Usually, when we talk about real estate, the first scenario we imagine is regular houses in suburbs or properties near to big cities. However, it’s time to look at one of the oldest and most valuable asset classes in the real estate market: farmland. Our guest for today grew up in a farm in Arkansas, and ever since he was very little he got passionate about agriculture and conservation. Join us on this Income Hacker episode and discover how Carter Malloy’s went from being a successful managing director focusing on real estate research to founding the high-return low-volatility asset class, AcreTrader.
After finishing his bachelor’s degree in Physics, at the University of Kansas, Carter entered the investment world and worked for 5 years in a long and short equity firm. Soon he realized there are only two types of land: the one you can buy and speculate with, and the land that actually generates income. Malloy has always been an entrepreneurial soul and is convinced that you can start investing in farmland with less than 5K dollars and generate stable returns.
In this Income Hacker episode, Carter Malloy will reveal to us why volatility is a crucial factor in this investment class; how a nearby farm that loses its crops could be actually beneficial for a farmer; the importance of water accessibility to maintain a farmland and the reason why there are around 30 billion USD of assets invested in farmland (even if it’s not a get-rich-quick scheme).
“You make money from renting the land to the farmer and from the appreciation of the land, when you add both it gets attractive for farm investors.” - Carter Malloy
Podcast summary:
02:54 - Why investing in agriculture is not a horrible idea and how farmlands have created stable returns to its investors.
04:55 - The endgame of farmland investing: rent + appreciation.
07:05 - How Carter can prevent you from investing in the wrong farmland.
09:43 - The sponsor deal structure in farmland investing.
11:41 - Agreements with farmers: who owns the crops and the land?
16:05 - Risks of owning a land you should take into consideration.
20:58 - Farmland liquidity: how Carter can help you sell your property.
22:37 - How volatility in farmland could end up being beneficial for you.
24:08 - Debt, equity, and leverage: why farmland is not a get-rich-quick scheme.
28:23 - The numbers don’t lie: why even Bill Gates is interested in farmland.
29:53 - How to lose a ton of money in farmland: statistics you should consider.
35:03 - How to start investing in farmland with 5K USD.
Connect with Carter
Follow AcreTrader on Instagram - @acretrader
Follow AcreTrader on Twitter - @acretraderinc
AcreTrader: Investing in Farmland
Want to learn more?
Join Ryan on our next webinar to learn how you can start real estate investing with The Investor's Edge.
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