FarmTogether Review

FarmTogether Review 2023: Best Farmland Investment?

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  • Minimum Investment
  • Accessibility
  • Transparency
  • Investment Fees
  • Offering Selection
3.6

FarmTogether Summary

FarmTogether is a farmland investment manager that is dedicated to helping accredited investors gain exposure to unparalleled farmland opportunities.  Investors have access to institutional quality US farmland investments, including both permanent and row crops in prime growing regions across the country, at the click of a button. Each deal is structured as its own LLC, so this is not a REIT investment. Investors become owners of the LLC associated with their land purchase.

Farmland has historically proven itself as a strong investment for many years, but the only problem was that it wasn't widely accessible to individual investors. With FarmTogether, investors can participate in an asset class that has low volatility and has historically outperformed average annual returns from the S&P 500.

The platform is reserved for accredited investors and requires a minimum investment of $15,000. The team targets opportunities that typically yield between 6-13% returns with 2-9% cash yields – all net of fees.

As is the case with most other real estate investments, farmland investments are designed to be  an illiquid non-traded asset. Investors should be ready to commit to the entire duration of the investment.

Pros

  • Management team has tremendous experience
  • Range of offerings across both row crops and permanent crops to fit a broad spectrum of risk/reward appetites
  • Stable returns projected
  • Hassle-free investment process
  • You can specify a set dollar amount to invest
  • Sole purchase deals available for larger investors ($1M+)
  • Fund option for those looking for diversified exposure through a single allocation.

Cons

  • Accredited Investors Only
  • $15,000 Minimum Investment
  • Fees can be complicated

Imagine an investment opportunity that has historically produced higher average annual returns than the S&P 500, while taking on less volatility. Seems a little too good to be true, right?

As investors, we are trained to be skeptical whenever we hear about the next hot investment opportunity. Typically, by the time an investment hits the mainstream, all of the money there was to be made has already been made.

However, investing in farmland has not fallen victim to excess hype. Farmland is an investment opportunity that has been around for thousands of years and, historically, has consistently delivered average annual returns above the stock market.

Not to mention, it is still far less common than investing in stocks, bonds or traditional real estate.

The reason for the increased interest in farmland investing today are vast, but to name a few:

  • Billionaires like Bill Gates are buying farmland left and right
  • Valuations for equities (stocks) have high volatility
  • Demand for quality farmland is expected to increase with a growing global population
  • The amount of arable farmland is steadily declining, driving up land values
  • Inflation is driving food prices are to record-highs
  • As an asset class, farmland has consistently outpaced the S&P 500 while experiencing less than half as much volatility over the last three decades

Whatever your reason may be, you have some level of interest in being a farmland owner yourself. There's many ways to gain exposure, but in this article, we provide a complete FarmTogether review. Let's dive in!

Buy Farmland Online

PlatformMinimumLinkAccredited OnlyInvestments
AcreTrader farmland investing platform$8,000+View InvestmentsYesUS Farmland, Timberland, Vineyards
FarmTogether farmland investing platform$15,000+View InvestmentsYesUS Farmland
farmfolio$30,000+View InvestmentsNoSouth American Farmland

FarmTogether Review: Summary

  • FarmTogether is a farmland investment manager  specializing in row and permanent crops in prime growing regions across the US.
  • They are capitalizing on making the $2.7 trillion US farmland market more accessible to accredited investors
  • FarmTogether offers a variety of channels, to include: crowdfunded farmland offerings, 1031 exchange, sole ownership bespoke offerings, and our Sustainable Farmland Fund. 
  • Their user-friendly platform is full of tools that will be useful to newer investors in farmland
  • The platform claims overall average returns of 6-13% and cash yields of 2-9%

Click here to view current offerings on FarmTogether!

What Is FarmTogether?

FarmTogether logo

FarmTogether is a crowdfunded farmland investing platform based out of San Francisco. The company was founded in 2017 and has since raised over $25 million in venture capital funding. Their mission is to radically democratize farmland investing by providing carefully curated deals to the public.

The more than 35 deals on the platform are located across 7 states and include 16 different crop types.

Accredited Investor Requirements

In order to qualify as an accredited investor, you have a few options. Either have a net worth of $1,000,000 excluding your primary residence, or make at least $200,000 per year. If you do not meet the income/net worth requirement, you can be deemed an accredited investor if you have a current Series 7, Series 65, or Series 82 license.

If you don't meet these criteria, you'll be unable to invest on the platform for the time being.

Click here to view current offerings on FarmTogether!

Management Team

Across the entire management team, they have a combined 70 years of extensive experience  at reputable farmland investing, investment management, agriculture, and ag tech firms demonstrated by $1.2B+ of collective deployed capital. This provides investors with significant market insights and confidence that good decisions are being made.

FarmTogether Founder and Head of Strategy,  Artem Milinchuk, has over 15 years of experience in farmland and agriculture. Additionally, Milinchuk was previously the CFO of a B2B platform that facilitated the buying and selling of produce. He is in good company among graduates from Harvard Business School and experienced agriculture professionals.

Jared Hine, FarmTogether CEO, brings more than 20 years of experience in finance and asset management, having begun his career in the asset management divisions of JPMorgan Chase and Bank of America.

How Does FarmTogether Work?

Through both their proprietary sourcing technology and strategic partnerships, FarmTogether reviews a mix of on-market and off-market opportunities across the United States. 

Their process starts with the global macro view, taking into account climate change, water availability, and long-term trends in agricultural yields, among others. They then dive deep into the end markets for the farm products they target, analyzing supply, demand, consumer preferences, and more to arrive at a long-term view on price and valuation trends.

Their team then conducts a property analysis incorporating over 150 data sets from public, private and proprietary data sources. We then apply our proprietary technology and investment expertise to zero in on the best investment opportunities in our target geographies and crops.

Finally, they look at all the due diligence items relevant to the specific farm using a 105-point checklist to evaluate each property, which includes soil, leaf, water, capital improvements, title, local legislation, depth of the supporting farming ecosystem, cost of inputs, farmworker wages, and more. 

Once these farms are identified and purchased, they are listed on the FarmTogether platform for investors to browse. Each listing includes information on the total value of the land, the target IRR for the project, and the cash yield. Additionally, each project will have a different target holding period so investors know what to expect.

FarmTogether provides a seamless and secure online experience, where account setup, accreditation document upload, and payment selection can be completed in minutes. Once the investment is confirmed, investors can track their portfolio’s performance over time within the FarmTogether portal. 

Click here to view current offerings on FarmTogether!

FarmTogether investment strategies

FarmTogether Minimum Investment

Unlike many other farmland investing platforms, FarmTogether doesn't split their projects into specific-sized parcels. Instead, they allow investors to specify exactly how much they want to invest in each project.

FarmTogether requires a low minimum investment of $15,000 for their crowdfunded offerings. 

The amount you choose to invest will determine how many acres of the property you will own. They pay out returns proportionately to the percent of the project that you own. The minimum investment for their other products is $100,000 for our Sustainable Farmland Fund LP and $3,000,000 for their bespoke channel.

FarmTogether Holding Period

Each investment on the platform has a listed time horizon, at which point the firm plans to sell the deal. Most of the deals have a holding period of 5-12 years. 

FarmTogether currently does not have a secondary market for investors to resell their interests to other investors and it is unlikely that a secondary resale market will develop, or if it does develop, that it will provide investors with liquidity for their investment.

Click here to view current offerings on FarmTogether!

FarmTogether Investment Size Calculator

As investors, it's important that we have realistic expectations going into any investment we make. On the FarmTogether platform, every deal will have an investment size calculator that you can use to estimate your returns.

By inputting how much you plan to invest, the calculator will also tell you how many acres you would be purchasing. You will also see a dynamic graph with your expected returns over time and a breakdown of your return potential between appreciation and income.

This tool adds to the user-friendly experience that FarmTogether creates for investors and demonstrates their dedication to transparency. While these numbers are only estimates and do not guarantee returns, they are useful for visualizing the trajectory of your investment.

FarmTogether investment returns

FarmTogether Sustainable Farm Fund

In addition to offering individual deals to investors, FarmTogether also has a Fund available to investors. The Fund is ideal for investors interested in a diversified portfolio of US farmland, including exposure to permanent and row crops in prime growing regions of the country, through a single allocation. 

The Fund does come with a $100,000 minimum investment, so it may be out of reach for some.

However, the fund also projects an 8-10% annual IRR and a 4-6% net annual distribution.

This fund has an evergreen structure, meaning investors can enter and exit the fund as they deem fit.

For more information about their fund, be sure to check out the offering!

FarmTogether Sole Ownership

An offering unique to FarmTogether is the ability to purchase bespoke deals of $1,000,000+

This option allows investors to render sole ownership of a farm of their choice; investors can think of this as a separately managed account.There are a number of benefits to this route. Namely, the customization available to the investor in terms of legal structure, capital structure, and holding period. Investors going down this route will also have the opportunity to participate in 1031 exchanges. This is not an option for other FarmTogether investors to take advantage of.

Click here to view current offerings on FarmTogether!

1031 Exchange

A 1031 Exchange is an optional tax strategy you can use when you sell an asset, in this case farmland, for a profit.

If you have capital gains, you have to pay taxes on them. However, with a 1031 Exchange, you are able to roll the proceeds into another like-kind investment in order to defer the taxes. You could sell one farm, and purchase another within 45 days to qualify for the deferment. 

So, in the case of farmland, you could sell one farm and roll the proceeds into a like-kind farm to avoid paying taxes on your gains.

Sustainability Practices

Farming as a whole has been in a constant state of change as additional technologies arise. Many of these new innovations allow for more sustainable farming practices to take place at scale.

As a platform, FarmTogether is at the forefront of this movement. The FarmTogether portfolio is Leading Harvest certified, meaning 100% of our acreage has been verified as being managed sustainably through outcomes-based evidence and third-party audits.

Is FarmTogether Safe?

All investments involve risk and farmland is no different. There is always the potential for loss if an investment goes south. With this asset class, some of the risks you'll experience are weather risk, crop risk, and liquidity risk.

Through their extensive due diligence process, FarmTogether is able to mitigate some of these risks. For example, through negotiating sustainable farmland practices with farmers, they can better maintain soil quality. On their website, FarmTogether also points out that just 1% of deals they review make it to their list of offerings. The company routinely reviews potential deals and cuts out 99% of them through their rigorous screening process.

Additionally, over time, farmland has been a significantly less volatile asset class than stocks or other types of real estate. This has historically led to more consistent returns over time for investors.

FarmTogether is also listed with the SEC as an exempt reporting adviser.

All of the deals on the FarmTogether platform contain investments from executives at the company. Seeing those at the top participating in deals should give investors a level of confidence in the quality and safety of deals on the platform.

FarmTogether Returns

On their website, FarmTogether boasts strong overall returns in the range of 6 – 13% net of fees. The returns generated by FarmTogether can come in two forms: capital appreciation, and income. Capital appreciation is generated if a property is sold for more than it was bought for. Income, on the other hand, is generated when farmland is rented out to farmers to use and is dependent on the management structure

In general, FarmTogether estimates a 2 – 9% cash yield

They pay income distributions either quarterly, semi-annually, or annually directly to investors' bank accounts. They pay out appreciation at the end of the holding period when they sell the property.

So far, more than 35 deals have been funded through the FarmTogether platform. The most recent of which was a $8.8 million pistachio orchard in California.

Click here to view current offerings on FarmTogether!

FarmTogether land value appreciation

FarmTogether Fees

The fees for each deal on the platform tend to vary, but they list them clearly for investors to see. Through their use of technology and increased efficiency, these fees tend to be much lower than what you are likely to find on other crowdfunded real estate deals.

FarmTogether Investment Taxes

The last thing we will be covering is investment taxes. Keep in mind, we are not tax professionals. This is just a basic overview.

Currently, there is not a favorable tax treatment for renting out farmland and collecting cash rent. That means this investment is largely treated like most others out there.

You cannot depreciate land itself, however buildings or structures on the land can be. Depending on the deal you invest in, some may have the opportunity for depreciation.

Pros of FarmTogether

  • Management team has tremendous experience
  • Range of offerings across both row crops and permanent crops to fit a broad spectrum of risk/reward appetites
  • Stable returns projected
  • Hassle-free investment process
  • You can specify a set dollar amount to invest
  • Sole purchase deals available for larger investors ($1M+)
  • Fund option for those looking for diversified exposure through a single allocation.

Cons of FarmTogether

  • Accredited Investors Only
  • $15,000 Minimum Investment
  • Fees can be complicated

FarmTogether Review: Final Thoughts

As far as crowdfunded farmland investing platforms go, FarmTogether has a lot of things going for it. With a middle-of-the-road minimum investment of $15,000, it is easy for investors to start by diversifying a small portion of their portfolio into farmland.

Additionally, the user-friendly interface and transparency provided by the platform make it easy for investors to feel confident. This includes their investment size calculator which is a unique and valuable offering of the platform.

However, the fact that the platform has only been around for a few years means that we don't have a massive amount of data. Plenty of deals have been funded on the platform, but not enough time has passed to see them through to sale.

With the growing popularity of platforms like FarmTogether, we're only becoming more confident in the asset class as a whole. As the saying goes the best time to plant a tree was 20 years ago, the second-best time is today.

So whether you choose to invest with FarmTogether or one of the many other farmland investing platforms out there, happy investing! Hopefully this FarmTogether review was a helpful start!

Click here to view current offerings on FarmTogether!

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