How It Works

We select a tiny fraction of the parcels we review, ensuring each offering is of the highest quality. Each farm and its legal title are placed into a single purpose entity (usually an LLC).

• The single purpose entity establishes a real estate contract with the land owner and is provided time to complete due diligence, legal work and raise funds on AcreTrader. The typical time period for this is 30-90 days.

Each entity is divided into fractional shares. Investors may purchase any amount of shares at or above the minimum investment.

• Our online process can be completed 100% electronically. Or, if you prefer, feel free to contact us for help through the investment process.

Acretrader Management handles all aspects of administration and property management, from insurance and accounting to working with local farmers and improving soil sustainability.

• We work closely with our farmers and external managers to help with best practices, technological improvements, sustainability, and access to capital. Our goal is to improve our farmers’ lives and ease of doing business in every way possible.
• AcreTrader tenant farmers pay cash rent, a common arrangement between farmers and landowners (nearly 40% of all U.S. farmland is rented or leased).
• The single purpose entity usually receives the rent in advance of planting season, so we believe investors take on low crop risk, weather risk, etc. The rent is kept in a unique bank account held by the entity to reserve against any taxes owed, repairs or potential capital improvements until the anticipated net cash distributions in December.
• We charge a flat annual administration fee of 0.75% (of overall farm value) that is typically deducted from the income of the farm prior to the making of any cash distributions.

When available, AcreTrader disburses excess annual income to investors in each entity. Historically, this asset class has an unlevered yield of 3% - 5% for lower-risk properties.² Note that this cash yield is in addition to expected long-term value appreciation.

• We expect to pay out cash distributions each December or such other dates as specified in the offering materials, when available, to investors in each farm. We will typically provide any necessary tax documentation by early March of the following year,in advance of tax season.

The single purpose entity generally expects to hold ownership of the land for 5-10 years. While returns cannot be guaranteed, upon the sale of the land, to the extent available, investors may expect to receive any applicable previously unreturned principal plus their pro rata share of any appreciation of the land during the holding period.

• At the terminal date, the subject farm will be sold and all net proceeds will be distributed on a pro-rata basis, at which point investors will realize any additional gains from the appreciation in land value.

¹ Distributions paid are not solely based upon performance and are not guaranteed in frequency or amount. Distributions will be paid from net investment income, offering proceeds, borrowings, or reimbursable expense support, subject to certain conditions being met.

² Source: USDA NASS Historical Land Values and Cash Rents over a 50-year period.