Land purchase

[oil barron]

Christ you are a brave man! You come and tell her

Tel her you are thinking about not getting metallic paint on your next new truck. We are all in this together making tough choices.

Only thinking about it mind. Don't make any rash promises you might regret

 

[horizontal]

Dont think you can come to any conclusion without knowing the profitabiity of your underlying business and existing balance sheet (not that I am asking you to post it on here!).

Just because the bank will lend it, doesnt mean to say its definitely the right thing to do. Remember the bank are just another inputs supplier to your business, selling you money.

If there is reasonable competition for the land now, then the chances are your risk will be less because you will be able to sell it on more easily in the future (if you have to) and its value will be more robust. If no-one else wants it be careful - its future value is only what others will pay for it and if there is no competition now there probably wont be in the future so you may struggle to move it on for anything like what you pay for it.

There is definitely a two tier market round here with poor quality slow to move and ay significant discount to better land.

 

[Farmer Dod]

If you say "no" will you be sitting in a couple months time regretting you hadn't gone for it? Only you will know if the figures make sense and it lets you expand and develop your business in the right way. As has been mentioned previously if things go wrong it's always there to sell again. If it comes to that at least you've had a go-there are many, many farmers who stand back from expanding and the risk that entails and ultimately wonder why they've been left behind. It is a helluva commitment but could also be a great opportunity.

 

[Walterp]

If you say "no" will you be sitting in a couple months time regretting you hadn't gone for it? Only you will know if the figures make sense and it lets you expand and develop your business in the right way. As has been mentioned previously if things go wrong it's always there to sell again. If it comes to that at least you've had a go-there are many, many farmers who stand back from expanding and the risk that entails and ultimately wonder why they've been left behind. It is a helluva commitment but could also be a great opportunity.

I sympathise with the sentiment expressed, but another way to look at it might be Risk/Reward - the size of the risk, given that (a lot of) capital is being borrowed, may far outweigh the reward that'll accompany owning a few extra acres [that could probably be rented easily enough].

Better Example: mainly tenant dairy farmer running 1200 cows on three units, buys another farm of 325 acres for £2,000,000 then spends c. £750,000 on infrastructure - all borrowed. Takes milking cows to 1700.

The risk/reward balance would be an extra debt of £2,750,000, the reward extra annual output of roughly £500,000. (See this week's FG for more details).

If you scaled this down to the OP's circs, I'd suggest the risk/reward is out of kilter - it's too much money for not enough opportunity.

 

[hindmaist]

It depends on "the young" doesn't it?

 

[ARW]

ring the bank manager and just buy it, u know your going to despite what we all say!

 

[willie waver]

You sound like my Dad!

And the reason I don't involve him in anything I do,he just held me back.

we all become our dads eventually........

 

[Walterp]

we all become our dads eventually........

What? You mean I will, in time, become a drunken, lazy, exploitative, stupid, dishonest, philandering, fat, greedy and dishonest pansy?


[Walterp mutters darkly to himself and examines his keyboard carefully: "I'm sure I didn't type 'Pansy'. Let's see - C U - ah! I see now!]

 

[Blue.]

we all become our dads eventually........

And his favourite quote " As I am now so you shall be"