FarmTogether is a crowdfunding platform where accredited investors can invest in U.S. farmland. Read on to learn about the investment platform in this FarmTogether review. Invest in farmland easily through real estate crowdfunding and see what all the hype is about.
FarmTogether Review: Overview
FarmTogether is an investing platform that helps accredited investors invest in farmland. The agricultural real estate investments on the platform are for long-term investments. This means that they will likely last a minimum of 5 years.
In order to use the platform, you must be an accredited investor. However, the platform may open up some opportunities to non-accredited investors in the future.
Investors who use FarmTogether are investing in an operating farm by buying a stake in the farm itself.
FarmTogether also offers a range of educational information for investors interested in investing in farmland or agricultural real estate.
FarmTogether Review: What Is FarmTogether?
As discussed, FarmTogether is a real estate crowdfunding platform that allows accredited investors to diversify their investments by investing in farmland. Through the FarmTogether platform, investors have access to institutional quality farmland investments.
FarmTogether gives investors a single platform to browse investments, review materials on due diligence, as well as sign legal documents in a secure online setting. For those looking for an alternative real estate investment, FarmTogether may offer just what you are looking for.
FarmTogether makes it easy for investors interested in farmland or commercial real estate to invest without having to do their own due diligence or farm management. When you invest with them, you will be investing alongside other investors on agricultural real estate offerings.
The platform does not operate as a REIT, however. With the platform, investors choose the location of the farms as well as the type of crop the farms produce.
Who is the FarmTogether team?
The FarmTogether team is comprised of a group of professionals who have experience in farmland management as well as technology and finance. Collectively, the team has over 70 years of experience across farmland investing, the U.S. and global real estate, and agriculture.
FarmTogether Review: How Does FarmTogether Work?
FarmTogether works by connecting investors with investment opportunities that use farmland as an asset. When you invest in farmland with FarmTogether, you are investing more in the land than the actual farm itself.
Although investors can choose the type of crop grown and the farm’s location, profits and cash yield will not be based on how well the farm does as a business. Instead, income is generated from rent payments on the farmland.
FarmTogether seeks out investment opportunities, then vets them to determine if the combination of the crop, the overall valuation of the farms, and capabilities of the operator meet their standards.
FarmTogether also attempts to identify investment opportunities that can raise the farm’s value. These include carbon-reducing or organic practices, as well as other investments that improve upon the infrastructure of the working farm.
Once a deal closes and is funded, you will receive cash yield from the money and cash flow earned by the farm. You can also make money via appreciation of the land.
How do I See Returns When I Invest in Farmland?
Annual returns are based on land appreciation and farm rent. The farm rent works as a type of dividend payment in which you will see passive income on an annual, or sometimes even quarterly basis.
While investors will see a payout if the farm sells, selling the farm is really not the platform’s goal. Instead, it is meant to be a long-term investment with a hold period of at least five, but ideally seven or ten years. With that said, if a farm does get sold, the investor will receive capital gains
By investing in a FarmTogether deal, you’re investing in an LLC. The LLC holds a title to the agricultural property itself. This means that the beneficiaries of the land are the investors who put in money.
Typically, a property available on FarmTogether will be rented out and operated by a large agricultural operator instead of just a local farmer. This makes each offering a bit more stable.
Is Investing in Farmland a Good Idea?
Farmland investing could be a good idea for an accredited investor. This type of real estate investment can be good for the diversification of your portfolio. It may also reduce volatility while still producing returns.
If you want to start investing in agriculture or real estate, FarmTogether’s platform may offer a good way to make money as opposed to doing so on the stock market through an investment like a REIT.
Farmland investments are proven to be a stable asset class. This is due to the fact that food production rises as the population increases, making farmland much sought after. Compared to other asset classes, farmland has produced overall better returns than investments in stocks, bonds, precious metals, and other real estate asset classes.
Investing in farmland is one investment opportunity that can produce a healthy return for years to come.
FarmTogether Review: What’s Included with FarmTogether?
When you invest in FarmTogether, you will have access to a few features. These include:
- Farmland Investing Options
- FarmTogether Updates
- FarmTogether Tax and Valuation Management
- Diversified Fund Option
Let’s take a look at each one in more detail.
Farmland Investing Options
Farmland offers two types of investing options. These include crowdfunded farmland options and sole ownership bespoke offerings.
The crowdfunded option includes:
- Investment offerings for accredited investors with low minimum investments starting at $15,000.
- Utilization of leverage to improve the return on offerings.
- A hold period starting at as little as five years with annual liquidity windows for earlier exits.
- Simple and low fees.
The sole ownership bespoke option includes:
- Farmland that is sourced for individual investors wanting sole ownership who are willing to invest $1 million plus in equity.
- A legal, tax, and capital structure that is fully customizable.
- Hold periods, cash yield profiles, and risk-return profiles that are at the investor’s discretion.
- 1031 Exchanges eligibility.
- Custom fees that are in alignment with each deal’s structure.
FarmTogether supports investments made through self-directed IRAs, individual entities, solo 401k accounts, LLCs, corporations, and other investment vehicles.
The platform provides regular updates on your investments. These include key performance indicators on productivity, as well as photos and videos of the farm you are an investor in.
FarmTogether Tax and Valuation Management
FarmTogether manages each farmland investment and lease payments as well as property taxes, insurance, and other expenses the landowner is liable for. The investor receives cash distributions from the net profits of the farm.
Diversified Fund Option
FarmTogether also offers each investor the option to participate in a diversified fund. While there is not much information available, it seems this option can help with portfolio diversification.
FarmTogether Review: Is FarmTogether Legit?
FarmTogether is a legitimate alternative investment. For those looking to diversify their portfolio outside of the stock market, a crowdfunding platform can be a good way of investing.
Since the company is relatively new, it does not have a very long track record. However, FarmTogether claims that investing in U.S. farmland could produce solid annual returns. Investors make money through land appreciation and cash distributions.
Some of their closed deals have had a target net IRR (initial rate of return) of up to 15%.
For those looking for a way to make passive income through agriculture or real estate investments, FarmTogether offers a legitimate way to diversify your portfolio and get into the world of real estate investment.
FarmTogether Review: How Much Does FarmTogether Cost?
While there are no membership tiers for the FarmTogether platform, there is a minimum investment of $15,000. The initial investment is quite high. However, when it comes to real estate investing, most investments require a somewhat large investment to begin with.
In addition to the minimum investment, FarmTogether charges investors two fees. These fees are in the form of a one-time, upfront expenses reimbursement fee and an annual management fee. While these fees can range in price, they are generally around 2% for the upfront fee and 1-1.5% for the annual management fee.
There may also be some other fees involved with partner deals. For example, one deal includes a 10% share of profits once the farm is sold. For this reason, it is important to research every investment thoroughly so you are aware of any additional fees that might come along with your investment.
FarmTogether Review: FarmTogether Cancellation Policy
Since there are no fees, except for when a deal closes, or you invest, there is no need for a cancellation policy.
If you have no open investments and wish to close your FarmTogether account, you can do so by simply reaching out to the FarmTogether team via email at firstname.lastname@example.org.
Once you fund an investment, it is likely that you will have to sign a contract, meaning you cannot withdraw your investment early. However, this may vary from deal to deal.
In addition, FarmTogether is in the process of building a secondary market for all deals, introducing liquidity options for investors. They’ve already launched their first secondary market and it was a success with the first deal, El Nido Almond Orchard. However, it is still best to research the terms of each deal thoroughly before making an investment via the platform.
FarmTogether Review: Pros and Cons
FarmTogether has both pros and cons for those who wish to invest with the platform. Let’s take a look at them now.
- Easy to open an account
- A unique asset class with a profitable returns profile
- Low investment minimum for this type of asset class
- A diversified fund option
- Easy to use investment platform
- Lower fees than the industry average
- Must be an accredited investor
- Investments are for the long term
- Limited track record as a newer company
Is FarmTogether Right for Me?
If you want to start investing in commercial real estate, farmland, or agricultural properties, then FarmTogether may be a good option for you.
Investing in farmland is just one way to diversify your portfolio while receiving passive income from farm rents. If you are okay with making a long-term investment, then the platform may have something to offer you.
Each deal is unique, so there is plenty to choose from. Each investment has different offerings, making investing with FarmTogether an interesting investment opportunity.
However, if you are not an accredited investor, unfortunately, you cannot currently invest with FarmTogether.
FarmTogether Reviews by Investors
Since the platform is fairly new, there are no reviews from investors available online. However, other companies who have rated the platform tend to rate it quite highly. Many professional reviews gave FarmTogether a rating of at least 3.5 stars, with some even rating it at 4 stars.
The platform does offer a unique investment opportunity, and target net IRR is good for most deals. Investors make money off of appreciation of the land and cash flow from the farm itself, making FarmTogether’s platform an interesting way to invest in a unique asset class.
Final Review: Is FarmTogether Worth It?
FarmTogether could be a great investment opportunity for accredited investors looking to generate income through investment in farmland. The platform brings deals straight to the investor and vets each deal thoroughly to give investors the best possible chance of generating income from their investment.
The fees associated with the platform are lower than the industry average, making FarmTogether a good way to invest in farmland at a low cost. Additionally, the minimum investment is smaller than what is needed for similar investments.
Money is made both from the cash flow of the working farm, lease payments, and land appreciation. For those looking to get into real estate investing, FarmTogether’s platform offers a very unique way to do just that.
Unfortunately, the platform is only open to accredited investors for the time being.
In all, FarmTogether appears to be a good choice for investing in farmland. The platform is well laid out, easy to use, and offers deals that will help diversify a portfolio and generate positive returns. For accredited investors interested in making money from farmland or agricultural investments, FarmTogether may be a solid bet.