I think, are the fact that utilities are in place. So if you’re going to buy, let’s just say a 50 acre property and your driveway is 300 yards long, well you can turn on the water, you can turn on the natural gas or you have propane, you can turn on the lights. Utilities are a huge factor when buying existing or building from scratch. The house might not be completely to your liking, but you can remodel it or you can add on to it. You might not necessarily be able to change the style completely. You wouldn’t go from Spanish Mediterranean to Ultra Modern, but you could change things within reason.

Another factor is being able to put in the outbuildings, or maybe the outbuildings are already there. With an existing ranch, oftentimes you might have an equestrian barn or an outbuilding and those can be modified. You can also do some additions to these various structures. With the permitting process alone, it’s going to be a much shorter timeframe to remodel or even do an addition than build from scratch.

With building from scratch, I say to people if you’ve always had a dream of building a log cabin, then go ahead and do it right? The likelihood of finding a log cabin that you like is going to be pretty remote and building from scratch in our area is probably going to take upwards of two years. You could spend a lot longer than that just trying to find the perfect log cabin, they just don’t come up in our area. But if you want to build a log cabin and you’ve got the means to do it, then by all means go for it. At the end of the day, you’re probably going to be underwater financially when you buy land and then build, because most people do not appreciate the cost of building. Again, you’ve got to trench utilities long distances, you’ve got to satisfy California earthquake requirements. If you’re building on a hill, long gone are the days of flattening out a pad and pouring concrete and building on top of that; you’ve got to satisfy the earthquake requirements and be able to attach the home to some type of bedrock which could require case-ons. This is tens and tens if not hundreds of thousands of dollars before you even put up one wall. But again, if the dream is large enough and specific enough, you might want to build from scratch. In this particular case, talking to this client, he’s decided that buying something existing is a better option for him than building from scratch given his timeframe and budget. He needs a six-bedroom house within two hours of Los Angeles, and I might not be able to find him a six-bedroom house, but I can certainly find them a four-bedroom house and I might be able to find them a five-bedroom house. I might be able to find him a three-bedroom house with a four-car garage, which could essentially be turned into more bedrooms. So, there are options with stuff that’s existing. He’s going to have a house much sooner than he is building from scratch, it’s going to be less expensive, and the permitting process for remodeling is going to be much less cumbersome than buying vacant land and starting from nothing.

The two options are definitely both available – buying a ranch or building, it just depends on your timeframe, your budget, your vision, and of course finding the perfect property and making it yours. We’d love to get some feedback, always feel free to email or message us.