finance for land purchase

[Joseph H]

Morning all,

Some agricultural grazing land has come up for auction near where I ideally want to be located guide price is 30k for just over 3 acres. It currently has a steel framed barn on ideal for me to start up my new business, also good area for a small camp site which the informal chat to the planners seem ok about.

Can anyone recommend a finance/mortgage company for this?

Still in full time employment so have a steady income.

Thanks
Joe

 

[Christine Hough]

If not from banks (I don't know much about how they would view this) There is always crowd funding.
I expect either way you would need
a) a good business plan
b) to invest a percentage of your own money

 

[businessfunding]

Just to clarify crowd funding isn't an 'easy option' it is merely an alternative - the crowd are a tough bunch to please!

In reality there are 3 distinct sector: the (high street) banks the crowd and the private sector.

On the 3 the private sector is by some margin the most innovative and pro-active

Which isn't to say they are a push-over. Specifically they want to know what you are putting into the transaction and of course how you will pay. I would save your effort on the business plan they will only be interested in established and proven revenue streams

 

[Joseph H]

Thanks for the replies.

As for crowdfunding, I don't think the crowd would be particularly interested.

As for the private sector, any ideas where best to look? And what they would expect from me. I would be looking to pay back over 5 - 10 years.

 

[PaulThompson]

Hi Joseph
You're not going to find this easy, quite a small piece of land & quite a full price (depending on where you are in the world)
I have a couple of possibilities depending on the strength of your accounts and how much you need, please drop me a line and let's take look.

 

[Naive citizen]

I thought the only time you could get finance was if you didn't require it.

Have any of your family got any properties they can secure a personal loan against. That would probably be the easiest thing.

 

[Naive citizen]

Bearing in mind that it's land, it can always be sold again if your adventure turns out to be unsuccessful.

 

[PaulThompson]

I thought the only time you could get finance was if you didn't require it.

If that was the case I don't think I'd have made a living from finance broking for the last 17 years!!

Have any of your family got any properties they can secure a personal loan against. That would probably be the easiest thing.

Easy is not always best - especially when it's bringing a 3rd party in to provide security (and potentially lose their home). What if the land has to be sold in a hurry and you can only get £6k per acre? The shortfall comes from the property.
Joseph - Take professional advice.

 

[Naive citizen]

If that was the case I don't think I'd have made a living from finance broking for the last 17 years!!

Of course, all the people you turned down were the ones who required the finance.

Easy is not always best - especially when it's bringing a 3rd party in to provide security (and potentially lose their home). What if the land has to be sold in a hurry and you can only get £6k per acre? The shortfall comes from the property.
Joseph - Take professional advice.

Fact is, £30k isn't a lot of money these days when compared with the average price of a house. Supposing the worst happened. The loan is secured against the property, so the land is sold in a hurry but you've got £18k in the bank after selling it off cheap. Service the debt with that whilst looking for a new job. Restructure the debt minus the £18k, minus any payments already made. Pay off whatever's left over the next few years. Ideally you would succeed but if you didn't, that level of risk is pretty manageable.

 

[businessfunding]

I thought the only time you could get finance was if you didn't require it.

.

100% wrong

There is a wide range of products and a huge pot of cash to lend

The fundamentals are that a lender will want the borrower to be fully committed to the business and have something to back it with. (something more than dreams and B/S)

Something to back it with can range from a solid trading history to a significant confirmed order; from invoices to freehold property

Show me a viable borrowing proposition and I will show you the money

 

[Talay]

£30k is not £300k. Whereas I might not expect many people chucking in their day job to have £300k in the bank, I might expect quite a few to have £30k in savings, ISAs, etc.

I might be reading it wrong but it sounds like the OP wants to borrow the whole £30k and make payments out of his salary, which might be a fine idea, but can't you just get a regular bank loan (nothing to do with a business) or draw money from your property ?

If finances are tight, then can you do a private deal to buy with the current vendor ? say £10k down and £1k a month for 20 months etc.

 

[Joseph H]

My wife and I are have just started a self build project so I do have the cash its just been allotted to getting the house up and done. Looks like I'm just going to have to wait until the house is built then start looking around for some land again as the house will be mortgage free I guess I could get a small mortgage out on it to purchase the land.

Shame as I hate waiting

 

[Talay]

My wife and I are have just started a self build project so I do have the cash its just been allotted to getting the house up and done. Looks like I'm just going to have to wait until the house is built then start looking around for some land again as the house will be mortgage free I guess I could get a small mortgage out on it to purchase the land.

Shame as I hate waiting

Er...no.

If you will be mortgage free and you don't want to wait, then why not use the cash to buy this land now and simply raise some finance to finish the self build ?

Doesn't have to be waterfall.

 

[PaulThompson]

Alternately we can just arrange a loan for you to purchase the land, as we've pointed out above - it's not impossible... in fact, it's highly probable!