Farm sale and leaseback with buy back option
We can offer our subscribers the opportunity to invest in a large, up market farming estate comprising of cottages and traditional farm buildings along with 300 acres of land, located in the North of England.
The client wishes to raise capital by selling 220 acres of land, which he will rent back from the buyer over the next 10 years.
Investors will purchase the land at a 30% discount off market value terms with an option for the farmer to buy back at the same 30% discount at the end of the contract term. If he chooses not to the buyer has the opportunity to sell at open market prices and make a significant capital gain.
Numbers:
Approx valuation of the farmland = £6k/acre*
*subject to 2 independent local and national valuation reports
220 acres of valued UK Farmed land = £1.32m
Purchase price @ 70% of the valuation = £924k approx.
10 years Tenancy @ 8% of purchase price =£73,920 p.a
=£739,200 after 10 years
Deposit:
10% (£92,400 approx.), remainder on completion.
Financing available after completion @70% of purchase price at approximately 6% p.a.
Exit:
Legal option granted for the farmer to buy back at 50% of the tenancy period or before expiry of 10 year FBT for 70% OMV (subject to valuation report), thereby offering capital gain opportunity.
Summary of opportunity:
- Farm Sale and Leaseback with Buyback in 10 years
- Regular secured income with Capital Gain opportunity
- 8% gross rental yield per annum for 10 years
- Purchased at 70% OMV
- Able to re-finance after completion at 70% LTV
- Farm Management Service available to monitor tenant
- Sold back to farmer at 70% OMV
For further information, please fill in the enquiry form below.
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