On this episode of REI Mastermind Network, our guest, Artem Milinchuk, discusses the intricacies of investing in farmland. He starts by explaining why debt is not accretive in farmland due to low interest rates and how returns in the rental model are about 6-7% net IR after fees. He then delves into the direct operated model, which offers a higher return of 9-11% with the potential for even higher returns. Milinchuk emphasizes that investing in farmland is seen as a defensive move against inflation, as farmland does not depreciate and can appreciate with proper soil care. Throughout the episode, Milinchuk provides valuable insights on selecting target markets for investment in farming. He highlights the significance of vibrant farmer markets and renting land in the United States, revealing that 140% of farmland is rented out in the US, and 98% of farms are owned by families. Renting land has been a common practice for decades, allowing farmers to create multiple revenue streams. Milinchuk explains how they focus on areas with existing vibrant ecosystems, using California's almond production as an example. Additionally, Milinchuk explores the unique aspects of farmland investing, from the long-term yields of orchards and trees to the various strategies investors can pursue. He emphasizes the importance of location and discusses the advantages of US agriculture, including excellent infrastructure for exporting products. Milinchuk also touches on their internal technology called terra, which aids in finding, analyzing, underwriting, transacting, and managing land. Furthermore, Milinchuk addresses the challenges of educating people about farmland and how it is often overshadowed by trendy investments like NFTs and Pokémon cards. He advocates for farmland as a stable and reliable asset class, comparing it to "salad" while dismissing trendy investments as "gummy bears." He shares the story of a crowdfunding deal for an apple orchard development in Vinatchi, Washington, called Galaxy Orchard, which has become the largest crowdfunding deal in the US. As the conversation progresses, Milinchuk emphasizes the importance of proper capitalization, weather considerations, and the significance of finding the right operators and tenants. He shares experiences dealing with unique tenants and highlights the importance of great partners in the direct operated model. Milinchuk concludes by emphasizing the value of hiring and retaining exceptional talent, drawing inspiration from the success of OpenAI and the power of small dedicated teams. Tune in to this episode of REI Mastermind Network to gain valuable insights into the world of farmland investing and learn from the expertise of our guest, Artem Milinchuk.

Connect with Artem Milinchuk: https://farmtogether.com/