US Farmland has historically outperformed most asset classes and other forms of real estate, making it a prime opportunity for savvy investors. Unfortunately, buying and maintaining farmland directly can be extremely difficult without local knowledge, management, and large investment commitments.
“AcreTrader solves these issues by providing transparency, flexibility, and ease of use to people wanting to invest in farmland while handling all aspects of administration and property management, from insurance and accounting to working with local farmers and improving soil sustainability,” said Acretrader Founder and CEO Carter Malloy.
The system takes the guesswork out of farmland investment, helping investors to buy shares of high-performing farmland to earn passive income.
“AcreTrader carefully reviews each farm, selecting less than 1% of the total parcels considered, then places each farm offering in a unique legal entity and offers shares to investors through our online platform,” said Malloy.
Farming was a part of life for Malloy, who grew up in a farming family in Arkansas. His lifelong passion for investing, agriculture, and conservation led him to create Acretrader.
“After spending the bulk of my career in the institutional investment space, and realizing most people had no great way to access farmland investing, it seemed like an obvious, natural, and necessary solution,” said Malloy.
Acretrader is a unique company, from the asset class to the investment process itself. However, what really makes Acretrader stand out is the diverse team of individuals behind the scenes who keep everything operating smoothly.
“The backgrounds vary across multi-generational farmers, farm appraisers, farm managers, technologists, and professional investors. But put simply, we know dirt,” said Malloy. “Our team has an incredibly strong background, and a sophisticated process for identifying, underwriting, and investing in farmland across the country.”
Acretrader team members are constantly looking for great opportunities to invest in U.S. farmland. Malloy said when these parcels are identified, they create a unique entity (typically an LLC) that will go under contract to purchase the farm.
“Through our online investment portal, investors can buy “shares” of that farm. Once the farm reaches 100% subscribed, the contract is executed, and the title transaction actually occurs. After that, AcreTrader handles all of the management and administration to make it a truly passive investment, and investors experience annual distributions from the rental income to a local farmer. Once the farm is sold, their investment and any appreciation is returned to the investor.”
Acretrader carefully curates each farm parcel featured on its online platform. Some criteria they use in this process include properties with good water access, strong soil makeup, and an attractive financial profile.
“We review hundreds of farms each month, and say “no” to the vast majority of the opportunities we see,” said Malloy. “The platform has a mix of both permanent crops (like almonds or apple orchards) and row crop offerings (like corn, rice, or cotton) throughout the country and typically announces new offerings every 1-2 weeks.”
Acretrader is based in Arkansas, a state that counts farming as its biggest industry. As such, the surrounding Fayetteville community has been receptive to the company.
“We have had an incredible amount of support from Arkansas residents, businesses, and investors, said Malloy. “We have actually purchased multiple farms within our home state, and love being a part of our local community.”
Malloy said the most challenging aspect of launching Acretrader has been the number of opportunities they have to say no to.
“Buying a farm is one thing. Investing in the right farms is something completely different,” said Malloy. “Many days you’ll find the AcreTrader website without a live offering to invest in. We’re well aware that not having inventory isn’t a great business idea, however we’re willing to suffer any one day without revenue because focusing on providing only the best opportunities to our investors is the most strategic way to build a business, and frankly, it is just the right thing to do.”
Acretrader is just getting started in its pursuit to democratize farmland investing, and the company is constantly looking for ways to enhance its brokerage operations.
Some future areas of expansion include more and larger offerings as well as whole farm transactions.
“I think the one thing we would like to leave anyone with who is considering farmland investing, or using the AcreTrader platform is that we are not advocating for farmland as someone’s only investment – rather that it can be a great addition to diversify a portfolio,” said Malloy.
“Diversification is the name of the game, and we believe that if someone looks at the history, returns, and consistency when it comes to farmland as an asset class, they’ll find it to be a truly unique asset class. AcreTrader just allows for better access to farmland investing than investors have ever had before.”