- Real Estate
FarmFundr Review
FarmFundr is a California-based real estate investment crowdfunding platform offering equity investments in farmland and agricultural facilities. Minimums are high and selection is limited, but may be worth a look for investors interested in agricultural and farmland as an asset class.
FarmFundr
- Founded: 2015
- Investment Types: Real Estate
- Sectors: Agricultural Real Estate, Agriculture, and Commercial Real Estate
- Minimum Investment: $10,000
- Advertised Returns: 13-15%
- Must be accredited
Pros
- Mix of income and appreciation
- Founder with substantial farming and agriculture experience
- Investors receive an annual box of the products grown on their land
Cons
- Relatively high minimum investments
- Limited selection as of this writing
- Cash-flow payments are annual
- Only open to accredited investors
Overview
This FarmFundr Review will help you learn more about FarmFundr's investment offerings, including how the alternative investments on FarmFundr are structured, and what your potential returns might be. You can read more about the criteria we use to review investment platforms here.
FarmFundr was founded in 2015 in the Fresno valley area of Californiad by a fourth-generation farmer, Brandon Silveira. Their three initial offerings carry no debt, and are fully managed by an in-house agriculture management group.
Types of investments FarmFundr offers
FarmFundr offers investments in US Farmland. Part of the return comes from annual income produced by the farmland, as well as any appreciation in the land when it’s sold (hold times are between 12 months and 7 years according to FarmFundr). In what is likely a first for a real estate crowdfunding platform, FarmFundr says they invite investors to “spend a weekend with us, in one of our ranch houses”.
What do you get when investing with FarmFundr?
When you invest through , as with many real estate crowdfunding investment platforms, what you actually receive is a membership interest in what’s known as a special purpose entity, typically an LLC created specifically for the investment. The LLC in turn is what actually holds the equity, preferred equity, or debt interest in the property. For each investment you make with , you’ll receive a separate K1 at tax time to report your share of the income received by the LLC.
When you invest through , as with many real estate crowdfunding investment platforms, what you actually receive is a membership interest in what’s known as a special purpose entity, typically an LLC created specifically for the investment. The LLC in turn is what actually holds title to the property. For each investment you make with , you’ll receive a separate K1 at tax time to report your share of the income received by the LLC.
Potential returns and cashflow
FarmFundr says returns on their farmland investments are expected to be 13-15%, with a portion of that paid annually from the proceeds of crop sales and the remainder coming when the property is sold or refinanced.
Breadth of offerings on FarmFundr
As of this writing, there are 3 open projects listed on the FarmFundr site, all located in California.
Regulatory framework
FarmFundr has a contractual affiliation with North Capital Private Securities, a Broker-Dealer registered with the SEC (you can see their entry in FINRA’s Broker Check service here). That means that when you invest with FarmFundr, the security you are technically purchasing is via North Capital. Broker-dealers are subject to specific due-diligence requirements to ensure an investment is “suitable” for their registered customers, or they can face fines and civil action. (That does not of course provide any guarantees about investment return or performance!)
So while a broker-dealer platform (or one that has a contractual affiliation with the one, the way FarmFundr works with North Capital) will typically disclaim that they do not offer formal financial advice (even though they are entitled to), you can still expect that the investments they offer have been thoroughly screened, including thing like criminal background checks on key executives and a detailed review of financial statements. You should of course do your own due diligence (including research outside of what you find on the platform.) There’s more about broker-dealers and other platform types over on our blog.
This review was first published on 24 March 2017, and last updated on 18 June 2019.
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