Mon, 9 July 2018
#196: For under $20,000, you can own deeded agricultural property. It produces cash flow from the crop harvest.
Food is an innate human need. Earth’s population grows by 200,000 people daily.
But arable land has decreased by 1/3rd in just the last forty years!
You can invest in half-acre parcels of coffee and cacao for appreciation and cash flow.
The parcels are turnkey-managed by an expert team including agronomists, soil scientists, biologists, a value chain analyst, and laborers.
These are higher-grade coffee and cacao varietals - specialty coffee and fine-flavored cacao.
Coffee is the second-most traded commodity in the world (oil is #1).
We discuss the benefits, risks, cash flow, and your projected ROI.
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Listen to this week’s show and learn:
01:14 The world needs food. It’s population grows by 200,000 people daily. Arable land decreases.
06:15 Previously, this guest appeared with us on GRE Episodes 28, 60, 125, 157.
07:40 Coffee tree parcels in Panama, cacao tree parcels in Belize.
11:07 Team of farm management pros. Soil science.
18:13 On-site handling adds “single estate” value to beans.
21:16 Who is your end consumer?
27:18 Annual cash flow from annual harvests.
31:20 Trees don’t vacate property. Tenants do.
33:20 11% return plus potential appreciation.
34:00 Half-acre parcels available now: $18,900 coffee, $25,725 cacao.
35:18 Commodity prices.
37:36 Attend a coffee and cacao field trip.
39:37 The world has about 200 nations. How many do you own property in?
Get Rich Education is brought to you by Ridge Lending Group, Apartment Investor Mastery, Norada Real Estate, and Producers Wealth.
Welcome to GRE. From Toledo, Belize to Toledo, Ohio and across 188 nations worldwide, this is Get Rich Education. I’m Keith Weinhold.
We need to talk about what really could be one of the most important issues of our time today.
Now, we typically talk about providing residential housing in the United States here...and because shelter is an innate human need - and that need is still underserved in a lot of markets today.
Well, when you think about food, shelter, and safety - beginning with food - let’s pull back and look at the global picture.
I know this sounds incomprehensible if you didn’t already know it, but 200,000 more people are here on earth today compared to how many were here yesterday.
Yes, every single day we add 200,000 more people to the planet...and just imagine them all sitting down at a dinner table tonight - and none of them were there are at the world dining table just yesterday.
The earth’s population is expected to swell from 7 & a half billion today, and by the end of the century, we’re expecting more than 11 billion.
So the innate need for human calories isn’t just here to stay, it keeps growing fast...every day.
At the same time, in just the last 40 years, earth has lost 1/3rd of it’s arable land - and that fact alone is unfathomable to some people.
Now, it actually gets even more critical.
Among this growing population and less arable land, humans are consuming more calories on a per capita basis, and as societies develop, they demand a higher quality calorie.
So, needless to say, demand for higher-end and gourmet items is accelerating even faster than those average quality items that we would call generic or commercial-grade.
Well today, we’re talking about agricultural real estate investing - and in two products in particular - coffee, and cacao. Cacao is the base product for chocolate. Both coffee and cacao are produced on small trees in central America.
...and in both cases, it is high grade.
Now, in coffee, the high-grade term is speciality coffee - and it’s become quite sophisticated. In fact, there’s a 100-point coffee grading scale, specialty coffee must score 80 point or higher.
In cacao, the term for the higher-end...I guess...varietals is “fine-flavored” cacao. So rather than a milk chocolate bar, think about those bars with maybe 70% or 80% cacao content that come in a fancy wrapper with some gold-colored foil.
Now, can coffee be considered a food? I’m not really sure. But it sure has demand. When you’d get off a plane at the airport even at the height of the Great Recession a decade ago, you’d still see the long line at the coffee shop…
...and that line wasn’t ANY shorter - even in the face of the worst recession in 70 years...so the demand is durable.
Coffee and cacao have a production advantage because they’re non-perishable products. Just consider the risk in the inherent supply chain difficulty of producing grapes or lima beans - or something that’s going to spoil.
Now, I’m primarily a residential real estate investor - you probably are too - and a lot of my property is in the U.S. On a global scale, there are good deals here.
Now, on a basic level, I like that housing is real and has a sustainable human demand. Well, those same things can be said for agriculture.
In fact, agriculture seems like a rather natural thing to invest in - agriculture even predates modern housing.
One interesting distinction, I think, is that your rental housing is typically owned & consumed in the same place. For example, you own a Cleveland, OH rental house and your tenant lives there in Cleveland too - consuming that end product.
But in agriculture, you might own coffee tree parcels in Panama, or cacao tree parcels in Belize, but your end user might be consuming the product in California or the Netherlands.
Now, when it comes to a trusted team, over the last few years here, my relationship with this provider has really grown.
...and you know, it’s interesting with personal relationships or business relationships, they say that “Time will either promote you or expose you.”
….and I think that it’s promoted the provider here - and we’re going to talk about that.
I know that I’ve told you on the air before that I am an investor in this myself. (Talk in-interview that mine has appreciated.)
Today’s guest, the company Founder that provides these agricultural opportunities, was with us here on four prior Episodes #28, #60 which we did from the fringes of the coffee fields in Boquete, Panama, Episode 125, and Episode 157.
It’s been remarkable to see them grow over time and they’ve really exceeded my expectations in both industry influence and the size that they’re growing.
I have visited both places - Boquete, Panama where they grow the coffee and Punta Gorda, Belize where they grow the cacao...and it’s really been fascinating. (give years in interview)
Our guest joins us from Boquete, Panama today...
Yeah, it really all starts with a great team there.
When you become a real estate investor, you may very well become a “collector” of real estate, and when you gain the realization that owning your collection in diverse geographies and diverse use types hedges your risk, you start to see how this might fit in.
With this, In one fell swoop, you are an Int’l RE Investor. It’s not a fund. Your name is on the deed...and at the same time, you own producing agricultural land.
The United States is a pretty big, broad place. But as a collector of diverse RE, consider that there are 200 nations in world & it makes increasing sense to be invested in something real in more than just 1 nation out of 200.
Now, you can buy an acre of farmland for less that what David talked about. Of course, you’re not just buying farmland here. You get more than the dirt.
You have use and operation of facilities from bean processing facilities to a cupping and grading laboratory and all of the labor and expertise like biologists, agronomists, soil scientists, a Value Chain analyst, farmers and laborers.
...and a few years ago, I used to think of the provider as a boutique type of operation. But with they way that they’re adding employees and expertise, I don’t think of them that way anymore.
You know, years ago, I thought my first int’l investment might have been in Mexico just because it is closer.
But I found that, it’s harder to deal with on many levels...and Mexico is really kind of the opposite of a tax haven, with more onerous tax than the US.
You’re probably only 1-2 time zones from Belize & Panama, or you might even be in the same time zone.
Now, most people participate in this opportunity...sight unseen...before they see the parcels. I know that a lot of you have visited Panama & Belize and have been on their tours.
I really suggest going on one of their educational field trips - they really treat you well with complimentary meals, ground transportation, excursions.
...and you can do that whether you’re an investor or not. I bought my parcels more than a year before I ever actually got on the ground and visited them.
If you go visit the Panama coffee farms, I suggest setting aside at least two extra days to see Panama City and the Panama Canal if you like. Just such a grand trip that way.
You’ll find the weather more pleasant and agreeable once you get up into the highlands - where they grow the coffee - in Boquete where it’s cooler.
Now, who would this opportunity NOT be for. It is not for you if you’re devoted to putting every one of your dollars into getting out of the Rat Race in 18 months.
Really, any long-term buy-and-hold real estate wouldn’t fit you then...and I think David made that pretty clear.
People in their 20s, all the way up to their 70s participate. David mentioned that it’s a legacy investment - some people buy it & put it in their child or grandchild’s name.
In fact, I’ve said before that is probably the only real estate I own anywhere - that I have no plans to sell...and I would buy it again. In fact, I might buy more.
When you’re thinking about investing, you might as well start from the ground up - literally - that’s just what farming is.
Next week, the Investor of the 401(k) Retirement Savings Plan, Ted Benna will be here with us.
Then after that we’re going to talk more about today’s rental housing market trends, and later, have an everyday listener like you join us on an upcoming episode - he’s from Michigan - so he can tell us how putting Get Rich Education ideas into practice has changed his life.
Well, today with agricultural real estate investing, we probably touched on at least a few things that you found thought-provoking and will want to know more about.
We are Get Rich Education, so we’re education-first and if you find the opportunities interesting, then I highly encourage you to check out the coffee and cacao Investor Reports…
...at GetRichEducation.com/Coffee or GetRichEducation.com/Chocolate.
Until next week, I’m Keith Weinhold. Don’t Quit Your Day Dream!