A referral led Sydneysider Nathan Smith, director at Birdie Wealth, into the country, where he worked the biggest land deal he’d ever had: a 450-acre expanse that his client wanted to turn into a deer farm. Here’s how research, persistence and help from a regional specialist at the bank got the deal across the line
This loan was for a young couple who wanted to purchase a block of land where they could build their dream home and eventually start a deer farm. They were both fly-in, fly-out workers in a WA mine, and they already owned a property in a large town nearby. They wanted to keep that house as an investment property and use the equity to buy the farmland.
Location: Wolumla, NSW
What made it memorable for me as a Sydneysider was the size of the block. It was 450 acres, making it as big as the whole country of Monaco! This was the biggest piece of land that I’d ever come across.
Finding lenders who would consider a property of this size was the biggest hurdle. Most lenders are limited to 100–150 acres. When I mentioned it was a big block, they said, “Yes, we do that,” but when I told them how big, they didn’t want to touch it. The clients also wanted to keep their current property, so servicing was quite tight. It meant using things like the gearing on the investment property and the rent received on that property. It wasn’t quite residential, it wasn’t quite a working farm, so we were caught somewhere in between.
The clients had already fallen in love with the block and location, and after visiting post-settlement, I could see why. When you are on the land, you’re completely isolated; however, it is only a 20-minute drive from the beach and major shopping centres in Merimbula. They gave me a full tour of the property, showing me where they planned to build their home, roads and dams.
We ran the scenario by numerous lenders who would give us limited commitment. One lender advised they had no restrictions on land size, so it fit their policy. We submitted the loan as it was a competitive product. The property was valued and the assessor stated that while they had no restrictions on land size, they had no appetite for this block. I had to be the bearer of bad news and advise my clients that the lender would not consider it.
We then spoke to a specialist at ANZ who worked near the location and had a good understanding of the area. She had insight from doing these deals previously, so she was able to give great advice on how to position the file. She was fantastic in working out a solution, but we still needed to push to get the structure and set-up we were after. Through plenty of negotiation back and forth we finally got all conditions removed and the loan was formally approved. The deal went to settlement six weeks later.
Having a regional expert at the bank was critical. Talking to someone who understood the area, where the block was, what it looked like, what it could and couldn’t be used for helped get the deal across the line.
What made it memorable for me as a Sydneysider was the size of the block. It was 450 acres, making it as big as the whole country of Monaco!
This was certainly an interesting deal. That’s the beauty of the job; you never know what scenarios you’re going to come across. Regardless of how long you’ve been doing it, there’s always going to be something that comes across the table that you haven’t seen before.
This experience highlighted the fact that behind every transaction there is a dream and a goal. The outcome of this deal would determine where their lives went. Going onto the land with them and being shown around made it very real. I felt, due to the clients’ passion for this transaction and their attachment to the land, that a solution had to be found; it made me even more persistent to find a solution.
My advice to other brokers in this position is to always be conscious that they play an important role in their clients’ lives. If you can be their trusted adviser, referrals and future business will naturally follow.
Director at Birdie Wealth