1 Minute Review
FarmFundr is a crowdfunding investment platform that specializes in pooling investor funds for farmland. Its initial projects are based in California. In a unique move for crowdfunding sites, it invites investors to physically visit properties.
FarmFundr has the advantage of brokering through a Securities and Exchange Commission (SEC) registered broker-dealer, ensuring that investments meet a minimum level of scrutiny. To pass due diligence, investors must also be accredited. The company advertises high returns and also gives away a box of the farm’s products to each investor every year.
- California residents
- Investors wanting to be fully-managed
- Broker vetted with the SEC
- Founder has substantial experience in the farming industry
- Investors get personal attention and easy access to locations
- Limited selection of investments
- Relatively high investment minimums
- Relatively slow cash flow
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Why FarmFundr Brokerage Over Others?
FarmFundr does offer some unique features in the agricultural crowdfunding space. But are these reasons enough to choose FarmFundr over its competitors? Let’s take a look at why you might choose this platform over others.
- Properly accredited. The initial purpose of crowdfunding was to get around strict SEC regulation. The fact FarmFundr passes muster with the SEC bodes well for its viability.
- Professionally managed. All 3 properties have an experienced agriculture management team behind them.
- Local to California. FarmFundr has only 3 offerings at the time of this writing. However, those offerings are in California close to the founder, a 4th generation farmer. Slow growth may actually work in this platform’s favor if it uses its proximity to build a solid following through consistent returns.
- Personal attention. Other crowdfunding platforms certainly don’t go out of their way to invite investors to the properties like FarmFundr. It’s always a plus to see firsthand what you are investing in and speaks well for the company’s transparency.
- Skin in the game. The company takes an equity stake with investors. This can be a double-edged sword, because investors end up giving up more money than they would just paying fixed fees up front. On the surface, it works well — kind of like the “free shipping” ad on products that already have the shipping costs rolled into the price of the item. However, it keeps the company honest.
Brokerage Quick Summary
Farmland continues to be a consistent and high performing asset class that does well regardless of the movements of the stock market. FarmFundr’s advertised returns range within the 10 to 13% annual returns that the farmland industry produced over the past 30 years.
With the pandemic creating volatility in the stock market, many investors are looking for safe havens. Gold recently hit all-time highs, and the cryptocurrency market is booming. But farmland is still the most consistent safehaven of the modern era.
The correlation between farmland and stocks is basically non existent, so agri investors tend to sleep easier at night regardless of the news cycle. Even when the yield on a farm does not meet expectations, the appreciation on the land itself helps to cushion investors from big losses.
FarmFundr’s minimum investment is $10,000, and the holding period is often illiquid. You’ll pay no direct management fees because FarmFundr takes an equity stake in its locations. The 3 projects include California Almond Orchard, California Pistachio Development and Row Crop Farm.
You must be an accredited investor in order to work with FarmFundr. Investing on margin is not an option. The following is the minimum standard to meet accreditation:
- Your annual income is no less than $200,000 for the previous 2 years as an individual or $300,000 if married.
- You expect your income will meet the minimum threshold for the foreseeable future.
- Your net worth is at least $1 million, not counting your primary residence.
Accredited investors may also include banks, trusts, business investment companies, employee benefit plans, insurance companies, registered investment advisors or charitable organizations. Net worth standards are higher if not investing as an individual.
If you are a high-net-worth individual (HNWI) who meets minimum accreditation standards and has an interest in California farmland, FarmFundr is your platform. Because the company has taken pains to legitimize itself through the SEC and investment personalization, you might assume that the company has plans for growth should its initial offerings prove successful.
At the same time, investors must realize they are coming into a ground-level operation. The management teams certainly seem professionally established, and FarmFundr’s CEO currently manages $100 million in real estate assets.
However, it is obvious to tell the website is in its 1st stages of development, and the operation is not proven as a public-facing company. At the time of this writing, there was not much on the individual investments except a note the California Almond Orchard was 75% funded.
- Projections. FarmFundr is at least upfront about what it plans to earn for its investors. Each featured investment has a “projected IRR” and a minimum investment requirement.
- Easily-navigated platform. There is not much in the way of information, but the site is intuitive. The basics are all there — information about the management team, introductions on the investments and a FAQ for all of your common questions.
- Simple signup. It ‘s relatively easy to begin your relationship with FarmFundr. Just create a password and enter your email, and you are in.
What FarmFundr lacks in personal information, it makes up for in general farmland education information. The “Why Farmland” navigation tab, which is also available as a downloadable PDF, will give any new investor a good crash course on what investing in farmland entails.
There is also a blog, which is sparse but well-written. If you dig around on the Internet or visit the Farmfundr Linktree, you’ll also find a few other podcast pieces from the founder speaking or writing about farmland in general. If you want more information about the individual investments, you have to sign up on the site. Here’s our quick take on the main pages:
- Guide to Investing in Farmland. This page is a good introduction to the benefits and risks of direct investment in agriculture. There is definitely a bias towards investing, and the risk section is a bit short.
- Blog. The articles on the blog are well-written and informative, but perhaps not enough to see anyone is committed to the site.
- FAQ. The FAQ is somewhat generic and repeats information that is found in other places on the site. There are some important tidbits about taxes and IRAs that you may find informative.
You can get in touch with FarmFundr through the following methods:
- Online chat. There is an online chat powered by tawk.to. I received an answer fairly quickly when I asked to receive more information about the almond farm.
- Online form. The site maintains a simple online query form.
- Phone. The FarmFundr contact number is 559-380-5492.
- Mailing address. The company’s mailing address is 14345 Houston Ave., Hanford, CA 93230.
FarmFundr has only 3 offerings as of this writing:
- California Almond Orchard. The California Almond Orchard is located in Lemoore, California. It has a minimum investment of $15,000 with a target IRR of 13.30%.
- California Pistachio Development. The California Pistachio Development is located in California. It has a minimum investment of $10,000 with a target IRR range of 8 to 15%.
- Row Crop Farm. The Row Crop Farm is located in California. It has a minimum investment of $10,000 with a target IRR range of 6 to 10%.
FarmFundr Stocks, ETFs and Mutual Funds
If you want to invest larger amounts of money than the stated minimums, FarmFundr provides customized options that invest through vehicles including an IRA, 1031 exchange or 401(k).
FarmFundr does not have a mobile app, but the site is workable on mobile devices.
FarmFundr gives much less upfront information about its investments compared to competitors. It also has relatively few investment choices. The California Pistachio Development and the Row Crop Farm are listed as “coming soon” on the website. You can get more information after you sign up, but this seems like a step too far for a company that people outside of California may not have heard of.
On the surface, everything looks to be valid. SEC accreditation certainly speaks well for the company’s due diligence. The management team seems to have the appropriate experience and the website is clear and professional.
FarmFundr has the potential to expand to a wider audience, and it may be a crowdfunding opportunity to join now or watch for the future.