Next door farm for sale. What to do??

j6891 · Jun 1, 2021

So next door farm to me has just come up for sale. I feel it's a once in a lifetime opportunity to extend the farm keeping a ring fenced block and would certainly add a bit of value to my own farm being a bigger block. This is big money so what's the best way to finance it and who should I be speaking too lenders wise. Any advice appreciated

cows sh#t me to tears · Jun 1, 2021

Had the same thing happen here twice. Same block was offered to me 2 years ago. Was a hefty price then. I was keen. Unfortunately old man wasnt. Fast forward 2 years and new owner approached me again. 20% more this time. But he had spent that on infastructure that couldnt be moved. This time old boy thought differently so a deal was done. As for finance all went through our business bank manager. Best dealing with someone who you trust and knows your business.

neilo · Jun 1, 2021

I’m pretty sure I wouldn’t be discussing it on a public forum, unless I’d ruled it out already.

Bossfarmer · Jun 1, 2021

j6891 said:
So next door farm to me has just come up for sale. I feel it's a once in a lifetime opportunity to extend the farm keeping a ring fenced block and would certainly add a bit of value to my own farm being a bigger block. This is big money so what's the best way to finance it and who should I be speaking too lenders wise. Any advice appreciated

how many acres is the block? try the AMC

Ashtree · Jun 1, 2021

On here they say farming makes bugger all money, and you have to be a gymnast to jump through all the regulatory rules. They say the NFU is useless. They say the RT is corrupt. They say Bozza has just sold UK Ag to the convicts who were deported to V Demons Land. They say yanks are lubing up their Ag gloves, in preparation for a trade deal with Bozza.
Get on and buy that block of land.

milkloss · Jun 1, 2021

First question, is it going to make you money now and in the future?

Nearly · Jun 1, 2021

Ashtree said:
On here they say farming makes bugger all money, and you have to be a gymnast to jump through all the regulatory rules. They say the NFU is useless. They say the RT is corrupt. They say Bozza has just sold UK Ag to the convicts who were deported to V Demons Land. They say yanks are lubing up their Ag gloves, in preparation for a trade deal with Bozza.
Get on and buy that block of land.

Buying it just means the neighbours are further away.
Sounds good to me.

egbert · Jun 1, 2021

j6891 said:
So next door farm to me has just come up for sale. I feel it's a once in a lifetime opportunity to extend the farm keeping a ring fenced block and would certainly add a bit of value to my own farm being a bigger block. This is big money so what's the best way to finance it and who should I be speaking too lenders wise. Any advice appreciated

Go first to your own bank, but still shop around. Chat with your own agent about value.

If the potential debt is serviceable - allow for changing circumstances- and that you wouldn't want to sell it again, then fear of a falling 'price per acre' is less of an issue...100* acres remains 100 acres remains 100 acres.
(*insert preferred number here)

Unless infrastructure/logistics/road links are particular, IT WILL NOT 'add value' to your existing block by making it bigger per se....almost every agent would advise to subdivide it again if you were to sell.

nonemouse · Jun 1, 2021

If you can afford it, but don’t put yourself in danger of loosing the lot, try your own bank first, they will at least know your past history, but try AMC as well.
Bought 4 lots of neighbouring land and don’t regret any,even if interest rates were somewhat different for what we bought in the late 80’s.
Also been outbid on 3 neighbouring lots, but I know I couldn’t really afford to have bided any higher on them. The only one that really rankles is the lot we were told by the land agent we had bought, only for somebody to introduce himself 2 hours later as our new neighbour. Not the new neighbours fault, but never trust an agent until you have it in writing.

Salopian_Will · Jun 1, 2021

nonemouse said:
If you can afford it, but don’t put yourself in danger of loosing the lot, try your own bank first, they will at least know your past history, but try AMC as well.
Bought 4 lots of neighbouring land and don’t regret any,even if interest rates were somewhat different for what we bought in the late 80’s.
Also been outbid on 3 neighbouring lots, but I know I couldn’t really afford to have bided any higher on them. The only one that really rankles is the lot we were told by the land agent we had bought, only for somebody to introduce himself 2 hours later as our new neighbour. Not the new neighbours fault, but never trust an agent until you have it in writing.

What did said agent have to say for himself at that stage? Bloody shambles.

Headless chicken · Jun 1, 2021

Write the cheque first then ring the bank manager. Land next door is almost no optional purchase

j6891 · Jun 1, 2021

Currently sitting debt free (thankfully) so what kind of loan to value of purchase can you get?/deposit size needed? Presume better rates for bigger deposits. Any ball park figures just so don't fall over with costs when I approach a lender.

Nearly · Jun 1, 2021

j6891 said:
Currently sitting debt free (thankfully) so what kind of loan to value of purchase can you get?/deposit size needed? Presume better rates for bigger deposits. Any ball park figures just so don't fall over with costs when I approach a lender.

It all depends on what you own compared to what you want to buy. If you give any more info out then 'the opposition' will have the advantage of you.
Ring the bank. Now.
1.5 to 2% over base for 75% loan if you own more than you're wanting to buy.
Have an exit strategy ready if the bank ask. ie to sell off the furthest away 20/50/100 acres if it becomes too much of a stretch.

thesilentone · Jun 1, 2021

If you have a sound business plan, then lending money is a competitive sector. But, you need to employ someone (accountant type) who is familiar with tendering, particularly to who is most suitable for our sector.

If you think your credit rating and plans are strong enough, then go to your existing lender, however take great care, it just takes one to say no, and the rest get very nervous very quickly.

cows sh#t me to tears · Jun 1, 2021

Security is the main thing the bank will want to see. As long as you can service the debt all they will be interested in is the assets you have in the event they have to foreclose.
We did have to have an independent business plan (showing why we needed and what benefit next door was.)done prior to our approval here. Probably a good thing anyway as it takes the emotion out of your decision...

whindy · Jun 1, 2021

Set up a new company to buy the land then let it back to your existing business to cover the repayments. Thus protecting your original farm from any risk of not been able to service loan.
Can be done with a lot of paper work.

nonemouse · Jun 1, 2021

WillB said:
What did said agent have to say for himself at that stage? Bloody shambles.

Farm was being sold by joint agents, the one I'd been dealing with blamed the other, we knew that the vendor and agents were trying to pull a fast one, because the they advertised the farm with a right of way down a lane I own. Despite me and my solicitor pointing out that they had no legal right of way, the particulars were not altered.
They did make the eventual buyer sign a waiver that he was buying without a legal right to use our lane, so after bidding on a farm advertised with an access road he had to set on and build a new lane (several hundred meters) bit of shitty trick on him but he signed on the dotted line.

cows sh#t me to tears · Jun 1, 2021

nonemouse said:
Farm was being sold by joint agents, the one I'd been dealing with blamed the other, we knew that the vendor and agents were trying to pull a fast one, because the they advertised the farm with a right of way down a lane I own. Despite me and my solicitor pointing out that they had no legal right of way, the particulars were not altered.
They did make the eventual buyer sign a waiver that he was buying without a legal right to use our lane, so after bidding on a farm advertised with an access road he had to set on and build a new lane (several hundred meters) bit of shitty trick on him but he signed on the dotted line.

Theres anothe point. If you can deal directly with your neighbor , you can use the lack of commission as a bargaining point for a cheaper price. Also easier to do a deal with directly regarding what they want re settlement and any ancillary things that should go with farm.

D14 · Jun 2, 2021

j6891 said:
So next door farm to me has just come up for sale. I feel it's a once in a lifetime opportunity to extend the farm keeping a ring fenced block and would certainly add a bit of value to my own farm being a bigger block. This is big money so what's the best way to finance it and who should I be speaking too lenders wise. Any advice appreciated

Buying land and then farming it to pay for it doesn’t work at today’s prices. So your either buying it and then putting a rent over your existing farm or your buying it to sell it on down the line when it’s increased in price.

If you think it’s going to pay for itself then walk away now.

Steel · Jun 2, 2021

5 years ago a farm next door was going to auction. We had a meeting with our bank manager and he asked what we would go up to. We decided $1,200 an acre. The bank manager said a farm next door was worth $200 an acre more than any other and we should increase our price, so we decided on $1,400.
We got the place for $1,360 and it would now sell for between $2500 and $3000 an acre.

What extra value do you put on a farm next door, as they don’t come up for sale very often.

Next door farm for sale. What to do??

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Up to 25%

25-50%

50-75%

75-100%

100% I’ve had enough of farming!

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