Crowdfunding isn’t anything new – but if you’re interested in farmland investing specifically, then this FarmTogether review should pique your interest.
FarmTogether is a crowdfunding platform that specializes in agricultural real estate offerings – in other words, farmland investments. It’s a wonderful investment platform to consider if you want to work with other accredited investors to make some extra money on the side.
But is FarmTogether right for you – and how do you go about using the FarmTogether platform in the first place? In this FarmTogether review, we’ll discuss everything you need to know about this platform so you can make the final decision on whether or not it’s the right pick for your needs.
So, without anything further, let’s get down to business with this FarmTogether review!
What is FarmTogether?
FarmTogether is a real estate investment platform that was created by Artem Milinchuk, a man with more than a decade in farmland, agriculture, and finance.
As a FarmTogether investor, you will be buying a share in an operating farm. Generally, this is in fruit, nut, or citrus production or on row crop farms.
FarmTogether works to identify investment opportunities, then puts each one through a rigid vetting process to determine if the real estate investment will meet its standards. FarmTogether also identifies opportunities to invest in a farm specifically to improve its value – such as by adding more infrastructure or carbon-reducing practices.
Then, FarmTogether negotiates a deal with a seller and lists the offering on the FarmTogether platform. All relevant financial targets, the targeted hold period, and legal documents are placed here, too.
As soon as the deal is funded and closes, investors start earning a cash yield, which is paid from the farm’s cash flows during the ownership term.
How to Use FarmTogether
To get started with FarmTogether, you’ll begin by opening an account at farmtogether.com. You must be an accredited investor with an income of more than $200,000 or a net worth of more than $1 million.
You will need to make an initial investment that is a minimum of $15,000. There are several fees charged by this real estate platform, too.
You will be charged a one-time upfront expense reimbursement fee and an annual management fee.
The amounts for these depend on the asset class and other terms of the deal. Usually, they are around 1-2% each.
Is Owning Farmland a Good Investment?
For the last few decades, farmland has served as one of the best risk-adjusted investment classes in the country. It offers better returns than just about every other kind of asset, including stocks, bonds, precious metals, and even other types of real estate.
There’s always going to be a demand for food, so farmland is always going to be needed. Not only that, but as the global population increases so, too, does food demand – and the supply of available farmland is going down.
Farmland investing is a great way to increase your returns while reducing your volatility.
Is FarmTogether Legitimate and Safe?
FarmTogether is legit. To date, it has raised millions of dollars from a variety of angel and venture capital investors. It has closed a few farmland transactions since its formation, too.
FarmTogether’s website is secured with the same level of security you’d find at any other financial institution.
Despite not being open to all types of investors, FarmTogether is a real estate platform that is relatively easy to use. With a minimum initial investment required, it’s a smart way to dive into farmland investing.
But what if you run into problems while you’re navigating your investments?
FarmTogether does not have an app but it does have a website that is fully optimized for mobile. You can review and make investments, access your account, and pull up your investment portfolio from any device.
FarmTogether Pros and Cons
Here are some of the biggest benefits and disadvantages of using the FarmTogether platform.
Pro: Excellent Return Profile and a Variety of Investment Choices
FarmTogether offers a unique asset class with a truly phenomenal return profile. Despite being a young service, this investment platform has a solid track record of minimal losses and strong returns.
There are also all kinds of investments you can choose from, including permanent and row crop opportunities and even organic redevelopment options.
Pro: Management Really Knows What It’s Doing
Farmland can be a bit complicated, but you don’t have to have a background in agriculture to succeed with investing on FarmTogether. The management here has an excellent track record when it comes to agricultural finance particularly in areas like fruit and nut trees, grapes, and citrus.
It’s also worth noting that FarmTogether is repeatedly recognized for its socially responsible real estate endeavors. It works with companies like Indigo and Terraton to develop carbon-negative farm operations and it also partners with organizations like Leading Harvest.
Pro: Low Minimum Investment and Low Overall Fees
You don’t have to invest a ton of money in order to get started with farmland investing on FarmTogether. Although you do have to be an accredited investor in order to join, you only have to contribute a minimum investment of $15,000, which is a much lower minimum investment than what you’ll find on other real estate crowdfunding sites.
There are also low FarmTogether fees. When you invest in other types of real estate, such as commercial real estate projects, there are all kinds of complications that might get in the way. There are large construction budgets and high operating fees to contend with, for instance.
Farmland investing tends to be less complex because there are fewer variables like these thrown into the mix.
Con: Only Open to Accredited Investors
The biggest downside to using this real estate investing platform is that it is open to accredited investors only. This isn’t a platform that non-accredited investors can use to start building an investment portfolio or supplement their annual income – it is for serious accredited investors only.
You must be an accredited investor worth $1 million or more (excluding your primary residence) or somebody who earns more than $200,000 per year in order to sign up.
Con: A New Platform With Limited Track Record
Because FarmTogether is so new in the real estate investing game, it’s hard to definitively say in our FarmTogether review whether this is a platform that’s going to be around for the long haul. Since farmland investing is a long-term endeavor, it doesn’t really have the option to display any fully realized real estate deals.
Con: Use of Debt
FarmTogether has some real estate offerings that use debt to fund the projects. This can improve your returns but it can also up the risk – especially if the farm operations don’t generate adequate cash yield flows to service that debt.
FarmTogether Alternatives to Consider
There are many real estate investing platforms out there, from Motley Fool Millionacres to DiversyFund. But, when you’re looking for opportunities to invest in US farmland, there’s really only one other platform that offers an investment opportunity for agricultural real estate. That platform is AcreTrader.
AcreTrader is a platform that, like FarmTogether, also focuses exclusively on real estate investments in the agricultural sector.
It also accepts only accredited investors but may have the potential to be more attractive to FarmTogether investors since the minimum investment is only $10,000. This is much lower than the minimum FarmTogether investment of $15,000. The fees are lower, too, since it charges a 0.75% annual management fee.
That said, there’s no secondary market to sell positions early, which is an advantage that FarmTogether has. FarmTogether also has a more skilled management team.
Is FarmTogether Worth It?
So is FarmTogether legit – and is it worth it? Out of all the real estate crowdfunding platforms out there, FarmTogether is one of the few that taps into the advantageous farmland market, making it a great investment opportunity for accredited investors.
Although only accredited investors can use this platform, it’s a great way to build a more diversified portfolio and improve your net worth.
Invest with FarmTogether – and invest money wisely!