37. Investing in International Farmland with Peter Badger
Peter Badger is the Chief Strategy Officer at Farmfolio. Their mission is to make farmland ownership easy for everyone. Peter has been an avid real estate investor for years and educator with a current focus on overseas farmland. In this episode, Peter discusses why overseas farmland is a worthy investment, how it works and why the returns are better than U.S. farmland.
Peter talks about multifamily and overseas farmland – the two asset classes which thrived for him during pandemic. He also discusses the importance of real assets because the stock market is so cyclical and the benefit of investing in farmland as an asset class that is completely non-correlated to other assets. He mentions that the core of his wealth is in real assets like multifamily and farms.
Peter talks about his multifamily portfolio and the why he still invests in apartments but has now changed his focus to farmland as he can have more control and no tenant related risks. He mentions that many high wealth people have up to 25% of their wealth in farms and forestry. He likes the Farmfolio approach because the farms are managed in the entirety but can be broken into individual lots and can be sold individually and managed under a Farm Owners Association. The returns are combined with all plots on the farm, so you get the average of the whole farm rather than just from your plot. He also mentions that there is a secondary market for the farms, so you can sell a performing farm plot to a new investor.
He explains that farmland and labor in the United States are more expensive than overseas which lowers returns significantly. There are also improvements that can be made to the land and processes because many overseas farms are not as sophisticated and the farmers don’t have the expertise to export to the U.S. where they can get higher prices for their products.
Peter talks about the importance of choosing the right country, making sure that you understand the property rights, how to take title, foreign ownership rules and capital controls of money coming in and leaving the country. He also discusses how to analyze the deal, concentrating on sponsor, market and asset class.
Podcasts he recommends:
Risk Matrix he mentioned can be accessed here: https://tinyurl.com/farmlandanalysismatrix
To connect with Peter email him at peter@farmfolio.net or go to www. farmfolio.net.
If you would like to contact Jim Pfeifer, you can email him at jim@leftfieldinvestors.com or if you would like to find out more about Left Field Investors go to www.leftfieldinvestors.com.
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