Financing a farm

[smj1]

How have people that aren't born into it managed to purchase a farm? Is it possible to get a mortgage for it? We currently own a couple of parcels that we have worked our arses off to get, and have a mortgage on a house but would love to purchase a holding rather than spend our whole lives driving around but have no idea how to finance it.

 

[Flat 10]

How have people that aren't born into it managed to purchase a farm? Is it possible to get a mortgage for it? We currently own a couple of parcels that we have worked our arses off to get, and have a mortgage on a house but would love to purchase a holding rather than spend our whole lives driving around but have no idea how to finance it.

Tell me if you find out. I think its just a dream for many of us. Tenant here on the vast majority of my land.

 

[Humble Village Farmer]

Tell me if you find out. I think its just a dream for many of us. Tenant here on the vast majority of my land.

Whereabouts in the country?

 

[teslacoils]

Sell vaccum cleaners?

 

[farmerm]

How have people that aren't born into it managed to purchase a farm? Is it possible to get a mortgage for it? We currently own a couple of parcels that we have worked our arses off to get, and have a mortgage on a house but would love to purchase a holding rather than spend our whole lives driving around but have no idea how to finance it.

Generally by making a shed load of money doing something not farming related first.... Land values have little relationship to farm incomes. After interest and some pocket money to live off you would need a very intense operation to have any hope of making enough to pay down the large capital borrowing. Clive and others here would tell you not owning land is not a barrier to running a successful farm business though....

 

[2wheels]

usually builders, financiers contractors etc..

 

[Suffolk Serf]

The trouble is that the value of farmland bears no relation to the earning capacity.
Currently, banks look at your ability to service the debt from existing enterprises.

 

[Hilly]

Earn the money doing something else is a good start.

 

[brigadoon]

Outside Income - its either that or a major inheritance or gambling / lottery win

 

[livestock 1]

Bought one and rented one at the same time. Sorted the money out after the purchase and the tenancy. That’s probably not an advisable way to do it though. There’s more scrutiny on lending now than there was then. Be prepared to work hard and make sacrifices.
Nowadays the best thing to do would be to speak to a bank with some projections.
You will need more money than you think so don’t run yourself tight. Remember it’s one thing buying the land and another thing to stock it and buy what you need to run it at a profit.

 

[Hfd Cattle]

How have people that aren't born into it managed to purchase a farm? Is it possible to get a mortgage for it? We currently own a couple of parcels that we have worked our arses off to get, and have a mortgage on a house but would love to purchase a holding rather than spend our whole lives driving around but have no idea how to finance it.

Marry into one ....

 

[thesilentone]

How have people that aren't born into it managed to purchase a farm? Is it possible to get a mortgage for it? We currently own a couple of parcels that we have worked our arses off to get, and have a mortgage on a house but would love to purchase a holding rather than spend our whole lives driving around but have no idea how to finance it.

Given you already own a house and land , it is not impossible, in fact there could not be a better time.

You need a detailed business plan that is deliverable, and you believe in. Releasing the equity in you're house and using a deposit for phase 1 (farm steading and some land) add this to you're land, or sell this as well and, pile all you're equity together and see where you are.

You need set-up and operating capital, this also needs to part of the plan.

Anything can be done, it all comes down to profit at the end of the day, and what sort of enterprise you want to be.

 

[PuG]

Given you already own a house and land , it is not impossible, in fact there could not be a better time.

You need a detailed business plan that is deliverable, and you believe in. Releasing the equity in you're house and using a deposit for phase 1 (farm steading and some land) add this to you're land, or sell this as well and, pile all you're equity together and see where you are.

You need set-up and operating capital, this also needs to part of the plan.

Anything can be done, it all comes down to profit at the end of the day, and what sort of enterprise you want to be.

And come Friday you will be living out of a cardboard box... especially with no guaranteed subvention money to come in the future. Its all good on paper, and people tend to will the figures to what they want to see but its tough - people here who are spot on with there business is due to experience and knowing there figures inside and out. Your working with small profit margins coupled with large capital costs and expenditures. Only takes a few mistakes or loss of stock, dry summer...

 

[livestock 1]

If it was me doing it again now I would change a few things.
Borrow more working capital which will kick start your business straight into maximum profit from the outset. In other words find out what is the maximum profit the farm can generate then work out how much money you need to finance this.
Look at something as big as you can manage to finance in terms of the initial outlay and working capital, there are some economies of scale on larger outlays.
Look at farms which will have planning potential or parts that you can offload for a good price without effecting the general running and profit of the business. It’s always good to have a backup plan if necessary. This is nothing new it’s the oldest trick in the book.
No need to do it the hard way

 

[czechmate]

How have people that aren't born into it managed to purchase a farm? Is it possible to get a mortgage for it? We currently own a couple of parcels that we have worked our arses off to get, and have a mortgage on a house but would love to purchase a holding rather than spend our whole lives driving around but have no idea how to finance it.

Look outside of the uk.

 

[Mixedupfarmer]

Tell me if you find out. I think its just a dream for many of us. Tenant here on the vast majority of my land.

Same here and hard enough to get that far

 

[Longlowdog]

Make some money (that your kids have their eyes on) doing something else and buy a farm to spite them as they watch it all fritter away.

 

[ARW]

Don’t run tight on working capital, if you have no capital you make poor business decisions to fund the cash flow.
Keep working hard to earn money?

 

[livestock 1]

Look outside of the uk.

Poland?

 

[Flat 10]

Given you already own a house and land , it is not impossible, in fact there could not be a better time.

You need a detailed business plan that is deliverable, and you believe in. Releasing the equity in you're house and using a deposit for phase 1 (farm steading and some land) add this to you're land, or sell this as well and, pile all you're equity together and see where you are.

You need set-up and operating capital, this also needs to part of the plan.

Anything can be done, it all comes down to profit at the end of the day, and what sort of enterprise you want to be.

I should have said fair play on what you have achieved well done @smj1