FarmTogether is a real estate investing platform offering income-producing shares in US farmland. Investors earn money two ways: quarterly cash rent payments from farmers plus a return on the long-term appreciation of the land when it’s sold. The FarmTogether website is outstanding, and their investor education material is extensive and easy to find. Minimums are high and selection is limited, but may be worth a look for investors interested in agricultural and farmland as an asset class.
- Website: https://farmtogether.com/
- Investment Types: Real Estate
- Sectors: Agriculture, Agricultural Real Estate, and Commercial Real Estate
- Minimum Investment: 10000
- Advertised Returns: 9-14%
- Must be accredited
- Mix of income and appreciation
- Excellent website and investor education material
- Quarterly cash flow payments
- Currently only open to accredited investors
- Relatively short track record (first offering in 2019)
- High minimum investment
Founded in 2017, FarmTogether is a relatively new entrant to the real estate investment crowdfunding ecosystem. In an increasingly crowded landscape, platforms need something unique to stand out, and FarmTogether is joining what is definitely a novel niche – equity investments in farmland. They currently only offer Reg D investments to accredited investments in US farmland.
You can invest in FarmTogether using a Self-Directed IRA or 401(k) like the ones offered by our friends at Rocket Dollar.
Types of investments FarmTogether offers
Currently FarmTogether offers only one type of investment: US farmland. Investors buy fractional interests in income-producing farmland (the income is from the rent farmers pay for use of the land), and benefit from any appreciation in the land. Target hold periods vary by investment, but ranges from 5-10 years for currently active investment opportunities as of the time of this writing.
What do you get when investing with FarmTogether?
When you invest through FarmTogether, as with many crowdfunding investment platforms, what you actually receive is a membership interest in an LLC created specifically for the investment. That entity in turn is what actually holds title to the property.
FarmTogether fee structure
FarmTogether charges a fee of 1% of the initial investment amount and then an additional 1% annual management fee. Note also that FarmTogether operates a subsidiary (FarmTogether Management, LLC) which is paid to manage the property (typically by subcontracting). Investors should review the specifics of an offering to be sure they understand any and all fees involved.
Potential returns and cashflow
Projected returns vary by investment, but the company says investors can expect returns of 9-14%. Some of that comes from quarterly rental payments, with the remainder coming from projected appreciation at the time of sale. It’s worth noting that FarmTogether reports plans to offer investors a secondary market for early liquidity.
Breadth of offerings on FarmTogether
As of this writing, there is only one “regular” active investment opportunity offered by FarmTogether. There are two additional offerings, though one is for an entire farm, and the other is listed as a “Partner Deal” seeking funding for “one yet undetermined property”.
Regulatory framework and due diligence expectations
FarmTogether does not list any affiliation with a broker-dealer. Projects to date have been offered under SEC Reg D, and so are limited to accredited investors. Given the absence of a broker-dealer, it would be nice if FarmTogether shared more details about their due diligence process and criteria beyond just “We are committed to offering only investments that meet our stringent criteria.”
You may be able to invest in FarmTogether using a Self-Directed IRA or 401K. To learn more about using a Self-Directed retirement account for alternative investments, visit our friends at Rocket Dollar.
Selected Offerings from FarmTogether Beta
The structure of this deal is buying a lease from one of the largest hazelnut growers in North America. This farm is a 120-acre hazelnut orchard that was planted in the fall of 2019. The variety planted is called PollyO and is a next-generation variety developed by Oregon State University to be disease-resistant and highly productive.
Target Return: 10.0%More at FarmTogether
FarmTogether in the news
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