Real estate is a popular technique to diversify one’s financial portfolio while also earning passive income. While most people associate real estate with commercial buildings, apartments, or single-family houses, various real estate assets benefit from the ground beneath our feet.
One of the most important real estate assets is farmland in the United States, which supplies food for communities. While most people will never purchase a whole farm, FarmTogether is an investing platform that allows you to acquire fractional shares of farms, orchards, and other rural properties.
This review will go over FarmTogether to see if it really is the best farmland investing platform out there.
You’ll learn whether farmland investing is the right online business for you.
And at the end, you’ll find answers some of the most frequently asked questions regarding FarmTogether and farmland investing in general.
But most importantly, you’ll see the exact system many others have used to build their own internet marketing business to over $40,000 a month in mostly passive income.
This system made them swear off farmland investing for good, because it uses some of the same skills but in a much more powerful and profitable way!
FarmTogether, founded in 2017, is an investing platform that allows accredited investors to invest in farmland in the United States. Their objective is to democratize farmland investing through the use of a crowdfunding approach in agriculture.
The platform is managed by a group of experts with decades of combined experience in food, agricultural, and farmland investing. Artem Milinchuk, the company’s CEO, was previously the VP of Operations for Full Harvest Technologies, a B2B platform for purchasing and selling surplus produce.
FarmTogether was started in San Francisco by a team of four people, including the current CEO. According to Crunchbase, they have $3.7 million in venture capital funding.
The FarmTogether platform operates in the same way as other forms of real estate crowdfunding. Here’s how they do it:
Their team identifies possible farmland sites in the United States that require finance.
If the property fulfills their investment criteria (for example, crop kind, property location and valuation, the operator’s experience and ability), they will negotiate the arrangements and offer it on their marketplace.
Then, investors can go through the available properties and their investment profiles (such as target IRR, holding period, cash yield, and how much capital investors have already committed to the deal).
The required minimums begin at $15,000. Depending on the size of your allocation, this is usually low enough to allow you to diversify among a few different properties.
FarmTogether and their contractual partners handle day-to-day crop maintenance and harvest sales after you invest.
Returns are earned in three ways:
Individual and corporate accounts, self-directed IRAs, and 401(k) accounts are all supported by the FarmTogether platform.
To become an investor in FarmTogether, you must meet specific criteria. These rules ensure that the investors are financially secure and have a failsafe in place.
You must be the following to invest in FarmTogether properties:
Signing up for the FarmTogether platform is entirely free. You’ll not be charged any fees until you make an investment. These fees differ and are specific to each property. In general, the following FarmTogether fees should be expected:
However, it is critical to thoroughly examine the offering documentation because each deal has its own fee structure, and some may even incorporate profit sharing for the managers.
There isn’t such thing as a risk-free investment, but farmland has a very appealing risk/reward profile and serves as a wonderful diversifier for a well-balanced investment portfolio of stocks and bonds.
Farmland is, according to their website:
The FarmTogether platform’s fees are also quite low when compared to other private investments. Furthermore, because people will always need to eat, there is minimal likelihood of a major, ongoing decline in farmland values.
FarmTogether has a favorable risk/reward profile.
Minimum initial investment. On the low end, $15,000, but it might go as high as $50,000 or more depending on the exact investment.
Investment term. It could be as short as five years, but it’s more likely to be seven to ten years. Particular investments may take even longer.
Net rent distribution frequency. Rent payments might be made quarterly, semi-annually, or annually, depending on the investment.
Eligible investors. You can invest as an individual, a limited partnership (LP), a limited liability company (LLC), or a trust. Investors may be US citizens, permanent residents, or foreign nationals.
Eligible accounts. Investment accounts that are taxable, yet can be held in a self-directed IRA account. FarmTogether collaborates with Alto IRA on this project.
Distributions of income. Rent payments might be received quarterly, semi-annually, or annually. Distributions, like annual income, are placed directly into a linked bank account.
Year-end tax reporting. Individual investments structured as LLCs will have year-end results reported on IRS Form K-1. This includes rental income and expenses, which are taxable each year. When the property is sold, any gains will be taxed at lower long-term capital gains rates.
Fees for FarmTogether. The particular fee structure will differ depending on the investment offered. On average, you should anticipate paying an “intake charge” of 0.5 percent to 1.0 percent of your initial investment. You should also anticipate paying an annual management charge, normally roughly 1% of your investment value. However, no fees are levied on the selling of the underlying farmland.
Customer support. Because you’ll need to plan a call, phone interaction is limited. And because the company is headquartered on the West Coast, time zone differences must be considered. The lack of phone contact is common in the real estate crowdfunding industry.
When you invest in FarmTogether, you hold a stake in the farm itself via a separate legal organization (usually an LLC) rather than stock in FarmTogether itself. That is, if FarmTogether runs into financial difficulties or becomes insolvent, your farmland assets are not jeopardized. Furthermore, because FarmTogether is not a farm operator, any disruption in its operations would have no direct influence on any of the farms in which you invest.
However, because FarmTogether acts as the asset manager, there will most likely be some disruption—albeit temporary—to a few things for investors, such as access to reporting or documentation, distribution payment, or communications with the farm operator, because FarmTogether plays a key role in managing those things. There are several safeguards in place to mitigate this damage, with each agreement containing a survivorship plan for continuous administration.
The most significant risk for investors in farmland real estate acquisitions is that the farm will not produce satisfactory results. This can be caused by many factors, such as:
Or, more frequently, a combination of the above. If a farm fails to generate predicted cash flows, investors may not receive the planned payouts due to bad luck or poor farm management.
In the worst-case situation, a farm may have to be sold off—potentially at a loss—if circumstances become bad enough. It’s unlikely to happen with well-vetted arrangements and qualified operators, but it does happen. In the worst-case situation, those losses might be compounded if there is debt involved.
What is the takeaway? Make sure you do your homework. Before you invest, understand the financials of any business and determine whether the risks fall within your own risk profile.
Having said that, there’s a lot to admire about FarmTogether and what it has to offer investors. Farmland is not an investment class that many people have had the opportunity to invest in, but its risk and return profile, as well as its future potential, should put it on your radar.
FarmTogether has a very special niche in the world of investing. FarmTogether offers a new and straightforward way to invest in agricultural real estate if you are interested in investing in farmland and match the platform’s strict investor profile standards. Before you can invest, you must also meet the minimum investment requirements.
It is critical to understand that FarmTogether is not a real estate investment trust (REIT). Furthermore, when you participate in FarmTogether, you are not investing in the platform as a whole; rather, you are investing in a specific agricultural opportunity. This means that your investment is illiquid, and you risk losing money if the farm goes bankrupt or fails to pay its lease obligations. Pests, terrible weather conditions, or simply bad luck could all occur – there are numerous reasons why your farm may fail to satisfy its financial commitments. This emphasizes the importance of thoroughly researching both the agricultural market and the crop in question before putting money up.
FarmTogether offers a one-of-a-kind opportunity to invest in farmland, as well as a wealth of educational tools and resources to help you make an informed decision.
Yes, you can through farmland investments! Accredited and non accredited investors, however, have other options.
There’s a lot that comes along with farmland investing that many people struggle with.
Now, don’t get the wrong idea…
It’s not impossible to make money with farmland investing, but if you’re gonna put in the amount of grueling work to do this business (which, trust us, isn’t easy), you might as well bring in some REAL money while you’re learning the ropes.
The program that helped skyrocket many online businesses to over $40,000+ per month is so simple that making money really does become second nature.
No. FarmTogether is a legit real estate crowdfunding platform and has a legitimate asset class.
It is entirely possible to build a profitable, successful farmland investing business… But there are better ways to build a business other than with farmland investing.
Because unlike FarmTogether, it actually provides real proof of real success from real people as recently as a few days ago.
While farmland may appear to be an unusual investment, FarmTogether is a legal corporation that provides real estate investing possibilities to certified investors. Investors can purchase a fractional or entire interest in a farming property to obtain a portion of the operating revenue and potential capital gains from a future sale.
FarmTogether collaborates with several well-known companies, including Equity Trust Company, PENSCO, and Leading Harvest, lending legitimacy to this relatively new startup.
Where this FarmTogether falls short is in scalability. Because in order to make a good amount of money with real estate, you have to own several different houses.
And who has that kind of capital to start?
But what if you went local?
With Local Lead Generation, you will be getting service requests from multiple sites at every minute of the day from people who are willing to pay a lot of money for what you can provide them.
I was watching a YouTube video once where the host made a comment that it isn’t about making a lot of money from one website… it’s about making a little bit of money from lots of different websites.
So, think of it this way….
What if you could have streams of investment income where you operated 10 rental units that you could charge anywhere from $750-1,000 per month?
That’s $7,500-10,000 per month in passive income!
What If You Invested Into 100 Rental Units?
But instead of spending $Millions to build houses or apartment complexes… you spend a couple hundred dollars to build websites.
You then get those websites ranked in the search engines for specific home-based services that customers are searching for.
Next, you offer your lead generation system to local business owners who are looking for customers and are willing to pay you for their information.
You’ve just created a Digital Real Estate Investment Empire that is potentially earning you 4-5 figures in PASSIVE INCOME on a monthly basis without spending a single dime on ads.
With conventional digital real estate, you have to compete with thousands, if not millions of others who are selling the SAME product to the SAME customers.
Once the training program is completed you will also have access to a Facebook group much better than the FarmTogether group in our opinion. This group is much more active.
Unlike FarmTogether, where you’re profiting maybe $250 per property, you could be getting 5-10X THAT.
With Local Lead Generation, the competition is virtually nothing and your profit margins are 85-90%.
Now, I could go on and on, but I’m sure you have tons of questions about how to create Digital Real Estate assets and start building YOUR digital empire!