Smart investors diversify their portfolios.
And while multifamily real estate is our favorite asset class, we love learning about other alternatives to the stock market.
Artem Milinchuk suggests investing in farmland, an asset class that does well in times of inflation and appreciates over time.
Artem is Founder and Head of Strategy at FarmTogether, a platform that makes it easy for anyone to invest in farmland.
He has 14 years of finance experience in food, agriculture and farmland, serving as CFO at Full Harvest Technologies before building FarmTogether five years ago.
On this episode of Financial Freedom with Real Estate Investing, Artem joins Garrett to explain how FarmTogether syndicates capital online for farmland deals.
Artem discusses why farmland is a relatively safe long-term investment, who manages FarmTogether’s farms and what kind of return his investors can expect on row versus permanent crops.
Listen in for Artem’s insight on the tax benefits of investing in farmland and learn how to leverage the FarmTogether platform to diversify your portfolio with sustainable farmland.
How FarmTogether makes it simple to invest in farmland
- Syndicates capital online for farmland deals
- Farms professionally managed by experienced team
What inspired Artem’s to build FarmTogether
- 10 years of working for investment funds in Canada
- Surprised by lack of options for US investors
Artem’s insight into how farms make money
- Selling harvest, e.g.: corn, soybeans, nuts, etc.
- Land appreciates in value over time (5.9% annually)
Who manages FarmTogether’s farms
- Rent to another farmer or family
- Contract out to company to execute our plan
What factors make a farm do poorly in a given year
- High input costs, low crop prices
Why farmland is still a safe long-term investment
- 11% annual return from 1992 to 2022
- Low volatility of 6.7% and land appreciates
Why FarmTogether specializes in permanent crops
- Includes nuts, fruits and vegetables
- Higher incomes lead to higher consumption
Where FarmTogether’s assets are located
- California, Washington and Oregon
- Nebraska, Illinois and Oklahoma
Why FarmTogether invests in new and existing farms
- Financial services products underdeveloped
- Provide alternative to banks for farmers
What Artem’s team looks for in a farmland deal
- Good price and development premium
- Buying opportunities for certain crop and region
- Understanding of water regulations in area
What kind of returns FarmTogether investors get
- ‘Stable and boring’ on row crops, 7% annually
- 9% to 15% on permanent crops in development
The tax benefits of investing in farmland
- 100% CapEx on development depreciates Year One
- Improves IRR by as much as 200 basis points
What Artem sees on the horizon for sustainable investing
- Extractive practices decrease value of farmland
- Opportunities for regenerative ag, carbon capture
How FarmTogether makes investing in farmland accessible
- Use tech to underwrite, manage and raise capital
- Approaching $200M in assets under management
How Artem’s team markets farmland to investors
- Photos, drone videos and interviews with farmers
- Looking to invest in on-farm cameras
Connect with Artem Milinchuk
Connect with Michael Blank
Email [email protected]