Real estate isn’t just about selling, buying, and renting houses. Nor is it limited to one part of the world. In the world of real estate, there’s lots of room for creative investing.
When you think about it, real estate property IS the world … meaning it’s is MUCH more than man-made houses.
It can be agriculture too… investing in land that produces crops.
With finite resources, agriculture creates a unique opportunity for investors looking to diversify their investments.
In our latest show, we help you consider the possibilities of coconuts.
With a skyrocketing demand worldwide for things like beauty products, health supplies, and cooking alternatives, coconuts offer huge potential for cash flow both in the short- and long-term. (Not to mention the Piña Coladas!)
In our latest show you will hear from:
- Your internationally investing show host, Robert Helms
- His coco-nutty co-host, Russell Gray
- CEO of Precious Timber and real estate investor, Alex Wilson
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Agriculture adventuring: learn your niche
As you consider where and what agricultural opportunities to invest in, remember every investing avenue comes with a learning curve.
There’s no one-size-fits-all in investing. For example, mobile home investments differ from medical buildings.
Agricultural investing certainly has some educational hurdles. To invest wisely, you need to understand aspects of quality soil, irrigation, weather, growth, crops, science, and much more.
Sheesh! That sounds overwhelming, doesn’t it?
Instead of becoming a farming expert yourself, the key to agriculture investing success is to find the RIGHT partners who already have talent and a team.
Like syndicating for a big real estate investment with business partners … the same concept can apply to agriculture. Why not syndicate it?
Farming … where is the money?
In the United States, as populations grew, farming land was acquired. Not having access to land didn’t mean farmers’ crops decreased in demand. It merely meant they needed to find another place to grow them.
With farming you have to consider where the money is. Chances are there isn’t any farmland available in your backyard.
When investing in agriculture, consider where crops grow best. What is the demand around the world for various produce?
Your agriculture investing doesn’t need to be based on your local economy … instead, look at global demands for the right commodity. Where is that crop grown?
Expand your portfolio through … coconuts?
Timber expert, Alex Wilson has been on our show before. This time he shares his expertise on … COCONUTS.
Over the last 15 to 20 years Alex has watched this sturdy product go from “virtually a niche product” to “a crazy commodity.”
Several years ago, Alex received a call from an exporter looking for coconuts … lots and lots of coconuts.
He wanted a container of coconuts every week!
Intrigued with this man’s interest in coconuts, Alex asked a simple question: “What in the world would you do with that many coconuts every week?”
Coconuts are used as biofuels, filtration of water, pet food, beauty products, and so much more. In fact, there are HUNDREDS of applications for coconuts.
Alex noted, “The one product that really catapulted coconuts in mainstream media is coconut water.”
In fact, according to Coconut water today is a multibillion-dollar company. News sources say coconut water is the latest “battle ground” between Pepsi and Coca-Cola.
Coconuts: a Central American success
Looking to diversify his investments, Alex decided to start growing coconuts in Nicaragua.
A novice to the trade, Alex made a conscious decision he wouldn’t plant commercially until he found an expert.
Fortunately he found a team of experts … a family farm business with 20 years of experience.
The farm wasn’t active at the time, but the oldest son of the family was the only certified coconut seed pollinator in all of Central America.
Partnered with this Nicaraguan native family, Alex is rapidly expanding the company and is now in the process of planting 10,000 acres of coconut trees.
The ultimate cash flow crop
Unlike timber or other tree tenants, coconuts come back every year and they grow quickly! What does that mean for investors? A continuous stream of cash flow.
That’s not even the best part … coconut investing is relatively low risk.
Unlike other agricultural investments, the coconut is VERY strong and durable. (Have you ever tried to crack one?)
Even more, each tree will produce coconuts for 60 years! Alex asserts, “I look at the coconut as my rental property. I actually look at it now, to be honest with you, as an agricultural annuity.”
Agricultural investing isn’t your run of-the-mill investment … it is very unique.
It broadens your investment portfolio in both real estate type, but also geography.
If you only own real estate in one country, you may want to think about expanding your investments globally.
So just how does an individual go about investing in this global commodity?
With Alex and Precious Timber … it is SIMPLE. “We have a fee simple, deeded approach … inside of our registered plantations, we subdivide parcels and then individually deed those parcels to the clients.”
Alex also puts together a registered SCC fund with three components … coconuts, coffee, and timber.
This blended approach allows you to earn early income with the coffee, additional income from the coconuts, and the “lottery returns” from the timber.
The typical tree investor
Although tree investing is a great opportunity … it isn’t a great fit for everyone. Alex considers a couple questions when dealing with potential investors:
- “What are you trying to accomplish financially?”
- “When would you like to accomplish it?”
The next step in the process is education.
“If you are going to learn about this to the degree where you can make an intelligent, informed investment decision, let me help you with it, Alex says. “I’m not going to sell you on it.”
In the search for investors, Alex looks for individuals who are PATIENT.
“A lot of investors don’t have patience. They want to be able to quickly get out of stuff when things go wrong. This isn’t easy to get out of.”
What are the red flags?
When investing in farmland, Alex advises to make sure you know who owns the land … so look at the deed.
From there you will want to see what experience they have. Take a look at their farm … are they actually growing things?
Ask the locals and gather information on their reputation. How does the community regard them? Are they accredited investors?
Doing these essential steps can help get your agricultural investing started right.
How do YOU invest?
Once the right client is identified … let the investing begin!
Alex’s minimum investment is $100,000 … a two-unit minimum of planted coconuts, $50,000 per unit.
However the hype in coconut products has the average investor spending around $250,000.
Once you invest? What is next? Really … not much!
The purchase comes in a package including registration, labor costs, and ongoing crop care. After that all you have to do is come down and take a photo to capture the progress.
With a world of finite resources, agricultural investing is a great opportunity to fill the gap.
The coconut has an impressive amount of uses (more than 100) and its durability to ship around the world is outstanding.
The legacy left with this long-term investment not only provides cash flow … but also can be incorporated into estate planning.
Unlike apartment buildings that lose value and wear over time … agriculture keeps growing.
Want to leave an endowment? Consider the coconut.
Until next week … make some equity happen.
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