In our FarmFundr review, we’ll tell you why farmland is the next opportunity in our plan to diversify our portfolio. It started with a fun day dream and turned in to a smart investment opportunity.
Table of Contents
FarmFundr Review: Pros
- Invest directly into farmland with experienced farmers
- Two ways to profit – annual crop sales and land appreciation
- Smart way to diversify portfolio with uncorrelated asset
FarmFundr Review: Cons
- High minimum investments ($10k)
- Accredited investors only
- Limited number of deals available
Our family friend left his corporate job last year and purchased a farm. He plans to spend his retirement working the land, growing crops and enjoying the food grown from his very own efforts. For a moment, I got lost in the day dream. Spend the day working the land instead of a keyboard. Sustainably grown fruits and vegetables. Food picked when it is ripe so it has rich flavor, unlike so much of the produce we “enjoy” these days. Farm to table never sounded so good…
Curiosity piqued, I hopped online and asked Uncle Google to tell me more about purchasing a farm. You know, just for curiosity’s sake.
Well, suffice to say, two minutes of research squashed the day dream. It’s crazy expensive to acquire a working farm. Never mind the details of crop care, soil maintenance, and harvesting. There is a long list of responsibilities that go with managing a working farm.
But maybe it’s possible to live the dream with a “second best” option. Maybe invest in farmland with an experienced farm management team and let them do all the work!
What is FarmFundr?
FarmFundr is a real estate crowdfunding platform that allows investors to purchase fractional ownership in farmland. With FarmFundr, you invest directly in farms that produce crops. The farms are managed by FarmFundr or a highly qualified farmer hired to manage it on behalf of the investors.
Founder Brandon Silveira saw that farmland investing is not financially feasible for every day investors with those super high costs. So, in true entrepreneur style, he created the platform to make it easy for investors to enter the sector with less capital. Thanks for helping me get a little closer to that day dream, Brandon, and without actually having to do any farm work!
All kidding aside, Brandon Silveiera is no joke when it comes to farmland. He is a fourth generation farmer with a degree in agriculture from California Polytechnic University San Luis Obispo. He also has experience managing and farming a variety of crops. Furthermore, he has bought and sold millions in real estate and has a farm management company recognized by INC. Magazine as a fastest growing company. You know, all the things that you would want from a founder of a farmland real estate investing company. It doesn’t hurt that the rest of the team has relevant experience too – largely in farmland.
Why invest in FarmFundr?
FarmFunder offers two ways for accredited investors to invest in farms. One is to invest through the crowdfunding platform, with a minimum of $10k. The second way to is use the FarmFinder Program to create a custom farmland investment that aligns with your risk tolerance and investment goals. Investments can be made through 1031 exchange, solo 401k or IRAs.
Investors make money two ways. One, through crop profits and two, from the appreciation of land.
At the time of writing, FarmFundr has two opportunities listed on its site. One is a pistachio farm and the other is a row crop farm which is coming soon. After a quick sign-up you can review the offer details including investment timeline, financial projections and photos of the property.
FarmFundr specializes in California-based farms and their farmland investment opportunities are located there.
Is Farmland a good investment?
The population is only getting bigger. Combine that with the ongoing demand for quality food and a finite (and decreasing) supply of farmland and it is easy to see that farmland will only become more critical and valuable with time.
According to Forbes, US farmland has yielded returns over 10%, often outperforming other asset classes. It is inflation-resistant and uncorrelated to the stock market and other asset classes, making it a smart addition to a diversified portfolio strategy. Anyone reading this blog knows that is something we are always looking for at Money Minx.
Importantly, farmland is a real asset that will always preserve some amount of concrete, quantifiable worth. Think tangible product needed by every living person worldwide.
Basic economics says that decreasing farmland supply with increasing demand for food means increasing value of land. In other words, great investment opportunity.
I dont know anyone doing this. Why aren’t more people investing in Farmland?
I believe this is largely due to lack of awareness and access. This market often requires specialized knowledge to find and manage the land. That’s a pretty big barrier to entry. With FarmFundr, we can leverage the company’s agricultural knowledge and buy in to this asset class.
Is FarmFundr a legit company?
FarmFundr is a crowdfunding platform that offers individual investors the chance to invest in working farms under the management of experienced farmers and agricultural professionals without having to go out and till the soil.
In most of their offerings, the company takes an equity stake in the deal and only makes money if the investors do.
The team is easily accessible and quick to respond to questions. My husband contacted them via twitter with questions and heard back immediately. I emailed them and heard back the very next day.
What do I get when I invest with FarmFundr?
An LLC is created for each property listed on FarmFundr. As an investor, you own a share in the LLC.
What is the minimum FarmFundr investment?
The minimum investment on the FarmFundr portal is $10k. The company also offers a customized investment option for people interested in investing more than $300k.
How can I sell my FarmFundr investments?
FarmFundr investments are illiquid. There is no repurchase program or secondary market. Therefore, you’ll need to be comfortable with a holding period that from ranges from 5 – 15 years.
Why Invest in California farmland? Is it safe?
FarmFundr specializes in California properties.
The Golden State is the sweetheart of America’s agricultural space. Ideal climate and conditions make California the leading US state for cash farm receipts, making up over 13% of the country’s total agricultural value. Just last year, California farms got more than $50 billion in cash receipts for their production. Over 400 commodities are grown in California! Almonds and pistachios are in the top 10 commodities produced by the state – and FarmFundr has offered farmland investment opportunities focused on both crops. Read more about California’s production statistics at the California Department of Food and Agriculture here.
While CA is an agricultural superstar, most news on the state over the last year focused on the wild fires. That was the first thing I considered when thinking through this investment opportunity. Luckily, my question was answered in a speedy reply from FarmFundr.
FarmFundr operations are typically in the central valley of California, an area in the mountains that has not seen wild fire issues. FarmFundr properties are located in the farm rich areas of California, surrounded by irrigated crop lands which makes the spread of wildfire difficult. Like everyone else here in the sunshine state, fire risk is top of mind for FarmFundr and they consider this when choosing properties for their investors.
Is Farmland investing risky?
Like all investments, you should consider this as risky. You can lose some of all of your money. However, you can make money. Do your due diligence.
In conclusion, we think FarmFundr is a smart investment option for people interested in farmland or for those that want to try a crowdfunding platform.
As land becomes more scarce, a continually growing global population and consequent demand for food make farmland investing a smart investment opportunity. It’s proven to provide diversification and a hedge against less stable stock market performance.
Once our investment is complete, I’m going to request a tour of the farm and live that day dream, if only for a few hours.
To learn more about FarmFundr, check out their website.
To read about more investment opportunities that are uncorrelated to the stock market, check out nearly any article on the Money Minx blog.