[X80]

Ok just enquiring with some finance brokers on farm finance and looks like my only options are purchasing lots under 50 HA, per title, that means I'm stuck in high rainfall to make any sort of money, they can do 20% deposit on that, once over the 50HA limit it's business plan, high interest rate 40% deposit and have been told by two brokers being young farmer forget it, no chance, however I can purchase using my payslips easily as longs as under 50Ha..

Question is can I use super to help deposit and borrow the balance, my accountant said he thinks not? That would give me 200k to help buy a place etc...

If my toolondo block sells I can pay my portland block out of super leaving me with only house debt which I can rent out and be positively geared,..essentially debt free...

That gives me over 9k a month spare cash...I can borrow over a million to buy unit in melbourne at drop of a hat...

Brokers are saying keep pushing as saying you want farm as principle place of residence...to try and get them to sway if possible...

I have someone inspecting toolondo for second time this weekend so if sells by march April next year I can be in a position to buy..

I found a place at Connah...454 acres 1.2 million with amazing house, infrastructure and 240 meg water license...

Ant...

 

[madsnake]

From what I have been told a lot of compliance hoops to jump and banks charge a premium interest rate. Sounds like can be done but not very simple. Also need a good lease agreement. This is a from what I have been told.

 

[X80]

Lease agreement is with my self..have all that sorted...it's just if I ca borrow..if not i will put my Portland block in it and that makes me close to debt free, then shop the banks hard..and save like crazy for deposit...

The rules by these banks are crazy, I know ag is risky etc..but they frequently get caught out with doing dodgy investments and have to sack traders, they give bad advice and have to pay compo, the tax payer is the guarantor for the savings, and they are protected by the govt...which I point out work for me...

Sun corp met way go to 30% deposit for ag if you are on wage etc...

There must be other people looking to invest...or I guess the lure of the big city is not worth passing up..

Ag in Australia has created an industry that is extremely hard to be involved in if you don't have bucket loads of cash or are already in...surely that's concerning?...it pretty much guarantees failure at some point in the future,....

Ant...

 

[madsnake]

Sounds like there is a in between used between bank sand super fund when super fund lend money.

As for the bucket loads of cash maybe maybe not, still seems Australia is batter than trying to start out in spoon feed country's for farming.

Madsnake

 

[X80]

I will get there...no doubt...but you just getter better value for money buying something with a little bit of size instead of "blocks"...

Either way I can buy land...will just keep beating the bushes in case there is an option...STO gave me a contact I will call next week...have plenty on my plate for now but need to get sorted soon so if opportunity is there to take it...I like this farm in condah...but maybe a bit out of my league for a minute...

Ant...

 

[X80]

Westpac also 30% deposit...getting warmer...


Ant...

 

[madsnake]

At 30% if you got fiancé what would your equity levels be like? Would your wage be enough to meet interest bill each month and farm ground?

 

[X80]

Yes

Ant...

 

[madsnake]

Grdc got some real interesting stuff on farm $ and even touch on self managed super.

 

[X80]

I can pay interest and principle...farm it, maybe not at absolute 100% ball tearing capacity but close...

Equity level would be 30%...Portland farm 100% and house 80% (dam divorce)... But rent will cover it 100%...

Anyway one step at a time...2015 cropping program is priority...and if toolondo sells setting up smsf...

Ant...

 

[X80]

1.2 million for this...you have to spend some bucks to get value..works out $2600 acre..

Hamilton address available on request - Livestock for Sale #7680831 - realestate.com.au

Buying small blocks just don't cut it...doable but hard as you pay premium per acre...often with poor or no infrastructure.

 

[X80]

Sold my toolondo farm....can put Portland farm in super now...2015 looking better already.

Ant

 

[madsnake]

Sounds like having super in farm land can get mess as it comes time to take allocated pension. Ok if the farm land is just a small part of the funds value at that point but no good if it is a high % of value.

 

[X80]

Yes snake agreed, it will only be my Portland block and maybe another one which has a secondary income attached...I will still buy main holding privately...

So plan is to have some farm land, shares and unit or two in melbourne ...in super fund...

Just trying to see if I can get this 160 acres in fund...would have it all set pretty nice then...

Ant...

 

[madsnake]

Not my take on it take on it off a bloke who runs a **** of a lot of super and investment funds.

 

[X80]

I'm lucky my accountant is a bit of a guru on the subject..it comes down to won personal situation. In my case the farm land can be rented when in mode with it, the radio tower lease (if I get next property) will keep paying yearly, and the shares can be sold down, plus units sold off or live off the rent as they will be close to paid off...

You can't use what's in the super fund as collateral, so not a good idea to load everything into it, however the debt on the super fund is not held against you so u can borrow a bit more...in my case I won't borrow more i will just split it between the super fund and another farm bought privately...so verbally debt is still at what I'm comfortable if the world goes pear shaped...

If you have kids they can rent the farm off you when u wish to retire...and you love off the rent if the land has no debt...then I believe you can leave your super to them in your will so when you kick the bucket it's all there's...

I fully intend at this stage to mine every bit of equity out of everything I own before I kick the bucket...and I will have a thank you sign to the banks on my grave stone...check mate...

Ant...

 

[madsnake]

Have you had a read on some of the grdc stuff to do with farm business? They have some real good info worth a read. This one may not be much value for you but its today's reading for me.

Business structures for the family farm - Grains Research & Development Corporation

 

[diggora]

Thanks for that link Snaker.
Had a quick look at it and it is a days reading and digesting!
Just about finished my first harvest running farm in my own entity so very interested in how to set up business going forward and avoid problems of the past.
Cheers

 

[madsnake]

Sure is, have done one short grdc course on business. Well worth getting to. I save on USB and print book at office works much nicer to read.

Do you use twitter? Grdc an orm worth following.

 

[diggora]

Been thinking about Twitter. A mate tells me its good and send me email posts of interest and have another friend who works at ORM, so get sent stuff from her too GRDC Groundcover magazine has good business articles from time to time. I send these to my accountant to keep him on his toes!
GRDC Short Courses: Will investigate them further but need my wife to come too so we are on the same page.
Lots to think about as I do the last paddock this arvo!