Now the Fed’s up to $400 billion …
“The time to repair the roof is when the sun is shining.”
John F. Kennedy
Until next time … good investing!
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Agriculture Investing – An Opportunity to Diversify Globally
Everyone needs a place to live … and everyone needs to eat.
Food is the original wealth. The world’s population is growing … and there are more mouths to feed every day!
Investors don’t have to limit themselves to properties with assets like houses, commercial buildings, or shopping malls.
You can harvest dollars from land that doesn’t have anything to do with tenants … and has everything to do with crops.
Agriculture investing is one of the most enduring and common sense investments there is.
Learn firsthand how money CAN grow on trees from a well-seasoned expert in international agricultural investing.
In this episode of The Real Estate Guys™ show, hear from:
- Your food-for-thought host, Robert Helms
- His food-loving co-host, Russell Gray
- Expert agricultural investor, David Smith
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Digging into agriculture investing
We live in a big world with lots of mouths to feed … that means lots of crops … and lots of ways to profit.
In the past, agriculture investing was a difficult business to get in to on a small scale. If you didn’t have huge capital to buy huge plots of land … you were hugely out of luck.
But in the last several years, we’ve seen lots of folks who have figured out a way to let mom and pop play alongside them.
When it comes to investing in agriculture real estate, the pizza theory comes into play … fitting since we’re focusing on food.
Someone buys a large pizza. They take it to a party, cut it into slices, and sell each slice for a little bit of a markup.
At the end of the day, the person who brought the pizza makes a little bit of profit for their effort … and everybody gets to have a slice of something they might not be able to afford on their own.
In agriculture, somebody buys a large parcel of farmland and puts all the operations and distribution channels in place.
Then, they divvy up a slice of the deal for a small markup to give many small investors the chance to play in that space. We see this as a great opportunity.
Everyone needs to eat
Crops come in all sizes, shapes, and degrees of durability … not to mention that different regions of the world have different opportunities.
In real estate, we often talk about getting the market right. Buying an investment property in the wrong market can get you into trouble.
But with crops, it’s not exactly the same.
It doesn’t really matter where the hungry mouths are … and it doesn’t matter where the food is grown.
Wherever the best farmland is … that’s where you want to buy. With today’s shipping technologies, you can get the food wherever it needs to go.
Another perk of agricultural investment? It is a staple. It meets a basic human need … just like housing.
Everyone needs a place to live … and everyone needs to eat.
And the population … the number of consumers demanding food … is steadily GROWING.
Crops and cash flow in Paraguay
David Smith is an experienced investor. He started in real estate, and for the last several years, he has been involved in agriculture in Latin America.
After many years living and working in real estate in Latin America, David knew he needed to diversify.
After some due diligence, David decided to invest in agriculture.
“I was so interested in the business model,” David says. “It was a passive, turnkey investment not subject to the whims of the market. I really liked the security of it.”
David landed in Paraguay … a big farming country a bit off the radar … and invested in oranges.
Why oranges?
David says one of the biggest things that struck him about this particular crop was its durability. It also has a great distribution area.
Paraguay imports about 85 percent of all the citrus products consumed in the country.
“We can’t even meet the demand in Paraguay, let alone try to export yet,” David says.
Today, David is expanding to new segments of citrus fruits like lemons, limes, and sweet limes … ingredients that are important in the local diet.
Paraguay is traditionally a row crop producer … foods like soybeans, wheat, corn, and chia. It imports citrus from Brazil and buys greenhouse vegetables from Argentina.
Looking for ways to provide foods locally that are traditionally imported can open up lucrative niche opportunities in agriculture.
By providing a local alternative to imported foods, David provides a cheaper option for local grocers while creating income for his investors.
Going bigger with greenhouses
Like any investment niche, creative solutions can pay off … literally.
In Paraguay, one of the biggest challenges to growing vegetable is the heat.
“Paraguay gets very hot … and when I say very hot, I’m talking Tucson hot. It can be 120, 130, even 140 degrees in many locations,” David says.
The vegetables grown locally under normal farming conditions don’t grow very well. Their growth is stunted, their colors aren’t as bright, and they don’t taste as good as imported vegetables.
That’s where GREENHOUSES come into play.
By growing high-use … and typically high-priced … vegetables in greenhouses, David and his team can provide a local, tasty, and affordable solution to consumers.
This also provides a unique opportunity for investors. Instead of investing in land, individuals can purchase a greenhouse.
Each greenhouse is approximately 26,000 square feet … that’s a good amount of space for growing some green.
Greenhouses are also a popular investment because of their quick returns. Most investors will receive a return after just one year of making their investment.
“It’s a very stable business that runs 24/7,” David says.
And it’s a business that you don’t have to worry about managing. David and his team employ expert staff members that specialize in growing each crop.
These employees are even more motivated to provide extra levels of care, because they share in the profits.
“We offer them bonuses based upon produce amount, not net profit. In turn, they really put a loving touch into their work,” David says.
Determine if agriculture investment is right for you
Most Americans haven’t invested overseas.
There are a lot of reasons for this … but one of the biggest is not understanding how things operate on the ground in a different country.
That’s why having a local team managing the day-to-day of your investment is so powerful … especially in a niche like agriculture.
Just like any other investment opportunity, it’s important to do your due diligence.
David and his team help investors get a feel for agriculture by providing informative tours of their operation in Paraguay … and he also prepared a new, informative special report Citrus Fruits in Paraguay – Investments that Grow Naturally.
Whether or not this particular opportunity is right for you, expanding your thinking to a bigger picture of real estate than just houses and hotels is important … and can yield lucrative results!
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The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.
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Citrus Fruits in Paraguay – Investments that Grow Naturally
Citrus Fruits in Paraguay – Investments that Grow Naturally
The climate in Paraguay is ideal for growing citrus crops and the demand for produce is strong!
With farmland in limited supply and the demand for
food increasing annually, investing in agriculture has
always been considered as relatively safe.
Paraguay has been one of the fastest growing economies over the past 10 years.
It’s abundance of natural resources and subtropical climate conditions make it ideal for growing citrus fruits.
By investing in Citrus Fruits you’ll …
- Become owner of a hard, physical asset
- Receive passive income from the citrus crops grown on your land (your returns
aren’t correlated with the financial markets, providing a great diversification opportunity) - Invest in a country with a stable growing economy, have a competitive tax regime and easy
access to low cost energy and labour
Ready to receive passive income from the citrus crops grown on your land? Simply fill out the form below to get your free copy of “Citrus Fruits in Paraguay – Investments that Grow Naturally”
The Pink Panther strikes again …
Old dudes like us have fond memories of beer-belly laughing out loud at the hysterical antics of Peter Sellers’ Inspector Clouseau in the original Pink Panther movies.
If you’ve never seen them, check them out. Two of the best are Return of the Pink Panther (1975) and Revenge of the Pink Panther (1978).
Clouseau is a bumbling idiot. But through sheer dumb luck he always ends up succeeding … in unexpected ways as a result of unintended consequences.
The Senate’s recent hearings on housing reform remind us of Clouseau.
The purported goal of the Senate shindig is to gather a group of big-brained housing industry leaders and experts to find a solution to the affordable housing “crisis”.
But … as this Forbes article opines, some perspectives aren’t part of the conversation … perhaps for a reason.
Of course, you may have a differing opinion and that’s fine. We have our own opinion too. But that’s not the purpose of today’s muse.
We simply watch what’s happening today and consider how best to capture opportunity or avoid loss based on where things are likely headed tomorrow.
In this case, it seems Uncle Sam is looking for ways to make housing affordable. That’s a noble objective. Go team.
There are really just three basic approaches.
One is to increase supply relative to demand. When supply exceeds demand, prices to drop. That’s how abundance and productivity create prosperity.
After all, lower prices make things more affordable to more people, right?
That sounds reasonable. But it also sounds a lot like deflation.
And when bankers are in the room … the kind who make home loans secured by the dollar value of the property … they FREAK at the idea of falling prices.
So you’re probably not getting sincere ideas from bankers about how to lower prices.
Then there are the builders …
While builders LOVE the idea of building more houses, they also want to earn a profit. Profitable building is easier when prices are higher, NOT lower. So you can guess which direction the builders are leaning.
What about the wizards of Wall Street?
These guys make money shuffling paper. So they just want LOTS of paper (i.e., mortgage-backed securities) created, so they have more chips to play with in their casinos.
And Wall Street knows falling prices frighten the lenders who make the paper possible. So it’s a safe bet Wall Street votes with the bankers for higher prices.
Even at the Main Street level, there’s not much motivation to push prices down in pursuit of truly affordable housing.
Real estate agents (the largest trade association in North America) aren’t raving fans of low prices as the preferred path to affordability … despite their rhetoric.
After all, real estate agents promote buying a home as a great “investment”. No one wants to make an “investment” that goes down. So higher is better.
Last but not least, there’s Dick and Jane Homeowner (often registered voters) … whom are keenly aware of their castle’s current market value, even though they have no intent on selling.
Of course, it’s fine for the prices of cell phones and big screen TVs to fall, but not home sweet home. God forbid.
Plus, its fun for Dick and Jane to use their home equity to reset credit lines with debt consolidation loans, or to augment the falling purchasing power of their incomes.
And everyone knows home equity ATMs only work when housing prices steadily RISE.
So yes, home BUYERS want the house affordable when THEY buy it. But after that … home OWNERS want up, up, up. Sorry, next generation. Figure it out.
When we asked then-candidate Donald Trump for his plan for housing , he simply said … “Jobs”. Presumably, good jobs with higher pay.
Higher pay leads to the ability to make higher payments which leads to bigger mortgages (happy bankers, happy Wall Street) which leads to HIGHER prices.
So it’s just a wild guess … but we don’t think there’s a chance in a very hot place that there’s any serious motivation to make housing affordable.
Not if “affordable” means “less expensive”.
ALL the incentives are to make housing MORE EXPENSIVE … but ACCESSIBLE. That means more, cheaper, and easier FINANCING.
So even IF the PTB (Powers That Be … it only sounds like Politboro) sincerely believe more and cheaper financing makes things more “affordable” …
(Hey, it worked for college tuition … oh, wait …)
… like Inspector Clouseau, they’ll end up pushing housing prices up by “accident”.
That’s what happens when you use debt to pull purchasing power from the future into the present.
But whatever the motives, they certainly have the tools to make it happen …
… lower interest rates, easier lending guidelines, government (taxpayer) guarantees, tax breaks … and the Fed’s all-powerful printing press.
Yes, we know all that is what first inflated and then deflated the housing bubble last time.
But smart, disciplined investors made not only survived the implosion … they made millions from the re-inflation.
So while this may not be the time to speculate on a housing price boom in the short term …
… it’s arguably a great time to liquidate equity, streamline expenses, solidify leases, and prepare for the long game.
Because when Uncle Sam is working on making something “affordable”, it usually means that something is showing serious signs of slowing and needs a boost.
Of course, when you find reasonable deals in relatively affordable markets and you have a GREAT boots-on-the-ground team, it’s also a great time to use cash flow real estate to stock up on cheap long-term debt.
Remember, real estate … even housing … isn’t an asset class.
Every individual neighborhood and property is unique. So while deals might be harder to find, they’re still out there.
And if the cash flow makes sense, you’ll weather the storm … warmed by the notion that everyone with power to influence policy will be voting for HIGHER prices year in and year out … forever.
Of course, they might break the financial system or crash the dollar trying to do it … so it’s smart to be prepared for that too.
That’s why we like gold, oil, agriculture, and paid for properties in non-leveraged markets … including, and perhaps especially, in non-domestic markets.
Real assets like food, commodities and land tend to hold relative value when currencies struggle.
Gold and silver can almost always be easily converted into any currency … and are a useful way to store liquefied equity privately outside a fragile financial system or hostile jurisdiction.
And if the dollar continues its long-term slide relative to gold, a little gold might go a long way toward retiring dollar denominated debt (like a mortgage).
That’s where we think gold bugs and real estate bugs don’t understand each other. We know. We spend a lot of time with both.
Gold is great for reducing counter-party risk and hedging against a falling currency. But gold doesn’t cash flow.
Real estate is great for using cheap long-term debt to create tax-free cash flow and long-term equity growth. But it isn’t liquid and it takes a long time to retire the debt.
But putting gold and leverage cash-flowing real estate in a falling currency environment together makes each much more powerful.
It takes time to get your mind around it … but we encourage you to dedicate a little of your financial education time and budget to learning more.
Because once you understand how gold and real estate make each other better, you’ll probably be more excited about both. We are.
Until next time … good investing!
More From The Real Estate Guys™…
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The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.
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Paraguay Citrus & Greenhouse Plantation Tour
Paraguay Citrus & Greenhouse Plantation Tour
Dates Coming Soon!
To be sure YOU are among the FIRST to know when the next tour is scheduled, join the Advance Notice List.
Discover the exciting growth potential of agricultural investing in Paraguay, presented by The Agri-Terra & Paraguay Ag Invest Team!
The tour will be packed with education … and produce! Plus you’ll dive deep into a real-life farming operation and get an opportunity to get in the game of global investing in the agricultural space.
Food is a commodity everyone needs. In a bubble market, concerned investors are drawn to farmland and agricultural commodity investments.
Owner and CEO of Agri-Terra KG, Carsten Pfau, will spend some time teaching about what to look for when considering investing globally in agriculture.
While jurisdictions, property rights, and natural resources are not created equal all over the globe … there is growing opportunity in offshore agriculture that savvy investors are picking up on.
Agricultural investments give you the chance to make long-term, consistent income.
Now you can explore how to farm for profit … without getting your hands dirty!
Discover a couple of ways you can get paid for meeting the global needs of the every-increasing demand for FOOD … by owning farmland and “little green houses”.
Carsten Pfau and his experienced team will guide you on a tour of Paraguay Ag Invest’s beautiful plantations.
During your tour of the Paraguay plantations you’ll ….
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Experience first hand the agricultural strength of Paraguay and why it is rated so high by many investment experts today
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See citrus sapling trees and over 115,000 growing orange trees up to 4 years old
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Tour 20 fully operating greenhouses and learn about the latest in greenhouse technology
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Meet the experienced farm engineers and local farm workers
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Owner and CEO of Agri-Terra KG, Carsten Pfau, for conversational dinners learning about his experiences investing globally for many years
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Ask all the questions you have about global and agricultural investing
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Experience another culture
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Meet other like-minded investors who are pursuing agricultural investments
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Have FUN!
Trip Diary:
Each tour may vary slightly. Upon reservation you’ll receive the latest agenda.
Saturday – Arrive in Panama, have dinner with the Paraguay Ag Invest team who will accompany you to Paraguay
Sunday – Depart for Paraguay on an afternoon flight to Asuncion, arriving before midnight
Monday – Some morning R&R after traveling, mid-day educational presentation with Carsten Pfau, and enjoy dinner
Tuesday – Full day citrus and greenhouse plantations tour (depart 9:30am), enjoy dinner again with Carsten Pfau
Wednesday – Departure for Panama & Home
You’re the guest of honor! All your ground transportation to and from the airport, your stay in a 5-star hotel and all your delicious meals are covered. (You pay for your airfare)
The tour reaches capacity at 12 guests in order to ensure the best possible experience.
Dates Coming Soon!
To be sure YOU are among the FIRST to know when the next tour is scheduled, join the Advance Notice List.
Growing Greenbacks in Greenhouses in Paraguay
Growing Greenbacks in Greenhouses in Paraguay
One thing everyone on earth needs is food! That’s why greenhouse farming can be a secure investment … and Paraguay is a smart place to do it.
Long ago, some ancient human decided that growing food was safer than trying to chase it down. Since then, the agriculture sector has never stopped GROWING.
It’s simple. Demand has grown as the global population soars … expected to come in at 9.7 billion by 2050. In our opinion, NOW is the perfect time to consider agricultural investments … and there’s lots to intrigue us about Paraguay.
Paraguay is one of the most productive agricultural countries in Latin America. Its products feed some of the largest countries in the world … like China and Russia. Its mild climate, year-round sunshine and abundant natural water sources give it every ingredient for growing great produce.
Modern methods have made Paraguay’s fertile farms even more profitable through the use of greenhouses … an artificially controlled environment that ensures reduced disease susceptibility and increased crop yields.
In this special report you’ll explore:
- The advantages of greenhouse farming … including reduced labor costs
- Key details on greenhouse investing in Paraguay
- An overview of greenhouse construction and irrigation
- And much more!
See all the benefits of high produce yields, reduced plant disease, lower labor costs, and consistent crop production through greenhouse farming in Paraguay.
Start now by filling out the form below. We’ll send you a complimentary copy of Growing Greenbacks in Greenhouses in Paraguay.
Growing Profits Naturally with Farmland Investing
A diverse portfolio offers you a cushion … if one investment suffers, you won’t feel the impact across your entire portfolio. One method for portfolio diversification is to step outside home or apartment investing … and into farmland investing.
Investing in a commodity like produce or cattle allows you to lose your focus on an individual market and start focusing on the GLOBAL market for your product.
Like any real estate investment, there is a learning curve to figuring out agriculture … especially when you’re growing and exporting produce outside your home country.
But agricultural investments are worth the effort … they offer the best of all worlds, combining agricultural income with land banking and offshore strategy.
In this episode, global investor Carsten Pfau discusses his journey into the world of agricultural investing … and offers ideas on how YOU can get started as a passive investor in this low-risk option.
In this episode of The Real Estate Guys™ show you’ll hear from:
- Your orange-loving host, Robert Helms
- His like-a-lemon co-host, Russell Gray
- Carsten Pfau, manager of a thriving international real estate business
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How Carsten Pfau got planted in Paraguay
Trees don’t understand what’s happening at the Fed. They just grow. And the fruit, vegetables, and nuts they produce fulfill a fundamental, permanent human need for food.
Bread-and-butter commodities like agriculture will be valuable forever … that’s one reason we were so excited to chat with agricultural investor Carsten Pfau.
Carsten’s family is established as real estate developers and investors in his native Germany and in South America.
He decided to shift from traditional real estate to agricultural investing for one big reason … “You can sell agricultural products word wide.”
That’s one reason agriculture is so great. It’s less about getting the MARKET right, and more about getting the PRODUCT TYPE right.
For Carsten, the primary product is oranges. He also grows vegetables and grazes cattle.
When he stepped into the Paraguayan market with his brother Michael Pfau, Carsten quickly realized oranges were a great choice. Eighty-five percent of the oranges sold in Paraguay are imported, so there’s a huge market for locally grown produce … and potential for favorable margins.
Why Paraguay? One reason is its competitive cost structure. Because it is a developing country, costs are low, but there’s tremendous opportunity to innovate and bring in new technology … resulting in excellent profits.
Paraguay is great, but in order to do business there, Carsten says he had to learn the language … and the mentality. Every nation has different cultural mores, and identifying and learning them is essential to business success.
Growing from the ground up
Carsten says growing his business was an “amazing process.” When he opened up his orange plantation to investors, he expected 10-15 people to join in.
Instead, he ended up with 500 investors.
Agriculture requires a scale approach … the larger you are, the more efficient you can be, and the higher your profits. That’s why Carsten started syndicating.
He also says demand for oranges is growing so quickly that the biggest challenge is growing more. It’s the opposite of traditional real estate … instead of recruiting buyers and renters, he can sit back and CHOOSE from all the buyers who are coming to HIM.
We asked Carsten how he figured out the science of agriculture.
Carsten told us every plant he buys for his home dies … so his oranges aren’t thriving because of his green thumb!
They are thriving because he has compiled a team of the best experts in the business. His advice for investors is to “never think you know it all.” Instead, admit your strengths and weaknesses and join forces with talented people.
Plant your feet in a plot of your own
Agriculture can be daunting because it requires a lot of specific knowledge. One option for investors who want to get involved but don’t have the time or interest to get their hands dirty is passive investing.
“People are interested in two things,” says Carsten, “owning land and getting a cut of the action.”
Carsten combined these two things in his own business by offering investors the opportunity to buy the rights to their own parcel of land … and then sign a farming agreement with his management company, which plants, cares for, and harvests the trees.
This type of investment offers the best of two worlds … a land investment that appreciates over a long period of time, PLUS regular income from the produce.
Investors do have to wait about four years after their initial investment to start seeing proceeds. That’s how long it takes orange trees to mature and start bearing fruit.
Parcels start at 1.2 acres. For an initial $35,000 investment, clients get payroll for the Pfau’s workers, pest control, watering, and the trees themselves … and they never have to pay anything again.
Profits range from $5,000 to $12,000 per plot per year … and continue for 25 years, the span of the trees’ life. That’s a pretty good ROI!
Why agriculture?
“I like traditional real estate and still do it,” says Carsten. But the approach is very different. Marketing, financing, and selling are all different challenges.
The upside? “Here we can sell nation- and world-wide.”
“I like that I can lean back and choose when to stop,” says Carsten.
And he’s confident in the longevity of demand for his product. The middle class across the world is growing … and they’re hungry for high-quality food and water.
Whether you’re in Latin America or on the other side of the world, food is a fundamental human need. Succeeding in the food production business lies in getting the right scale.
The right way to do it is to find a pipeline of deal flow that will allow you to leverage your due diligence into MORE deals.
In many international markets, new technology and techniques allow forward-thinking investors to create massive economies of scale … allowing both syndicators and investors to get decent returns.
More From The Real Estate Guys™…
- Sign up for The Real Estate Guys™ Free Newsletter
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The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.
Love the show? Tell the world! When you promote the show, you help us attract more great guests for your listening pleasure!
Profitable Niches – Agricultural Investing
Throughout our Profitable Niches series, the message has been clear … there’s more than one way to invest in real estate. It’s so much more than single-family homes and apartment buildings. And, in today’s market, when some of the more traditional investments are stretched, it’s a good idea to think about something new and fresh.
Agricultural investing may not have been on your radar, but that’s about to change! And no, you don’t have to have a green thumb to participate. We’re talking with an expert guest who has blazed a trail into a market that’s energizing AND tasty.
As a sweet bonus, you can support a socially sustainable program as well. Check it out!
In this episode of The Real Estate Guys™ show you’ll hear from:
- Your cultivating host, Robert Helms
- His growing co-host, Russell Gray
- Friend and farmer, David Sewell, Founder of International Coffee Farms
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From beans to mug or bar … picking a crop
Just like everyone needs a roof over their head, everyone has to eat. That means there’s a demand for agricultural products and an opportunity for investors to do well in agriculture.
All it takes is a little education on the language of agricultural investing. In housing, it’s all about markets and demands. Agriculture has the same learning curve. Once you understand the geography, the demand for products, and a little of the science behind growing, you’re on your way to getting a foothold in agriculture.
But, agriculture is a wide world, so we’ll narrow our focus.
Our guest, David Sewell, started in agricultural investing with one product: coffee. It has a long shelf life, doesn’t perish quickly, and there’s enormous demand for specialty coffee with limited supply.
Specialty, socially sustainable coffee has been David’s niche since 2014. He purchases farms that are managed poorly, spends time working on the soil, understanding the climate, planting trees, and building a system that delivers product at a great return.
“Specialty coffee is a unique product that’s managed by the tree,” David says. “Specialty coffee is hand-picked, one cherry at a time.”
One of the best things about specialty coffee is that the limited growing geography drives up demand. But it takes some time to get a farm turned around to producing. Just like any gardening project, it takes patience and skill.
Since David started his business in 2014, he has worked through plenty of challenges and developed an amazing model that is blazing a trail in agricultural investing.
And now, he’s moved into a second crop.
“A good way to start the day is with a good cup of coffee and, in the evening, end it with a couple pieces of chocolate,” David says.
The demand for specialty, fine-flavored cacao is rising, and the supply is even MORE limited than specialty coffee. David’s cacao choice is particularly a specialty in Belize.
David took what he learned from coffee in Panama and rehabbed a few farms in Belize with the same, successful model.
With a little science, ingenuity, and care, David has capitalized on the demand for specialty products. He has 154 farmers who sell their crop exclusively to him, in his centralized processing facility.
“It’s what they needed,” David says. “So, we can control the cacao.”
David has three farms as well as a trading company that buys and sells literal tons of beans every weekend.
They’ve all been trained on organic processes, and together, they use the centralized processing systems he has built to make an efficient product that is ready for market.
Socially Sustainable Investing
Conditions on a coffee farm aren’t known for being great. That is different on David’s farms. He takes care of his 35 farm hands, and it has paid off.
“We’re proud to say that with the compensation program we’re able to provide and with the love and attention we’ve paid them, we haven’t had one turnover in 3 years,” David says. “We take care of the people.”
David’s farms change the way workers live. They receive good rain gear, so they aren’t picking cherries or tending to trees in the rain wearing a trash bag. Kids aren’t allowed on the farm … they attend school.
Families live in provided housing with electricity, flushing toilets, and other amenities that we often take for granted.
And, while these benefits for employees are key to David’s business, it’s not all altruistic. Labor turnover is expensive, and taking care of workers keeps them from leaving.
Beyond just the living conditions, workers are sent to seminars and congresses to build up their skills so they become even more educated and grow with the company.
This dedication to his workers shows by the passion and dedication they bring to the field and to the job every day. His workforce is expert in cacao and coffee, and that drives the superior flavor … and price.
That makes investing in opportunities like David’s even more exciting and sweeter for investors. Not only can you make money, but you can also make a difference.
Small-scale agricultural investing
One of the drawbacks to agricultural investing is understanding the science and process to growing, processing, and distributing a product. It takes time and experience to know a good opportunity and to succeed.
For instance, David learned early on that the biggest hurdle was the deeding process for international property. He warns that it is difficult to do on an individual basis.
But, David has found an interesting way to let people play with agricultural investing.
“We’ve focused on the delivery part of the investment vehicle,” David says. “That’s the hard part and where failure happens in many cases.”
With David’s business, he wanted to use his knowledge of syndication to make agricultural investing more accessible for people, regardless of their knowledge level and even for those who couldn’t buy an entire farm.
David’s farms are broken out into ½ acre parcels that can be bought individually or in groups. The parcel is deeded an individual investor or entity’s name, and it’s essentially a turnkey investment. It’s managed and operated by David’s team and investors not only get the returns, but also the knowledge that they’re participating in a socially sustainable program.
For investors looking for a legacy investment to pass on to their kids, or to invest in a program that’s socially sustainable, this is worth a serious look.
To learn more about David’s coffee and cacao operation and how you can get involved, send an email to beans [at] realestateguysradio [dot] com, and we’ll get you his special report on both opportunities!
And, we’d love to see you in September with David at our Secrets of Successful Syndication seminar. Here’s where to sign up!
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Agriculture / Farmland
Agriculture / Farmland
Money growing on trees. It’s fun to imagine … but what if you really could grow money with the power of plants?
In our view, agriculture land and agricultural commodity investments are one of the hottest alternative real estate investment out there right now … for good reason.
Unlike other markets, agriculture is global. Think about it … besides basic housing, what is another commodity that everyone needs? Food!
Every time you step into a grocery store or a farmer’s and make a purchase, you send money to agriculture land investors and farm owners.
And agricultural profits aren’t just limited to edible commodities. Think your hardwood floors … A valuable source of profits for farmers of teak and other prized woods.
So why not get in on the profits yourself?
Demand for agricultural products is consistent … and growing steadily as global populations increase. The world population is expected to grow from 7.4 billion to 9.7 billion by 2050. More people = more food = more money in the pockets of food producers.
And with modern technology, agricultural products can be distributed in markets across the world. World-wide demand provides stability.
The Food and Agriculture Organization (FAO) forecasts that a 60% expansion in food production is needed by 2050. This increase in demand is occurring when 80% of arable land is already in use and current arable land degradation is occurring at a pace 100x greater than the rate of formation and recovery.
In the United States, annual returns on farmland have averaged over 11% for the past 25 years. But agricultural investment opportunities are not limited to the United States … they are available across the world, providing you a way to extensively diversify your portfolio.
Agricultural investments can act as a buffer to market volatility. In 2008, farmland was one of the few assets that ended the year up despite the sobering market crash. One of the best assets to own during times of crisis, and especially during a period of growing inflation, is farmland.
When investigating agricultural opportunities, consider …
- Global markets > local markets. When investing in a real asset like agriculture, global markets are more important than local markets. Investigate global demand for various agricultural products before checking out local specifics.
- Aim for sustainability. Agriculture is often considered a steady investment … but only when crops can be sustained for generations without harming the land they grow on. You want investments that will be consistent for the long term.
- Consider the land. Based on your chosen crop, consider the natural climate, soil, and weather conditions that will be most conducive to profitability.
- Take a look at local factors. Although agriculture meets a global demand, investors need to consider local factors such as labor supply, land ownership rights, and tax climate.
Sound like a lot to figure out? As with any investment, it’s essential investors build a team of experts to manage and grow their investment.
Finding the right farmers and on-site management team is a crucial piece of a successful agricultural investing … and why syndicated investments can be a great option. Economies of scale attract quality farming teams and create greater returns. Passive investors buy a parcel of land without having to worry about hands-on, day-to-day operations.
Agricultural investments can be a great addition to your investment portfolio. Just be sure to plan how your chosen commodity fits into your portfolio. Some crops, like hardwood trees, are a great legacy investment, while other crops can provide more immediate cash flow.
Investing in agriculture can mean wildly different things … from coffee and cacao beans, to teak trees, to coconuts.
Below is a list of helpful resources. Do your homework … and then considering giving this “green” investment a shot!
Radio Shows
- Agriculture Investing – An Opportunity to Diversify Globally
- Farming for Profits with Agricultural Investing
- Farming for Profits Part 1 – Investing in Essential Resources
- Farming for Profits Part 2 – Cash Flow vs. Legacy Investing
- Sweet Returns with Low-Impact Tenants
Reports & Articles
- Citrus Fruits in Paraguay – Investments that Grow Naturally
- Squeezing Income from Oranges in Paraguay
- How To Own a Piece of Your Own Latin American Coffee Farm
- Planting Your Flag in Panama
- Precious Teakwood: What You Need to Know
Market Field Trips & Property Tours
Boots-on-the-Ground Teams
- AgroNosotros – Agricultural Investments
- International Coffee Farms – Latin American Coffee
- Paraguay AG Invest – Paraguay Oranges, Greenhouses and Cattle
- Peini Cacao Plantations – Belize Cacao
- Teak Hardwoods – Panama Timber
Clues in The News
- Connected Agriculture Market 2019 – Analysis, Trends, and Forecasts to 2025 – July 31, 2019
- Bill Gates spends $171 million to buy huge swath of Washington farmland – October 1, 2018
- Farmland Values Hold Strong – September 25, 2018
- Agriculture boom now in the making, says Jim Rogers – January 15, 2018
- Around The World With a Timberland Outlook – December 7, 2017
- Top 15 Caffeine Addicted Countries with the Highest Coffee Consumption in the World – November 16, 2017
- My Post-Hurricane Loss, Your Profit: Buy WOOD – September 17, 2017
- Uganda seeks to earn more from coffee happiness – August 20, 2017
- Timber provides certainty amid tax reform questions – August 9, 2017
- Backing agriculture and the rural economy – August 9, 2017
- As demand rises, local coffee could emerge as key national export – August 1, 2017
- Who really owns American farmland? – July 31, 2017
- Record Coffee Earns $601 Per Pound at Best of Panama Auction – July 26, 2017
- How farmers are minting millions from eucalyptus – June 30, 2017
- How to Invest in Farmland – May 26, 2017
- S. farmland becoming a hot commodity as investors buy up acreage – May 4, 2017
- Forests Are a Treasure. But Are They Good Investments? – January 13,2017
- Why Farmland Has Become a Popular Alternative Investment – October 3, 2016
- Investors pour money into agriculture land, see good returns – May 4, 2016
- Investing In Farmland: REITs, Stocks And Partnerships – April 3, 2016
- NAR Field Guide to Agricultural/Farm Land – April 2016
- Why Invest in Hardwood Forests? – March 15, 2016
- Jim Rogers: Choose Farming for Your Family and Finances – December 14, 2014
- Timber! Why the rich are buying trees – November 24, 2014
- Dirt Cheap? Investors Are Plowing Into Farmland, Here’s Why – September 23, 2014
- Farm Land Rush – September 2011
- For Some Investors, Money Grows On Trees – May 27, 2007
Considering Coconut Farmland to Grow Your Wealth
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 alternative, 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.”
Global diversification
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.
Consider coconut
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.
More From The Real Estate Guys™…
- Sign up for The Real Estate Guys™ Free Newsletter and visit our Special Reports library.
- Don’t miss an episode of The Real Estate Guys™ radio show. Subscribe on iTunes or Android or YouTube!
- Stay connected with The Real Estate Guys™ on Facebook and our Feedback page.
The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training and resources to help real estate investors succeed.
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