One part of the project is working to find our Aspiring Farmer to take the farm to the next stage, the other is to free up the departing farmer to pursue her own future. Wheels are in motion for the first part, in the meantime, how to free up the other 1/3 so the owner can move on ?
Most people would simply start with extending their current mortgage or refinancing with another bank. It wasn't going to be that simple for us; I had left my well paid job of 30 years to work on restoring the farm and my husband is a self employed tradie. Neither of us had the documented regular guaranteed pay required to satisfy bank lending criteria, assets and equity notwithstanding.
I began exploring funding options to pay that share out, time being of the essence for the other owner. I talked to all my friends and relatives, spoke to all the financial institutions I had ever had dealings with, met with accountants, mortgage brokers, finance experts and self managed super fund gurus. I looked at Peer2Peer finance, Solicitor Loans and crowdfunding. I investigated rolling out our super funds, advertised in all sorts of publications, looked at subdividing part of the farm and selling that. I checked out Ori-Coop and ImpactAg and La Trobe Finance. I even explored the compassionate access provisions of our super.
No good. Everyone said "There has to be a way, you've got tons of equity and plenty of super to come, there's got to be some way to leverage all that !" But no-one knew how. Until Sam from Cultivate Farms suggested DomaCom. Yeah, righty-o, lets take a look. "DomaCom is an innovative new fractional investment platform. From as little as $2,500 you can invest in any property - residential, rural or commercial - anywhere in Australia with your friends, family or other investors.".
Oh yeah, land banking, child care centres, green power developments, highrises, subdivisions. Big stuff, why would they be interested in 100 acres in Tassie ? Ah.... The Next Generation Farmers Strategy. That'd be us then.
DomaCom has created the Next Generation Farmers Strategy to syndicate the partial acquisition of quality agricultural properties from retiring farmers to enable the next generation (NextGen) of farmers to become co-farmers in this vital and vibrant industry. DomaCom investors will have an interest in the property which will be leased to the retiring and next generation farmer.
Working with Cultivate Farms the DomaCom investment platform provides a way to share equity among investors and farmers to provide a seamless succession solution which will be a win-win outcome for both retiring farmers and the next generation of farming families.
Cultivate Farms will assist in helping the retiring farmers to retain partial ownership, secure the best next generation farmer, ensure the farming operation is viable and provide ongoing business governance mentoring support to the farming enterprise to ensure the farm and the regional community thrives.
So, we fit with their program, just how would something like that work for us ?
Our requirements were first security of tenure and second to enable a simple transition for an incoming farmer.
DomaCom achieves the first for us by freeing up the funds to pay out both the departing farmer and our current mortgage. We will retain somewhere between 35% and 50% equity (depending on how much of our Self Manged Super Fund we decide to invest) and lease the balance from the investors. These lease payments are actually lower than the equivalent mortgage payments because we are essentially paying "interest only" rather than principal of a loan as well.
Over time we can buy or sell equity as our needs change; for example when we can access the rest of our superannuation, or when we choose to retire from active use of the land.
The second is achieved by the way that DomaCom provides a platform for buying and selling equity in the farm. An Aspiring Farmer can buy as little or as much equity as they want in small increments, and can buy it from either myself or the other investors. If their circumstances change and they need to move on from the farm their purchased equity can be sold to other investors without needing to change the whole structure of the farm holding.
The Aspiring Farmer can end up holding part or all of the equity, either buying the whole farm back or leaving it in the DomaCom platform to help simplify the transition to another Aspiring Farmer when the time comes.
Our hope is that investors enjoy both the return from their investment in Highclere Farm and the journey that the farm will be going on. We hope that you will put in a little money and then read about the adventures knowing that you have "a bit of skin in the game" as they say.
If you'd like to ask anything about Highclere Farm or the way Cultivate Farms and DomaCom will work for us (or would like me to cover any topic in the blog) my contact email is jodydb@dodo.com.au .
