Case Study

Question 1

What was the estimated value of repairs/modernisations you refer to?

Answer 1

Quotes had not been obtained because my client was planning to do the work himself in order to save money, but based on general market costs it was estimated that bare minimum cost would be in the region of £25k-£35k, however the extent of the investment made was going to be reflected in the capital he had available

Question 2

What time period was your client looking to re-let the yard?

Answer 2

My client had not advised on a specfic time frame, but I deduced that sooner was better in order to re-gain the monthly income he has previously been receiving.

Question 3

What rental did you advise your client they could achieve in its current condition?

Answer 3

I advised the client could expect between £1,500-£2,000 pcm

Question 4

What rental did you advise your Client they could achieve after investing in improvements?

Answer 4

£2,500-£3,000 but dependent on the tenants business plan

Question 5

Opt 1 You allunded to a return that was marginally higher than no support - what was the return compared to the current margin with support and without support?

Answer 5

With no support whatsoever his gross margin was circa £/ac with additional

Question 6

What durations were the SFI and CSS options for?

Answer 6

CSS - 5 Years
SFI - 3 Years

Question 7

How would opt 1 meet your client objectives?

Answer 7

1) Didn’t require investment
2) Didn’t increase clients loan/borrowing amounts
3) Didn’t raise sufficient amounts of capital and hence why I didn’t advise he choose this option on these specific objectives however did advise that agri-enviro schemes should be looked at more broadly across the farm

Question 8

Opt 2 -
What advice did you give in relation to trends in FBT terms, in light of the change in support?

Answer 8

Common terms of 3/5 years given the SFI/CSS scheme period. However given this would affect the VP abilities I advised against a period longer than 2 yrs.

Question 9

Would Opt 2 generate more, or less gross profit than Opt 1?

Answer 9

Option 1 would generate approximately £1,992 in GP where as letting would generate estimated £1,315 GP therefore OPT 1 higher GP.

Question 10

How would option2 have met your Clients objectives?

Answer 10

• Doesn’t increase loan/borrowing
• Doesn’t require investment
• Would help with capital but still doesn’t raise enough money and in a realistic time frame.

Question 11

Opt 3- Were there any features of note (other than location) that made the Property more saleable?

Answer 11

• topography - flat, square
• good roadside access

Question 12

What advice did you give in relation to the location of the property and impact on value?

Answer 12

good roadnetwork for travelling farmers
-bordered with multiple different farmers

Question 13

What advice did you give in respect of the impact on value?

Answer 13

2 x footpaths running peprendicular to each other would reduce value as no yield
Woodland edge reduced yield = lower value
no electricty/water

Question 14

Did you consider any short-term, high return options such as camping, or event hire to raise some capital in the short term without having to dispose of the asset?

Answer 14

Yes but I ruled this out at very early stages, multiple factors affected the clients abilitity to have an opportunity like this included cropping, access, parcel size and the invesment in infrastructrue/time and management of such a project broke his objective of avoiding any investment

Question 15

What terms of overage did you recommend?

Answer 15

25-30 year term on a 25-30% clawback. for all non-agricultural development

Question 16

What impact did you advise a lack of Overage would have on value/saleability?

Answer 16

Saleability wise - opened the property up to a wider range of buyers (perhaps developers etc)
Value wise - potential for increase in value

Question 17

What was the rationale for the makreting strategy you used?

Answer 17

I went for a mixed approach using online standard marketing techniques such as property portals, social media & company website to increase visibility and exposure, particularly for investors I also used organic more personal techniques including posting particulars out to our mailing list to identified prospective interested parties and advertisement in our machinery auction catalogue. This ensured exposure to local farmers etc in a bid to generate.

Question 18

Whay would you do differently if you were to undertake the project again?

Answer 18

Attempt to gain a better insight as to my clients time frame and capital requirements. My client was relatively relaxed on this point which made providing options difficult.

Question 19

Could you talk through a professional and ethical standard you examplified through this instruction?

Answer 19

I provided a good quality, diligent service by communication effectively in both written and oral form the options available. I provided a diligent service providing detailed analysis to my client on a variety of options.

Question 20

You refer to discrepancies in the auction conditions, what were they and how did you remediate them?

Answer 20

During review of the collectice auction catalogue I noticed that the Common auction conditions editions were mis-quoted as edition 3 and edition 4, I confirmed with the head of auction to confirm which edition we used (4) and ensured our marketing team ammended the brochure

Question 21

What is the difference between edition 3 and 4 of the common auction conditions?

Answer 21

particulars and sale conditions may change before the auction with edition 4

Question 22

What were your key achievements?

Answer 22

Providing advise that lead to fulfilling the clients objectives in full.

successful sale over the guide price

Question 23

What would you do differently next time?

Answer 23

I would try to ascertaince more details regarding my clients objectives, whilst I had an rough estimate of costs, my client was unsure how much he wanted to invest. If i had got a more direct answer on this I may have been able to tailor my advice better

Question 24

How did you act ethically?

Answer 24

AML checks
Regularly checked for conflicts of interest
I ensured my communication was respectful given the nature of the topic and financial situation of the client.