It might be an awkward discussion, but toughen up because this could lead to your dream farm.
There are farmers of retiring age out there waiting for you to ask them; will you sell me half your farm?
To make the discussion easier, take with you a fruit bun, youthful exuberance and the knowledge that there are investors out there who will back you to own a farm.
You should also be buoyed by the fact you are offering the retiring farmers an amazing succession opportunity.
Your opportunity frees up cash for the retiring family to do what they want in retirement. Buy a house in town or in Noosa. Take that holiday to New Zealand. All the time drawing income from their remaining equity in the farm which is being run by a new, enthusiastic family (i.e. you!).
The great news is that you don’t have to raise the 50% equity on your own.
You may already have some cash or assets that you can use to own some of the farm; a herd of Wagyu, savings for your house, broiler chickens or a tractor. This way you can go into the arrangement as the managing partner from day one.
The remaining 30-40% can be snaffled up by investors. There are plenty of people out there wanting to invest in farms and are seeking this type of opportunity which you have kindly put together out of your own initiative and handed to them on a plate.
It will be a solid investment opportunity because the hard work has already been done – you have found a farm, covered 60% of the capital requirements (the retiring farmer and yourself), maintained local expertise (retiring farmer) and have secured a young family with initiative and drive who will take the farm over and make it profitable (you).
How do you find these investors? You could spend some time Googling them or put out an ad on Facebook. Or the other option is to talk to farm match-making organisations who spend their waking hours finding opportunities like this for investors.
Cultivate Farms is one such organisation; they are a social enterprise aiming to rejuvenate regional communities by bringing young families back to regional communities. They connect young families with investors and retiring farmers to own and operate a farm together.
You could be in a powerful position to have your own farm in short period of time, if you connected with your own retiring farm and brought that opportunity to Cultivate Farms.
The agricultural industry has been crying out for new investment models to transition land between generations. Don’t sit around waiting for someone to find that solution for you – the ball is in your court. Get out there and BYO retiring farmer.