Investing in Farmland as a Stable and Profitable Asset With Rob Moore

In this episode of The Same Day Podcast, host Mat Zalk sits down with Rob Moore, General Manager at AcreTrader, to discuss investing in farmland as a stable and profitable asset. They explore why farmland offers consistent returns and portfolio diversification, how AcreTrader lowers the entry barrier for investors, and the rigorous process behind evaluating farms. Rob also shares how water rights and organic transitions influence long-term value.

Investing in Farmland as a Stable and Profitable Asset With Rob Moore

Rob Moore is the General Manager at AcreTrader, a platform that lets investors access farmland as an asset class and helps farmers source capital. He previously worked in farm and livestock operations, investment and real estate management, and as an investment analyst specializing in row crop farming, sourcing, and acquisitions. Before joining AcreTrader, he also worked as a senior analyst for a forensic accounting firm in the waste and recycling industry. Rob has several FINRA licenses (Series 63, 79, 82). Since Proterra Investment Partners acquired AcreTrader, he has been leading the AcreTrader team under Proterra’s ownership.

Here’s a glimpse of what you’ll learn:

• [02:38] How early hands-on farming experience shaped Rob Moore’s passion for agriculture
• [08:27] Why AcreTrader makes farmland investing accessible to accredited investors starting at $15,000
• [16:16] The philosophy behind keeping AcreTrader investments unleveraged for predictable returns
• [18:47] Why farmland deserves a bigger seat in investors’ portfolios compared to traditional real estate
• [19:51] How AcreTrader maintains 100% tenant occupancy and upfront rental payments
• [24:20] How AcreTrader underwrites deals and why less than 5% of farms pass the screening process
• [26:29] Why water rights are critical in farmland investing and how AcreTrader evaluates them
• [38:51] How AcreTrader supports organic farming and transitions land to organic certification
• [47:25] What misconceptions people have about modern farmers and the sophistication of today’s operations

In this episode…

Farmland is quietly becoming one of the most reliable ways to grow wealth. With limited supply and steady demand for food, this asset class offers long-term growth that traditional investors often overlook. But what makes farmland such a stable and profitable investment?

According to Rob Moore, a seasoned farmland investment expert, the value of productive farmland has consistently appreciated about 6% annually for decades while providing 2-4% cash yields. He highlights that this growth is uncorrelated with the stock market and resilient during economic uncertainty. By breaking million-dollar properties into affordable shares, farmland investing is no longer reserved for large institutions. Rob explains how strong underwriting, careful attention to water rights, and long-term tenant partnerships help deliver predictable returns and preserve land value for generations.

Resources mentioned in this episode:

• Mat Zalk on LinkedIn
• Yonatan Schmidt on LinkedIn
• Keyrenter Property Management
• Keyrenter Property Management in Tulsa | Oklahoma City | Arkansas
• Keyrenter Property Management email address: [email protected]
• Rob Moore on LinkedIn
• AcreTrader
• “Using the All-In-One Loan Strategy To Pay off Properties in Half the Time With Miles Thompson” on The Same Day Podcast
• “Why Credit Union Voices Matter in Legislation and Regulation With Keili McEwen” on The Same Day Podcast
• Financial Industry Regulatory Authority (FINRA)
• Cambria Investment Management
• The Meb Faber Show
• Alto
• Equity Trust
• The Entrust Group

Quotable Moments

• “Farmland is a wholly separate asset class and historically has not moved in tandem with commodity prices.”
• “We spend more time doing diligence on water than everything else combined when we are buying an irrigated piece of property.”
• “Having a piece of your portfolio that is uncorrelated with times of uncertainty makes a lot of sense.”
• “Farmers are not a monolith, and they are running complex multimillion-dollar businesses with incredible skill.”
• “Make sure you have a really clean understanding of what you are investing in and be skeptical.”

Action Steps

1. Diversify your investment portfolio with farmland: Adding an uncorrelated hard asset helps protect against market volatility and economic uncertainty.
2. Conduct thorough due diligence on water rights: Secure and senior water rights safeguard long-term land value and ensure reliable crop production.
3. Choose unleveraged farmland investments: Avoiding debt reduces risk and delivers more predictable returns even during inflationary or unstable markets.
4. Partner with reputable farmland platforms: Working with experienced managers provides professional underwriting and access to high-quality agricultural properties.
5. Understand and monitor all investment assumptions: Reviewing financial models and asking hard questions ensures you know exactly how returns are generated.

Sponsor for this episode…

Keyrenter Property Management:

This episode is brought to you by Keyrenter Property Management.

Keyrenter Property Management is a full-service property management company that helps clients buy, renovate, and operate real estate assets.

The team helps clients build wealth while taking the headache out of property management.

That’s why, no matter what rental you have — single-family homes, condos, townhomes, or apartments — they can give you the management solutions you need.

To learn more about their services, go to https://keyrenterpmc.com/ or send them an email at [email protected].

Episode Transcript

Intro 00:04

Welcome to The Same Day Podcast, where we discuss driving incremental business growth and other topics related to real estate, property management and entrepreneurship. Now to the show at hand.

Mat Zalk 00:21

Mat here. I’m the host of The Same Day Podcast, where I connect with top business leaders and real estate experts. Past guests include Miles Thompson, a real estate investor and investing coach to others. And he was talking about portfolio optimization strategies. And Keili McEwen, who is the vice president of governmental affairs at Tinker Federal Credit Union.

And she was discussing advocacy and lobbying for small and medium sized businesses. Today’s episode is brought to you by Keyrenter Property Management. At Keyrenter Property Management, we are a full service property management company helping our clients buy, renovate and operate real estate assets. We help our clients build wealth while taking the headache out of property management, but sometimes deals Yields aren’t to be found. They don’t meet your criteria. And so we interview people like Rob Moore who I’m going to introduce here in a second, because he’s got other opportunities in the farming space, some in syndicated real estate deals related to self storage and a bunch of other stuff. 

 But it doesn’t matter what you have in terms of rentals, single family homes, condos, townhomes, apartments. We’ve got the management solutions that you need. Go to keyrenterpmc.com or email us at [email protected] to see if we manage if any of our seven markets where we manage line up with your your rental properties. 

 Our guest today is Rob Moore. Rob serves as the General Manager of AcreTrading, having previously held roles as the Director of Farm Operations, Investment manager and investment analyst specializing in row crop farming, the sourcing of IT and its acquisition. Prior to joining AcreTrader, Rob worked as a senior analyst for a forensic accounting firm in the waste and recycling industry, preceded by full time work in livestock operations and real estate management. He holds a series 63, 79 and 82, those licenses with the FINRA, and he’s got a degree in philosophy and religion from Rollins College. Rob Moore, welcome to the show. 

 How are you?

Rob Moore 02:17

Hey, man, I’m doing real well. Thanks for having me.

Mat Zalk 02:19

It’s great to have you here. I want to talk about AcreTrader for a second. Certainly the subject of this pod. But before we do that, why don’t we start with just a brief introduction to you, to beautiful Fayetteville behind you, perhaps. And and kind of what got you to this point?

Rob Moore 02:38

Yeah, absolutely. So I’m Rob Moore, I’m the general manager here at AcreTrader. My background is a little bit less traditional than a lot of people in the investment space. I got out of college, I had a double major in philosophy and religion, which is not really a go get you a job type of degree. I sort of haphazardly ended up farming, so I actually moved to Arkansas to work on a farm.

I worked on an integrated livestock operation for a couple of years, and during that process fell in love with agriculture. I had a brief stint where I thought that I would take that on full time, decided that that was as a first generation individual with no farm inheritance associated with me, decided that was not the best plan to then build my own career. Left agriculture, built a career a little bit in real estate, but largely in actually waste and recycling. So I ended up in the waste and recycling industry after some time in real estate, did that for several years and ended up on the forensic accounting side, working for a consulting firm. So got really into the way that the contracts work and money moves. 

 Always wanted to be back in agriculture and settled in northwest Arkansas, in Fayetteville, behind me for the location, much more than any specific job, I just I’m in love with this area. I’m in love with the Ozarks. When AcreTrader first started, it was a startup founded in 2018. And as it began to to really ramp up and grow in 2020 and 2021, they were looking to hire. I was looking to make a change at that time, had some real estate background, had some AG background. 

 Came on again pretty early on in the AUM growth of the organization. Been here about five years now. We have scaled we have exited the original parent company, sort of start up parent company, and now are wholly owned by Proterra, which is about $3.5 billion asset manager out of Minneapolis. But the whole team stayed together. We moved next door, actually. 

 So we’re still next door to to our our old sort of parent company that that now runs a data platform and have really enjoyed it. I mean, it’s been a, I think, a really good marriage of small business, real estate, agriculture and then rural communities, which are things that I come out of and care a lot about.

Mat Zalk 04:51

Yeah. Before we move into AcreTrader, tell us a little bit about integrated farming. What does that mean? Sounds cool.

Rob Moore 05:00

Yeah, yeah. So what we were doing when I took my first agricultural job, it was for a farm that ran a little bit of everything. So they were trying to be a demonstration of a farm on a smaller scale. We’re talking a couple hundred acres rather than thousands of acres. But looking at the opportunity to sustainably integrate multiple types of livestock.

So, you know, you’re running cattle and then you follow them with sheep, and then you follow them with chickens. And working on integrating multiple different revenue streams and livestock streams. There was also a large organic garden associated with it. And thinking through and testing unique ways to maximize both productivity and land health. So we looked a lot at, you know, when you’re grazing. 

 Functionally, rotational grazing was was one of the key principles we focused on. So instead of letting cows stay on a piece of grass until they eat it all the way down to the bottom and suck everything out of that. They get most of their nutrients off the top of a piece of grass, right? So they take the first four inches of the grass. You bring the sheep in, they’re going to take the next four inches of grass. 

 Then you let it sit. You don’t eat it all the way down to the ground. You run chickens over it. Who are going to tear it up, dig it, help aerate it, turn over that soil there. Then their waste is then going to serve as fertilizer and so it’s more sustainable. 

 Regrowth happens a lot faster. It’s more labor intensive. Right. So it’s a lot more work. You’re running a lot of temporary fencing and wire. 

 But for me, coming out of college and not having a ton of like hands on ag experience, it was a really good crash course. I learned about a ton of different systems of production in a very short amount of time. And again, it was more of a of a research facility than it was a maximum, like trying to maximize profit. So I had the opportunity to learn in an environment where, you know, typically without any experience, you’re not going to get those opportunities. And it was a pretty informative period in my life.

Mat Zalk 06:56

I mean, did the did the other folks working at the farm look at Rob more double major religion and philosophy and go, what in the heck are you doing here? Was everybody else like from the from the local A and M’s?

Rob Moore 07:08

Yeah, it certainly, you know, my my boss at the time and several of my colleagues were out of, you know, really intelligent people. One of my closest friends at the time there, you know, Michigan State ended up with a master’s in small ruminants. And yeah, and I know a whole lot about dead people that wrote books. And so it was a very yeah, I certainly think a lot of my career has been stepping into spaces where I’m I get to learn new things and apply concepts. And I mean, like the one as much trash as I talk about, you know, having a liberal arts degree in philosophy, the one thing I did learn at a really high level was how to think conceptually and solve problems.

And ultimately, you know, behind that it’s just learning facts and understanding systems and then applying that across different and business revenue streams and agriculture across different, you know, animals and details.

Mat Zalk 08:00

I just can’t think of that many other places where you could have landed, where you would have combined such so brilliantly the skills that you have. I mean, the, the AG, the finance, the real estate. I mean, that’s just what a beautiful marriage of things to end up at AcreTrader. Which brings us to AcreTrader. For people that haven’t heard about AcreTrader, how do you describe the company?

Rob Moore 08:27

Sure, a very simple level. AcreTrader is offering access to invest in farmland at a much lower entry price than traditionally has been the case. So on one side of the equation, you have the investor, right? We’re looking to serve investors by providing the opportunity to invest in farmland and the entry price on that. Instead of needing $1 million to go out and buy a farm, put all your eggs in that basket.

Were then breaking that down into shares of an entity, typically an LLC. You’re buying shares of that entity that own the farmland, and the minimum shares $15,000. So we drop the price down to $15,000. You can invest any amount above that. But most investors on our platform are then looking to say, okay, I want to allocate a certain amount of my portfolio to farmland, and I’m more than happy to talk about why that might be a good idea. 

 We can then offer an immense amount of diversification within that right. We have funded 140 farms on the platform. So, you know, you think about with $1 million, you can buy 180 acre farm in Minnesota, or you can be partial owner of 65 farms covering tens of thousands of acres all across the United States. The other side of the equation is the agricultural side. So we’re working with farmers that are looking to scale their business. 

 Ultimately, no farmer in full production farm or full time farmer is going to own all of their acreage. They’re going to have leased acreage. They’re going to have owned acreage when they have opportunities to rent ground that is being leased, but they’re not in a position to buy it. We’re a great partner. We can come in. 

 We offer really favorable lease terms to operators in exchange for opportunities to buy ground at favorable prices and core areas. So our platform exists to bring the entry level bar for farmland. Investing from seven digits down to five is a really simple sort of level, what we’re looking to do.

Mat Zalk 10:21

And just generally, do you do any farmland that people might consider sexy Napa Valley? I can’t even think of another one besides Napa Vineyards, but do you have some of that product?

Rob Moore 10:34

What’s sexy for us may not be sexy.

Mat Zalk 10:37

There’s going to be there’s going to be an IRR component for sure. The financing side, the finance side.

Rob Moore 10:42

I would say, you know, so Napa functions a little bit different. That’s that’s what I would consider like boutique investment product. We’re fun. We’re focused more on the fundamentals. That said, like for instance, where the next farm we’re going to have up on the platform we just funded a farm in, or we might have 15 or 20 grand left.

We’re about to finish up funding on a farm in Indiana. The next farm coming up is in the Coachella Valley of California. That’s going to be a vegetable farm. So this is a lettuce farm. It is direct to producer US grown lettuce. 

 So we certainly provide opportunities to invest in the things that you eat. We also have grain farms. So you’ll see opportunities to invest in corn and soybeans and cotton and wheat and peanuts, things like that. But we we also do, you know, potatoes, sugar beets, onions, lettuce, carrots, you know, all sorts of vegetables that are domestically produced. We try to find opportunities.

Mat Zalk 11:33

And does that mean that an investor is going to become obsessively obsessed over the current spot price or futures price of like, pork belly or sugar or anything. I guess we don’t produce that much sugar, but like of of lettuce or corn or anything traded on the Mercantile Exchange.

Rob Moore: 11:49

It’s a really good question.

Rob Moore 11:51

The short answer is no. So our product is specifically about farm land. So while the the products that are grown on it matter, right? I mean, ultimately that’s being leased out. Your exposure is the investor to that is very low.

Mat Zalk 12:03

They’re going to pay the same amount of rent right.

Rob Moore 12:05

Oh yeah. For sure. It is a tenant lease agreement with the farmer. If you zoom out a little bit, farming is a very, very boom bust business. Right.

So as a farmer you have an immense amount of variation year over year in profitability. You have changes in seed costs and input and fertilizer costs. Commodity prices are completely outside of your control. Weather is completely outside of your control. Government regulation, the farm bill, on and on and on and on. 

 You have millions of dollars in equipment locked up, you have X amount of acreage, etc. you’re going to have great years. You’re going to have really rough years. Farm land is a wholly separate asset class and historically has not moved in tandem or in alignment or correlation with commodity prices. So the way to think about farmland investing is we have a limited supply of arable or farmable acreage in the US, right? This is a single bucket. 

 We are losing depending on which data set and time period you’re looking at, anywhere from 1 to 4 million acres of farmland every year to urbanization. Right? We’re turning most of these into neighborhoods. So you have a completely limited supply. That supply is shrinking. 

 Our population grows. It shrinks. You cannot create more farmland. Yeah. Right. 

 At a really core level, once you take that out of production, that’s gone forever from production, that’s now houses that has driven a fairly consistent long term appreciation of the value of farmland. Just really fundamental supply demand. You can always build more houses. You can always build more commercial real estate. You cannot build more farmland. 

 So if you look at this over the last, I mean like 50 plus years, the compound average growth rate of the value of farmland is about 6%. So every single year, if you stretch it out over decades, that asset value has increased about 6%. Cash flow on row crop farming. So we’re ignoring permanent crops. This differentiation would be things you plant every year potato, lettuce, corn, cotton, etc. versus permanent crops pistachios, almonds, wine, grapes, things like that. 

 Let’s ignore permanent crops. They have a completely different risk profile for row crops. It’s a straight tenant lease agreement, right? Typically you’re going to cash flow somewhere between 2 and 4% as the investor on that product. So every year you’re getting let’s go conservative to be to be extra careful here. 

 Let’s say that you’re pulling in 2% per year on that investment. And behind that 2% that is growing in value about 6% per year. Right. Well, you hold that for 5 to 10 years. Historically, you’ve had a really consistent high single digits IRR in a completely unlevered environment in an asset class that is in no way correlated to the stock market. 

 It’s not correlated to, I mean, like all of these things that you think about securing a portfolio, it’s a hard asset. The idea of ground that we can high quality ground, we can grow food on, going to zero is unheard of. It’s never happened in history of our country. And so the role that it plays in the portfolio is that conservative hard asset backed base. And again, as an asset class it should be performing Mid-high single digits IRR. 

 We’ve been doing this for about seven years now. And we have 15 full life cycle exits. So 140 active 15. We have bought, managed and sold on investors behalf. And our weighted average IRR is just just shy of 14%. 

 The low end IRR was nine. The high end IRR was 30. So our goal as an organization is to provide alpha on top of that, just base level appreciation. That said, I market the asset class. I’m not out. 

 Like I certainly think we do it better. We’re the only ones really offering it in the accessible bite size that that we have. But the asset class, even just at beta, makes a ton of sense in a portfolio. Having a piece of your portfolio that isn’t levered, that isn’t at risk of of short term changes, that is uncorrelated with times of uncertainty both politically and economically, makes a lot of sense. Yeah. 

 And that’s really what we’ve been out there marketing.

Mat Zalk 16:09

What’s what is the philosophical origin of a zero leverage investment.

Rob Moore 16:16

Yeah. So to me if you think about the role farmland plays and you can lever up farmland purchases, right. Certainly depending on the interest rate environment, there’s all sorts of really strong reasons to do so. I think at a really core level, we spend a lot of time talking about how like farmland is intentionally a boring asset class. And this is intentionally a boring investment, right?

There should not be a lot of surprises. Yes, there should not be a lot. And I mean, you come out of real estate and particularly management, like surprises are the enemy of making money, right? Like that’s and this is a boring asset class. So it’s not that you can’t lever up investments in farmland. 

 Certainly people that are doing it by going out and buying their own million or 2 or $3 million farms almost always use leverage. I think from our perspective, there’s two advantages to ignoring that or not going that route. One is control, right? I am in no way controlled by a bank. I am no way, considering what the value of my money is outside of its core. 

 Tie into the farmland itself. So there’s no competing priorities on that front. The other side is risk, right? Ultimately, historically, farmland has performed extremely well as an asset class during times of inflation. Well, if you have leverage on that, you’re going to offset that. 

 Alpha that you’re gaining over the inflation within the marketplace by having leverage because your interest rates going to go up. Yeah. So in my mind again it’s not that you can’t do it successfully there. It’s that I want the tightest standard deviation of outcomes. I want to be able to say you’re going to get this. 

 And then, you know, everything within our control we do to drive that return that we said you’d get.

Mat Zalk 18:01

So for people that are typical single family real estate investors or commercial real estate investors, why would you argue that farm land needs a bigger seat at the table? You’ve you’ve highlighted some of them. One, it’s a way to round out the portfolio. There’s a reduction in volatility. There’s consistent 6% appreciation historically a 2% 3% cash on cash yield.

Is there anything that we haven’t touched on that would be a compelling reason for somebody, which I think those are compelling reasons. I mean, I would probably do this myself, but is there another is there anything else that’s a compelling reason why somebody would want to be giving more of their share of wallet to farmland?

Rob Moore 18:47

Sure. I think the the answer I usually give when I’m talking about this in comparison to any other form of real estate investment is I don’t have heartbeats and I don’t have toilets. Right? Like at a really simple level, right? I’m not exposed to human variable and I’m not exposed to infrastructure variables.

So, you know, we only buy high quality property in dense regions, right? You’re not going to see acai berries in southern Arizona here, right. This is really we buy agricultural ground valued only on agriculture ground. I’m not taking a bet on development I’m not taking a bet on this is going to be the next big neighborhood. I’m saying this has been growing lettuce in Coachella Valley for the last 20 years. 

 It’s going to keep growing lettuce in Coachella Valley. I’m not making any other play here. I do not have to worry about a tenant because let’s say worst case scenario, that tenant just says, you know what? I’m done. I’m out. 

 Walks off the farm one day, which would be a terrible financial decision for them, but let’s just assume that happens, right? I can within a week get five other individuals that would love to come in and take over that lease, that ground.

Mat Zalk 19:50

Wow. So low vacancy.

Rob Moore 19:51

Generally we 100% tenancy every single year on 40 000 acres every single year.

Mat Zalk 19:58

And just like very logistically, do farmers that are renting land put a security deposit down, is that something that actually happens, like.

Rob Moore 20:08

They pay their rent up front regardless of crop production.

Mat Zalk 20:11

For a year?

Rob Moore 20:12

Yeah.

Mat Zalk 20:13

Wow.

Rob Moore 20:14

And some of them will do split just to make their cash flow easier. But yeah we don’t we don’t have that’s the thing. Like when you work in residential of any form. Right. You’re worried about getting your rent checks.

Yeah sure. We manage 44,000 acres. We’ve been doing this for seven years. We’re were across 20 states. We have one time had one farmer not pay one half of one rent. 

 Check. Wow. And that was simply because they filed for bankruptcy and we had to like, deal with the court system because legally he wasn’t allowed to like it. Just we don’t have tenancy issues. I have 100% tenancy at all times. 

 The other side is infrastructure. That sounds like like, yeah, we have never gone out and had a capital call on an investment that that we manage ever.

Mat Zalk 20:54

But the the downside is that you can’t depreciate land. Right. So there’s no there’s no depreciation depreciation benefit for making this investment. So it’d be a solid it would be a solid investment to make out of a self-directed IRA or anything else that’s not subject to benefiting from depreciation.

Rob Moore: 21:10

That’s correct. And we do.

Rob Moore 21:11

Offer self-directed IRAs. We have three custodians that we’re integrated with, which makes it so much easier. Like we can do checkbook and stuff like that. That’s a pain for the investor. We have three.

We work with Alto Equity Trust and Entrust. If you have an account with them, you don’t even have to worry about it. All the paperwork is filed correctly with them when you make the investment on our website.

Rob Moore: 21:30

Yeah.

Mat Zalk 21:30

I use Alto. That’s great to know that you that you’re already integrated with them. So what what happens from the point of jumping on the website AcreTrader. Com and saying, I like this investment, what are the next steps of what do people let’s just say, for example, that we’re doing this out of a self-directed IRA. Very interestingly, what’s the next step?

I put in some information on the website. Yeah.

Rob Moore 21:52

So you know, yeah. Put in your KYC information. Just typically here’s who I am takes actually I was just talking to a guy this morning and on the phone in less than five minutes he had his account set up and ready to go. So you answer a very short questionnaire. That’s an SEC regulation.

I have to say that I have a KYC coverage, and then you have to submit accreditation documents. You have to be accredited investor because it’s a Reg D offering. So those are the only two things you have to do to invest. Once that’s done, you’re looking at the farm on the website. You say, okay, this is the College Park farm. 

 It’s in Indiana. Here’s what it looks like. You click invest. Now you select the number of shares you want, say 15 would be it’s 1000 bucks a share. So that’s your minimum investment. 

 15. Good guess. You get a subscription agreement. You digitally sign the subscription agreement. You say how you want to fund that investment. 

 It doesn’t have to be like, I have my money in here beforehand. It can be ACH, it can be wire, etc. etc. you click that, you click secure and you’re done. You can, once you’ve gone through the process once, like please read all the docs like spend your time, make sure you know what you’re spending once you’ve done it. Once we have investors that get through, we launch all of our farms at 1 p.m. on a weekday. It’s completely democratic. 

 It is open till it’s filled. We’ve never put one up that we manage that that didn’t fund in full. So sometimes it takes a couple of weeks. This last one is going to finish today. We opened it last Thursday so less than a week we’ve had several that fund in less than an hour. 

 It is completely democratic. Any investor can put in any amount that has an account that is verified on our website. We have investors that when it launches at 1:00 pm on a weekday, they’ll be done by 103.

Mat Zalk 23:24

Wow. That’s so easy. The bottom line is very easy to do. And you can do it out of the ACH. Send in a check or through Alto or any.

Rob Moore 23:34

Direct link your bank account through Plaid and be done. Yeah.

Mat Zalk 23:36

Let’s talk about underwriting. The underwriting process first. First and foremost. So AcreTrader does not actually as the GP, it does not actually fund any of the investment. It’s simply the platform and the manager for that investment.

Is that right?

Rob Moore 23:51

That’s correct. And we do fully underwrite them. So we are responsible for the underwriting and all management. But no, we are not at a corporate level not investing alongside the investor.

Mat Zalk 24:00

Yeah. How does does AcreTrader actually do the underwriting? My understanding is that it’s their only only a small percentage makes it through underwriting to the point where investment would happen. What are the most how does underwriting happen, and what are the most common reasons why a property wouldn’t make it out of underwriting to the next investment stage?

Rob Moore 24:20

That’s a good question. So right now we’re under 5% as far as our hit rate. So I look at 100 farms. Our team looks at 100 farms. Odds are we’ll do deep diligence on 20 to 30.

Put in 10 to 15 offers. We expect probably to land. Three of those is about where we’re at today. The number one reason we say no is because of location. We do not buy fringe ground. 

 We don’t buy low quality ground, we don’t buy development ground or anything that’s priced with development potential built into it. And then there’s several areas that we simply won’t touch because of, you know, our thesis again, that tight standard deviation, there’s people that can take risky bets in let’s say the panhandle of Texas is a really good example. Panhandle, Texas is an area you can find some really good cap rates, right? But you are irrigating ground in an unregulated area where the aquifer is just being drained. They’re sticking straws in the ground and sucking it out as fast as they can. 

 Yeah. That’s not a that’s not a secure long term appreciation focused investment. So we’re not going to look at that regardless of what the financials or considerations are once you get done with those. So there’s really only 4 or 5 core regions we work in. We work in the Corn Belt. 

 So this is going to be your Illinois, Indiana, southern Minnesota over to Nebraska. We work in the Mississippi Delta. So Arkansas, Mississippi, southeast Missouri, that’s where you’re going to see a lot of cotton rice production. We work in the Carolina coastal Plains. So eastern and western North Carolina, eastern North and South Carolina and Georgia. 

 There you’re going to see peanuts, cotton as well as corn, beans, a lot of sandy ground, some vegetable production. Then hopping over the mountains. We work in the Pacific Northwest. So the irrigated valleys around the Columbia River, the Snake River, the Willamette River, the Central Valley of California, certainly the most dense and diverse amount of agricultural production in the US. And then a little bit in some areas, such as the Red River Valley in northern Minnesota and other what we would consider not core core regions, but regions that are pure AG, right. 

 There’s nothing. There’s no development. There’s no other play associated. There.

Mat Zalk 26:22

Is the Central Valley of California likely to have enough water to sustain agriculture over the next 50 years?

Rob Moore 26:29

Yeah, it’s a great question. So when we get within regions we work in, and I’ll use central Central Valley as a great example when we get within a region that we’re willing to work. The number one reason we say no is because of water by far. Yeah. So each region is going to have opportunities like opportunities that have secure water and opportunities that have insecure water.

Mat Zalk 26:51

Yeah.

Rob Moore 26:53

In some areas it’s really easy to tell. You go up into the Pacific Northwest, the Columbia River basin, the Bureau of Land Management covers all of that. Water rights date back to the 1800s. It’s not an overdrawn water system. So their recharge is is net neutral.

They haven’t issued new water rights in decades. It’s pretty straightforward. The Central Valley of California is not straightforward. There’s nothing straightforward about California from a water standpoint, right? Within the last decade, they have passed the Sustainable Groundwater Management Act. 

 There’s a ton of regulation involved. So when we look at California water, seniority is king. We need to know that we have the most senior secure water rights available. So for instance, we have an opportunity. We just funded one. 

 We hope to have a couple more coming up in the next couple of weeks in in the Coachella Valley. So the Coachella Valley has 77,000 irrigated acres, period, right? That is not a number. That’s how many irrigation rights are available within that. Each farm, each number of acres is going to have what we call a certain number of allotted acre feet. 

 So for instance, and what an acre foot is, is if you flooded an acre of land with one foot of water.

Mat Zalk 28:04

Got it.

Rob Moore 28:05

It’s that much water.

Mat Zalk 28:06

Like a joule of electricity.

Rob Moore 28:07

Yeah, yeah. Yeah, exactly. Yeah. Just as kind of bizarre, but a little bit easier to understand from saying it. When we look at a farm, if your farm has three acre feet of water, okay, like we’re right on the edge, like you can grow most crops, you’re not going to grow great alfalfa crop.

You know, some vegetables are going to be difficult. So if, let’s say California went through a five year drought and the reservoir was down 20%, and they went and they said, okay, we’re going to cut everybody’s water. A legally, they have to cut it from least senior to most senior. Okay. Second of all, it’s being cut by a percentage of what you have, right? 

 So if you have senior water rights, let’s say your water rights are only 50 years old rather than a hundred years old. Yeah, right. That’s a junior water, right. And you’re just barely making enough in good years. That’s not a very secure water. 

 Right play. Yeah, right. The farm that we’re looking at right now, that we hope will be on the platform here in the next month, has over five acre feet of water and the most senior rights in the valley.

Mat Zalk 29:06

Great. So does that mean does that mean that it’s a 100 year old farm that’s been in operation forever for 100 years? Or does that mean.

Rob Moore 29:15

It means the water rights associated with that specific property date back to that time?

Mat Zalk 29:19

And if you if you don’t produce crops for a certain number of years, I presume you lose your water rights, right? So it means that that farm.

Rob Moore 29:26

No, no, they they transfer the property. So it’s actually kind of fun. Tim. Our real estate transaction coordinator who’s he’s incredible. He’ll get these letters in the mail.

We got one just the other day. It’ll be a folder. It’s a huge fat folder, and it will be copies of documents. When we’re doing all the title work, we’ll get documents from the 1800s. Matter of fact, when you buy the property, oftentimes they send you the originals. 

 So we have this like fireproof lock box. And it’s really like from a purely like history nerd kind of approach. It’s super cool because it’ll be like, you know, you go out past the donkey pasture, 18 steps, you turn right, the property starts there, walk to the oak tree, you turn north.

Mat Zalk 30:05

Proper survey.

Rob Moore 30:06

Yeah, exactly. And but they’re signing. It shows you the lineage of those rights, the right to farm that property, and then at some point, the water rights get associated. You see this like century old history of it just it’s beautiful. It’s really, really fascinating.

So no, this is well established. There are whole industries that exist to define and litigate water rights exclusively in California. We spend more time doing diligence on water than everything else combined when we are buying an irrigated piece of property.

Mat Zalk 30:38

So if you have five acre feet of water that would potentially allow you to produce a crop that is more water intensive and potentially more valuable in the open market, if a farmer can can can grow something that is more valuable in the open market, that land is more valuable. They would pay more rent for that farm. Is that right? Yeah. Yeah.

Rob Moore 31:00

So I mean like and you’ll.

Mat Zalk 31:00

See your rent rate from that.

Rob Moore 31:02

That’s right. And the land values are higher in those areas. Right. So when you look at like in Coachella Valley, you may spend $20,000 an acre on a piece of property. Right.

But you’re getting $1,000 a acre in rent. Yeah. If you’re in the Midwest, you may spend $10,000 an acre on rent or on on land property, but you’re getting $300 an acre in rent. So, you know, again, cap rates are going to vary 2 to 4%. The other thing that that sort of adds to the point you just made is the more high dollar value crops you can grow. 

 If you have the ability to grow those, you also have the ability to grow everything else. So your crop, what we call crop optionality, is much, much larger, right? If I’m in an area that only has a limited amount of water, maybe I have a rock within my soil so I can’t grow some tubers, some things that grow underground sugar beets, potatoes, things like that. Onions. And I am in an area that is, you know, higher elevation. 

 So I have a shorter growing season. Those are all limitations to what I can grow. I may only be able to grow a couple of crops if I’m in the Central Valley. I can grow strawberries, tomatoes, lettuce, corn, soybean. I can grow anything, Nothing, right? 

 The more optionality you have then as a producer, and I’ll pay more rent for this as a producer, as a producer, if all of a sudden one of the products that I grow isn’t doing well, isn’t losing value. Who cares, right? We’re not going to grow potatoes. Spuds are doing bad this year. We’re not planting spuds and you can rotate in seamlessly to something else. 

 Farmers are already rotating crops regularly to cut down on disease and pest pressure. Yeah. So they’re already rotating. The more options you have, the more you’re then able to you know, it’s just security within your business.

Mat Zalk 32:40

Yeah. You said earlier that you don’t underwrite for the potential to turn farmland into developments, but you will naturally sell to the highest and best use. Is that right? I mean, on a 30% IRR, I presume that went to a developer.

Rob Moore 32:56

No, actually it didn’t.

Mat Zalk 32:58

Went to another farmer.

Rob Moore 32:59

Yeah. That was a really good buying, a highly motivated person that came in and wanted to buy that farm. Yeah, we have we have actually.

Mat Zalk 33:05

On a short term I guess.

Rob Moore 33:07

Yeah, it’s a short term hold which again, like IRR, is time skewed. We use IRR intentionally to be conservative right. Because if you’re doing a 5 to 10 year hold period, you know it’s really easy to to, you know, show an moic and be like oh my gosh. Hey come on. That’s disingenuous right?

Like so we use IRR because in our asset class, longer hold periods are hurt by that. And we want to stay conservative with our assumptions. Yeah that was a shorter term hold period for sure. We have one instance that I can think of in our entire company, where a piece of a farm was sold into non ag use, and it was because and we still actually most of the farm is still held managed by us. It was a partial disposition. 

 We bought several hundred acres in East Arkansas. Beautiful farm. I mean it’s a just really really beautiful level rice and soybean farm. And along with this purchase, we had to buy, we’re buying an individual who’s selling the whole farm. And he had a piece of property that was next to the highway, about 100 extra acres. 

 So we bought it. We put very little value on it. Didn’t really think much of it at the time. It was non-irrigated. It wasn’t in great shape. 

 We bought it because we got a really good price on the whole package. A couple of years later we had a group come, an agricultural group, but that specifically wanted something with highway frontage and they paid two X market.

Mat Zalk 34:22

Why would they, why would they want that?

Rob Moore 34:24

So they could put their sign up and no no no it’s oh no no no this is like equipment and stuff. So yeah, it’s like the idea when you’re driving down the road you say oh so and so is here. Right. So that is the only instance I can think of because again, we don’t underwrite for that. So if you’re close to a city and you own farm ground, you’re going to price in that potential.

This could become a neighborhood. So I’m going to sell it for, you know, 20% more. We put $0 value on development. So the odds of us buying a farm in a location where development is going are very, very low. And I mean, at a really core level, if I’m out there telling farmers, you know, work with us, we’re a good partner, we’re going to give you a purchase option. 

 We’re going to build this out in a way that helps you. I don’t want to be in the business of taking farmland out of.

Mat Zalk 35:05

Are you agnostic generally as to the crop? That are you? I guess fully agnostic as to the crop that somebody will grow, as long as it’s legal as there can other cannabis uses in states where that’s legal to grow, or is there anything like that or are you?

Rob Moore 35:18

We haven’t invested any farms that have any weed on them. I, I, you know, yes. At a at the highest level, yes. We are agnostic. I care how the ground is being taken care of because that’s going to preserve value.

Right. The market can appreciate. But if you’ve destroyed this farm and not taken care of it, then that’s going to hurt the value against market, which is negative to the owner and investor in this instance. So I care a lot more about how you are farming than what you are farming. That said, because of the type of property we buy both in scale and area, everything that we buy is going to be in what we would consider large scale production AG. 

 So this this is going to be again corn, soybeans. Cotton, peanuts, potatoes. onions, sugar beets, lettuces, other various vegetable production like it’s it’s pretty standard. That said, the farmer is not they have to tell us what they plant. They do not have to agree to plant a certain thing. 

 So when we lease them the farm, anything they can legally grow, they’re allowed to grow on the farm. And I don’t care as long as they take care of the ground.

Mat Zalk 36:22

When you say how they take care of the of the land, is that more the crop rotation, making sure that it stays fertilized properly, or is that ensuring that they don’t have a broken down tractor on the side of, you know, a hundred acre parcel that obviously don’t? I would think you don’t care that much about that until you start to show it and it gets.

Rob Moore 36:42

Yeah. I don’t I mean, so first of all, they do have to most of the focus is on their actual use. So you know what? You have to show me what you’re putting down. Like you’re not ripping all of the nutrients out of the soil without putting anything back in.

I need to know that you’re taking care of it. I need to know what you plant and how you take care of it. From a value standpoint You would hate to have a tenant that like, wasn’t weeding the field, wasn’t taking care of it. Because ultimately, like the most likely buyers, a neighbor, 70% of agricultural acreage is still bought and sold by farmers. So I don’t want to be like, oh yeah, the ugly farmers for sale, right? 

 So we care a lot about how they take care of it and maintain their own operation. The plus side is it’s mutually beneficial. That’s better for their bottom line. So it’s typically going to be aligned. We do care like they can’t store chemicals on property. 

 They can’t like there’s things like that that could be an environmental risk we look out for. And then when we go to sell the farm then it is important like you know, don’t have a broken down combine.

Mat Zalk 37:40

So if they’re putting product if they’re putting chemical on their on their crops, they contract with an aviation specialist that sprays it from the air or they have somebody come apply it. They just can’t keep the product on site permanently.

Rob Moore 37:54

That’s right. Yeah. And they have storage houses like farmers. To be blunt, most farmers now own their own sprayers. So most of them are doing this themselves.

And yeah, I mean, it’s part of their integrated operation. For us, what is important, again, is just like from an environmental protection standpoint, I need to know that everything you’re doing is 100% above board, because I’m representing 150 investors that put their money here, and they don’t have any oversight, right. The retail investor wants this to be passive and turnkey. So it’s really important to us that we’re not like unnecessarily increasing risk to the investment or the or the pressure is there.

Mat Zalk 38:31

Is there a benefit to any organic farming? Is there a higher premium paid if you can turn land into organic land? I don’t know what that the USDA declares that as or considers that if you don’t have, I don’t know, 3 or 5 years of pesticide use on a property. I’m sure there’s a bunch of stipulations, but is there does that happen? Do you transition land into organic and is there a premium?

Rob Moore 38:51

We do. So the thing with organic, there’s there’s two sides of the organic trend that and we’re a big fan of organic ground. We manage quite a bit of it. We have done transition projects. We’ve bought fully productive organic ground already.

There’s a couple of things when we look to transitioning, ground is the easiest one to explain. We’re working with a farmer. The farmer farms organic ground. Most organic farmers also farm some non-organic ground. Right? 

 It depends. They have to cashflow. Their operation is not how they want to do business. There’s about 1 to 2% of ground in the US is organic certified. So very very small. 

 So it’s hard to find these opportunities. One of the things that we found is really successful with our platform is the transition, like allowing the investor to take a little bit of the risk to allow for the transition to occur. So it takes 2 to 3 years depending on prior use. For a farmer to convert a piece of property into organic certified production. That means for 2 to 3 years, they have to farm organically and sell it at conventional prices. 

 Yeah, that is brutal. I mean, like you want to talk about the margins on that are effectively none, right? So what we do is we’ll go out and say, great, if we can get a really good deal on the purchase of the ground, which drives the majority of the return, then we’ll and the investors love it. We have a lot of organic interests. The investor takes significantly reduced cash flow for years one through three we sign a seven year lease. 

 So then on the back end they get four years. Once your organic certified rent goes way up, right? I mean, like you’re making a ton of money off of that that farm compared to conventional crops, it’s just more work. It’s more labor, it’s more management. You have to make sure that you’re keeping it organic, certified. 

 There’s more paperwork associated with it. So we have done several organic transition deals. Where we go in, we buy ground that’s not organic, work with a farmer to convert that. The investor takes a really low cash return for a couple of years, makes it up on the back end that then de-risks the farmer where they don’t have to farm at a loss for three years to make that transition. We do. 

 Also, if we find an opportunity to buy already transitioned ground, we certainly will. We have bought some in central Nebraska and anticipate getting some more on the platform, hopefully in the next couple of months.

Mat Zalk 40:58

How do you how do farmers, if at all, participate? Does any farmer ever sell 90% of the land and then keep temper and put back into the deal 10%? Or is it generally like I’m out, I’m out?

Rob Moore 41:12

No, we we do quite a bit in the sale leaseback space. And we have several operators. We’ve had operators that invested alongside investors on their own property. So hey, I’m going to sell a $2 million farm. I’m going to put in a quarter million dollars.

I want to retain some ownership. I want to see some of that upside. I want to, you know, take the rest of the capital. I’m going to go buy another place that’s coming up next. Do I really want great. 

 They’ve moved their money around. They have a long term lease. We often put purchase options on them as well. So then like they’re selling below market right. You got to sell below market. 

 Ultimately I need the investor to get a product that is better than market out of the gate.

Mat Zalk 41:45

Sure.

Rob Moore 41:46

So I’m giving you a long term lease, locked up your access to that ground, giving you liquidity for your product without losing your farm acreage in exchange for an. I’m more than happy to make sure that you have the right to buy it back, but you’re going to buy it back at market so that that delta between purchase price and current market gets made up. So then the farmer has a purchase option that when we go to dispose of that property, the farmer can buy it back at whatever today’s market rate is.

Mat Zalk 42:12

And how do you define today’s market rate in that instance.

Rob Moore 42:15

So right now what we do, our most popular purchase option, which is is what we’ve settled on as a business is the most mutually beneficial is when we decide, okay, we want to sell this property. The first thing we do is we do our own analysis of the market, and we have the actually, the parent company that we used to work for now solely owns a business called Acres, which is a data and land intelligence platform. We are a client of theirs. They have absolute best in class comparable sales for rural land data, which is not something that you can get anywhere else. There’s no MLS for farmland.

Mat Zalk 42:46

There’s no running. Comps has historically been hard. Now is easier with this data set.

Rob Moore 42:51

That’s right. So I look at a data set. I say, okay, look, I’ve got 20 transactions. I believe that market today is $11,000. I present that to the farmer.

The farmer has two options. Option number one. Yeah that’s market. 11 grand. Sounds great. 

 Here’s 11 grand. I’m going to buy this property back. Done. Option two. I think you’re wrong. 

 I don’t think it’s $11,000. I think it’s ten five. If they say we disagree with whatever valuation has been put on that we go to appraisals. The farmer goes out, gets an appraisal, we go out, we pay for an appraisal out of ATM. So we personally take that front. 

 We take those two appraisals. They’re both local. We average them together and that’s the price.

Mat Zalk 43:27

Wow. Cool. The only the only thing I would think of is that you’d say to a farmer, you can choose one of these ten appraisers that we think are legitimate appraisers. I guess there’s language in there that they have to be licensed and they have to do this. But like the.

Rob Moore 43:42

License, they have to be local. They have to be on and on and on. And again, it’s an average. So I’m also going to call one. Right.

And and so we put those together and and you know and it’s not either or. You can’t get the appraisals and then decide which was either. You take what we say market is or you say, no, that’s I think you’re wrong. But if the appraisal comes back and it’s, you know, 10% higher, like, well, that’s strike price now.

Mat Zalk 44:02

Yeah. Yeah. Interesting. AcreTrader takes 70 or charges earns maybe take is the wrong word. 75 basis points as an annual administrative fee.

What? Help us understand what that covers. And does it compare to alternatives? I guess there aren’t really that many alternatives in the farm space, so maybe just help us understand what that fee covers.

Rob Moore 44:25

Yeah. So from our end, I mean, part of it is just keeping the lights on here, but most of it is the management side, right? So not only are we doing all of the management in-house, we manage all of our leases. We manage all of our reporting.

Mat Zalk 44:37

Is there a farm management system that you can use for that or you have built your own?

Rob Moore 44:43

We do everything in-house, so we don’t use any external software for any of our management. We want to be directly tied to that. Yeah. Now, what I will say is we give away typically between a quarter and a third of that, we end up paying locally. Yeah.

To a certified completely third party as the Association of or Associated Society of Farm Managers and Appraisers, I think anyway, a certified farm manager to then be a completely objective, boots on the ground, constant eyeball on that farm. Got it. So part of our management fee, we don’t even take we give that to somebody locally. It’s not that we don’t have the in-house expertise. We have PhDs in economics that work here. 

 We have people that have farmed for 20 years that work here. For us, it’s that I can’t be 140 places at once. Yeah. And at a really core level, I like I trust our farmers. We are incredible, like friends and partners with a lot of the people that we work with on that front. 

 But ultimately, I need objective feedback. I’m responsible for hundreds of millions of dollars of other people’s money. Sure. So we do take a chunk of that to make sure there’s somebody that lives locally that has no dog in the fight, that’s going to write me up a report several times a year and say, hey, I went by the farm. Here’s what the stand looks like. 

 Yes, this has been being used correctly. I think you need to watch out for a low spot over here. We may need to put in some drainage tile. Man, you know, really looks like we need to get some work done on the irrigation system. Those are things that I want somebody that is, again, an unrelated party. 

 So we pay for that out of that as well. In comparison, I don’t know anybody that charges under a percent for management. So I believe we’re the only group that’s charging under a percent across all real estate investment classes. You don’t typically find that. So we’re 0.75% up front. 

 And then on the disposition side we tie our disposition fee to purchase price. So it’s percent based. Then I’m highly incentivized to get the investor the best possible value they can. And that that is where that’s the lion’s share of of our our take is is on the sourcing and the disposition side. The management fee is very much just to keep the lights on.

Mat Zalk 46:47

It’s fascinating. All this has been fascinating. I hope some of our listeners will enjoy this because I’ve really enjoyed like learning about this. But I taking the conversation down some, down some, I guess, paths that are solely because it’s fascinating to me. I want to ask one final question a little bit, a little bit lighthearted.

What’s the what’s the biggest misconception that we have about farmers today in terms of accents, sophistication, levels, use of technology? What are the biggest things that you could dispel for us in terms of misconceptions about today’s farmers?

Rob Moore 47:25

I love that question. I wish I got that question every time I talk to anybody. Farmers are not a monolith. They’re not all the same. Right?

It is not. There’s this bizarre conception, and I read it in the media from like, really good journalists. They still fall into this trap that the farmer is like this weird version of a person in overalls that’s like super, super conservative and, you know, but also kind of dumb. Like there’s it’s a really weird mix of like, I don’t know, that’s not what farm. Yes. 

 Like that’s that is not the case. Right. I talked to farmers all the time. They you are running a business that is so complex. You are running millions and millions of dollars of equipment. 

 You are running crews that are moving 100 directions at once. The biggest variable in your business is weather. You have no control over it. You have no control over the price of your commodity. You have no control over the price of your inputs. 

 Like this is hard farming is. It is so hard.

Mat Zalk 48:24

As evidenced by the by the by the decline in the number of people that want to engage in that business.

Rob Moore 48:30

Yes. And I think and a follow up on that point is a lot of people talk about like corporate farming, like farms are getting bigger, there’s no doubt. Right. Within the industry, as margins get tighter, scale occurs in every industry. always right.

It is happening in farming. It has been happening for literally generations. It is going to continue to happen unless there’s some sea change in the way that we handle agriculture worldwide. That said, the idea that like there’s a corporation that comes in with their big robot things and is out. No, these are families. 

 It’s still families. Yes, there’s less of them, but there’s still families. These are family farmers that live locally, that are scaling their businesses to stay in business. And I really I get very frustrated when I hear people talk about the corporate takeover of farming because I, I don’t know, I manage tens of thousands of acres. I have been all over the United States looking at farmland. 

 I have yet to run into a corporation running combines and picking corn. Like that’s not who’s out there doing the farming. It is local family farmers, usually multi-generational local family farmers that have been doing this and are I mean, you have to be to keep up now, right? You need like a PhD in ag technology and diesel mechanic, right? Like, yeah, it’s such a varied skill set that you need. 

 Like, there’s nothing more impressive than a farmer that is is running a productive, profitable, sustainable business.

Mat Zalk 49:56

I mean, there, there. I presume that they’re fairly technologically savvy, given the current state of of equipment and running, you know, a combine in today’s world with, I presume, some level of AI and geospatial engineering that happens. Again, the diesel engine that’s still running it potentially, and the spreadsheets that are probably everywhere in agriculture, managing commodity prices and tracking, you know, when the last rain was when the next rain was, I all sorts of stuff in terms of, you know, productive acres of your, you know, segmented of your thousand acres or whatever else. Pretty.

Rob Moore 50:32

Yeah. And profit.

Mat Zalk 50:33

Margin.

Rob Moore 50:34

Skews so much. Right. Like one year, you might do really, really well, then you might have two years of very low profitability. So the financial planning necessary to run a sustainable ag business is like, oh my gosh. I literally like I, I have a hard job.

It doesn’t hold a candle to a human being. For me, I am not smart enough. Like I’m just simply as a human. Not smart enough to do that at scale. It’s pretty unbelievable.

Mat Zalk 50:57

Amazing. What did I not ask you? That I should have asked you or any. Anything that you think our audience would want to know that I haven’t touched on?

Rob Moore 51:06

Yeah. I always say, like, ask a ton of questions and be skeptical. Right. Whenever we’re talking about investing, right. There’s a couple of things that we do to try to differentiate ourselves on that front.

Every single farm that we ever put up on our website will have a full financial model in Excel that you can download, break and change. I personally, I no longer invest in things that I don’t have a financial model for on the like, on the the private side. If you do not know somebody’s assumptions, I don’t care what they say. Their return profile is.

Mat Zalk 51:36

To be able to sensitise against them.

Rob Moore 51:37

Yeah that’s right. So I you know, typically what I say is like, get on our website, dig around, but then pick up the phone and call me. We’re a small business like you can get Ahold of. I’m the general manager of the company. You can get Ahold of me within a half day pretty much at any time.

So dig in, ask a ton of questions. Be skeptical. Right. Ask really hard questions. Those are the ones that I enjoy more often. 

 And and yeah, I mean for all investments, but certainly for ours. Make sure you have a really clean understanding of what it is that you are investing in. And in our instance, that is land like that, a very core level. What we’re doing is trying to offer opportunities for people to invest in productive farmland.

Mat Zalk 52:16

Right. One one final question from me, and also a bit whimsical. It must be when I just think about your underwriting and how you have to get to a farm in some rural part of Indiana from Fayetteville. Logistically, that’s just a challenge. You have to take a plane from XNA into God knows what the closest airport is commercial, I mean.

And then you got to get a car, rent a car and drive for 3 or 4 hours to to look at something that maybe, I don’t know, a mile by a mile or potentially much larger. What have you figured out? Any little hacks to avoid? Do you have a company pilot that can take you into small airports? Like, how do you deal with that? 

 Or you just know that when you go look at a farm, it’s going to be a two day exercise minimum, and you just carve out that time.

Rob Moore 53:05

Yeah. You know, I mean, podcasts on one and a half speed can get you a long way. I think, you know, from from our end, you know, I think part of it is we do have one team member that that actually lives in the Corn Belt. Everybody else in our office is based out of Fayetteville. So we have one individual in the Midwest in particular.

He can get up there. But no, I mean, like people that work in, in our business get used to travel and to be blunt, like, I love it. I like I love rural communities, I love rural America. I think there’s a lot of beauty in it. And if you’re willing to take the extra couple of hours, like the nice thing is, is you end up in places where, like, you’re not going to drive to the city to eat. 

 That’s seven hours away. So you’re going to go to the local diner. You’re going to like farmers are unbelievably transparent, in my experience, incredibly transparent people. Right. So you go to a farm to look at it, the guy shows up and he’s like, oh yeah. 

 Like, you know, granddad’s buried over there. I remember when I, you know, was over here, like the stories that you hear and the picture that it gives you of what agriculture actually is in rural America has again, like turned a lot of the assumptions that I had coming into this on its head. But yeah, from a travel standpoint, yes it is. We don’t go places that are easy to get. I’m really good at flying into Minneapolis and then spending seven hours in a car.

Mat Zalk 54:22

What podcast are you are you listening to when you’re in the car? What are your favorites?

Rob Moore 54:27

Oh, that’s a really good question. Recently on the financial side, MEB Faber, I’m a big med Faber fan, have been for a long time. I mad. Really like.

Mat Zalk 54:34

Mad mad.

Rob Moore 54:35

MEB Faber.

Mat Zalk 54:37

MEB Faber. That’s a name.

Rob Moore 54:38

Cambria Capital. And he does I just, I really I enjoy curious interviewers like when I’m looking for in a podcast is somebody that’s asking like questions. They’re not out there pitching something. It’s not about what it is. They’re asking really interesting questions.

And I think MEB does a really, really good job with that. And then I’ve recently been really enjoying not like a Spotify allows you to do books on tape. Yeah, right. You put on like a nonfiction book podcast you’re interested in and yeah, and they have podcasts and you put it up at like again, like speed and a half and you just go and just rip through. I do most of my nonfiction collection is is coming through podcasts and audiobooks at this point.

Mat Zalk 55:18

I love it. Rob Moore serves as the General Manager of AcreTrader, having previously held roles, as you heard, the director of farm operations, investment manager and investment analyst specializing in row crop farming, sourcing and acquisition. Prior to joining AcreTrader, he worked as a senior analyst for a forensic accounting firm in the waste and recycling industry, which we didn’t even touch on, which is another one of those like, not sexy business. But if you look at the returns, they can be very sexy.

Rob Moore 55:43

Yep.

Mat Zalk 55:44

And prior to that, he was he worked full time in livestock operations and real estate management. He holds a series 63, 79, 82 license, all three of those licenses with the Financial Industry Regulatory Authority, FINRA with FINRA, as well as a degree in philosophy from Rollins College. That is, I think it it comes across as slightly understated for how accomplished all that is. So, Rob, we appreciate you being on the show. This was a great chat about rural America and farmland and the returns they can provide.

Really appreciate it.

Rob Moore 56:17

Hey Mat, pleasure to speak with you.

Outro 56:22

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