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FarmTogether is an investmnet platform based in the US that caters primarily to investors who want to invest in US farmland. The platform works with small scale farmers to invest in their farmland. Although the platform was only launched in 2017, it has already built a name for itself as a top investment platform. However, only accredited investors are allowed to invest with the platform.
- 4 ways to invest – sole ownership from $1 million onwards, crowdfunded farmland offerings from $15,000, 1031 exchanges, and secondary markets.
- High returns on investments – enjoy an estimated absolute return rate of between 7% to 15% and average cash yield rate of from 3% to up to 9%.
- Highly selective process for investments – only 3% of all deals reviewed make it to the platform, ensuring that all deals available are top quality.
- Low risk compared to other investments – standard deviation for farmland investments is just 8.9% compared to 10.51% for traditional portfolios.
- Only accredited investors – you must have an annual income of at least $200,000 per year for the past two years or a net worth of over $1 million.
- High minimum investment – the minimum sum you must invest is $15,000. This may be too hefty for small investors and newbies in the investing world.
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What is FarmTogether?
FarmTogether an accredited investor-focused investing firm is based in San Francisco, California. Since its launch in 2017, FarmTogether has raised almost over 3.7 million dollars through capital funding.
This real-estate platform is dependent on long-term contracts. That’s why they prefer to go with accredited investors instead of non-accredited ones.
Most of the FarmTogether deals range from 5 to 12 years. And you can either be a shareholder at one farm or own an entire farm for yourself.
There has been a mention of non-accredited investors option in the future. Still, as of this moment, you need to be an accredited investor (series 7, series 65, or series 82 licenses are accepted) to invest in a farm via FarmTogether.
A unique and exciting feature of FarmTogether is that the website offers excellent education and insights in investing in agricultural real estate like farmland. So even if you’re not familiar with the farming industry or don’t have enough agricultural knowledge, you’ll find FarmTogether resources helpful.
How Does FarmTogether Work?
FarmTogether’s working process is simple and effective. The research group at FarmTogether does thorough research to find the best farms in the prime production regions of the US.
The company mainly focuses on areas across the pacific northwest and in greater California. These areas ensure:
- Good weather condition
- Prime soils
- Excellent water supply for mass production
Once FarmTogether locates farms that meet their standard requirements, they will buy that farm from the seller or get it on a lease. And if a deal is done between the owner and FarmTogether, they’ll put the farm into their platform for individual investors like you.
Investing in a Farm
As it is a crowdfunding platform, you’ll receive a share of your chosen farm as an investor. The amount of shares you’ll hold depends on how much you invest in this real estate.
It’s worth mentioning that you’ll be allowed to go through:
- Every legal document
- The IRR of the entire project
- Possible cash yield
- And more
After you invest in a farm, you’ll get partial ownership proportional to the percentage of your share. You’ll receive cash yield that comes through the farm’s cash flow during your ownership of the farm. The investing period is around 5 to 12 years, give or take.
Selling Your Investments
If something happens and you no longer want to continue with the process, you can sell your FarmTogether shares.
In case you’ve decided to sell your investments, you can find buyers yourself or through the FarmTogether platform.
Be aware that FarmTogether will receive a slight premium due to the discontinuation.
Another important feature that sets FarmTogether apart from other crowdfunding agricultural real estate platforms is that they allow you to invest with debt.
Getting a debt possesses a few risks, though. Sure, it can generate impressive returns for you. But if the farm’s generated cash flow can’t cover up for the debt, you might face a significant loss in the business.
Once you’ve completed your investment through the platform, you now own a portion of that farm. And FarmTogether isn’t obliged to face the consequences when your farm faces any unfortunate events. FarmTogether only serves as the middleman in negotiation between you and the farm owner. However, the company will also handle property taxes, insurance, and other landowner expenses, so you don’t have to.
FarmTogether Returns: How Much Can You Earn with FarmTogether?
Your returns or income through the investment will largely depend on how much you’ve invested. But from the recent mergers and deal statistics, it’s safe to say that FarmTogether provides around 7 to 13% of cash return.
Depending on your annual net payout and investment, the cash yield that an investor can receive is somewhere between 3 to 9%.
|Average return||7% – 13%|
|Average cash yield||3% – 9%|
FarmTogether Payout System: How to Get Paid?
Depending on your preference, FarmTogether distributes returns quarterly, semi-annually, or annually.
The payment procedure is also convenient as FarmTogether will deposit your funds directly to your bank account.
Is FarmTogether Legit?
FarmTogether has completed almost 17 funded deals until now. There was a 22 million deal that set the record in the crowdfunded farmland industry as the most significant single asset crowdfunded investment to date.
Moreover, FarmTogether is a proud member of the silicon valley’s organization, Franklin Templeton-backed EvoNexus Fintech Incubator.
FarmTogether also partners with Farmland Opportunity, one of the leading corporations in the farming industry.
Who Can Invest with FarmTogether?
FarmTogether has strict requirements you need to meet to become an investor. These requirements ensure that the investors are financially stable and a failsafe.
To invest in FarmTogether properties, you’ll need to be:
- An accredited investor
- Have a net worth of at least $1 million
- Or can make $200k per year
You can also become a FarmTogether investor if you hold series 7, series 65, or series 82 licenses.
What is the Minimum FarmTogether Investment?
The minimum amount that you can invest in FarmTogether is $15,000.
The FarmTogether fees will depend on the type of investment and deal you’ll make with FarmTogether.
FarmTogether doesn’t keep you in a hazy position – once you pick up a plan, they will provide you with all the fees you’ll need to pay.
But in general, there are two fees that you need to pay for every FarmTogether deals:
|Upfront fee||1% – 2%|
|Annual asset management fee||1% – 2%|
How to Invest with FarmTogether?
Investing process with FarmTogether is straightforward and convenient. Here are the steps you need to follow to invest with FarmTogether:
Step 1: Applying for Investment
Visit the FarmTogether website and click the ‘Sign Up’ button at the web page’s top right.
Or you can click on the ‘Join Us’ button on the homepage, which will also lead you to the sign-up screen.
Step 2: Answering the Questions
Once you’re redirected to a sign-up page, you’ll need to answer a series of questions, such as:
- Why you want to invest
- And whether you meet the application criteria.
Step 3: Verifying Your Account
After you’ve answered all the questions, you’ll get to a page where you need to enter your name and email address. Once you put in your information, FarmTogether will send you a confirmation email with a verification code.
Simply enter the code to verify your account so you can browse FarmTogether’s listings.
Step 4: Investing
When you find a suitable listing, you can apply to invest in that listing by simply clicking on the farm’s details. Now, you just need to provide your bank details so that FarmTogether can evaluate you.
You can proceed to invest in the property after FarmTogether completes its evaluation within a few business days.
FarmTogether Pros & Cons
Undoubtedly, FarmTogether looks like a promising platform in the agricultural real-estate business, but there are some factors that some investors don’t get around.
Let’s take a look at the pros and cons of investing with FarmTogether:
- Provides the option to have sole ownership of farms
- Has investment calculators to help you make decisions
- It has a secondary market where you can sell your shares
- Comes with an excellent track record of significant returns and low risks
- Only available for accredited investors
- $15,000 starting investment seems a bit too much for small investors
FarmTogether vs. Fundraise
Fundraise is the most popular competitor of FarmTogether. The company is known for the variety of real estate deals across the United States. Unlike FarmTogether, Fundrise doesn’t focus on farmland investments only – you’ll find different types of properties out there. Plus, Fundrise allows non-accredited investors to invest with as low as a $500 deposit.
FarmTogether vs. EquityMultiple
Another well-known alternative of FarmTogether is EquityMultiple. This real-estate platform focuses on commercial real estate and farmlands alike. But unlike FarmTogether, EquityMultiple is better suited for expert investors because it doesn’t provide much educational resources.
FarmTogether vs. AcreTrader
AcreTrader is the most similar crowdfunded real estate platform to FarmTogether. Unlike other alternatives, this platform solely focuses on farmlands. Like FarmTogether, AcreTrader also accepts only accredited investors. However, AcreTrader has a minimum investment threshold of $10,000 and charges a 0.75% annual management fee.
FarmTogether Review Verdict: Is FarmTogether a Good Investment?
If we summarize all the information throughout this FarmTogether review, it’s safe to say that FarmTogether can be worth investing with.
It’s especially an excellent choice if you’re an accredited investor who’s looking for a long-term investment. The work process and the management team of FarmTogether are top-notch. And they also provide some of the best deals available on the market.
Finally, investing in FarmTogether can also be a good addition to your investment strategy to diversify your assets and get the most out of your investments.