So in this video today,
we are going to be reviewing a crowd-funded
real estate investing platform, out there,
known as AcreTrader.
Now I've been studying and researching
these different crowd-funded real estate platforms
for the last year and a half or so.
And AcreTrader is one that is new on my list here
because this is a rather unconventional way
to begin investing in real estate.
So most crowd-funded real estate platforms out there
follow one of two strategies.
Number one, you invest in individual real estate projects,
usually known as private placements.
Or number two, you invest in a portfolio of real estate
which is primarily commercial or residential real estate.
Now AcreTrader is completely different
than these other platforms out there
and commercial real estate, or residential real estate,
you are actually instead investing in farmland.
So AcreTrader is essentially a platform out there
that allows you to buy shares of farmland
and then you are able to make money
in one of two different ways.
Number one is going to be through asset appreciation.
And that would essentially mean, you bought this land
or this share of land for this price
and then many years later, you sell it
for a higher price and then you have that capital gain
based on what it sold for versus what you purchased it for
and then the second way you're able to make money
with AcreTrader is by renting out that farmland to farmers.
Now I know what you guys are thinking
that probably sounds like a lot of work,
but the good news is AcreTrader actually
handles all of that legwork for you.
They handle all the paperwork.
They handle the leasing agreements with farmers
and all of that.
This makes this a very passive investing platform.
Now there are a few things that you should know
about this platform before you begin investing.
Number one, the first and most important
is that you do have to be an accredited investor
in order to invest with this platform
because this is a private placement
and that means you are investing in one specific project
or piece of real estate rather
than a portfolio of real estate.
And since this type of investment is typically higher risk,
higher potential return, the SEC has put in place
something called Accredited Investor Status.
The second thing that you're going to want to know
is the minimum amount of money to begin investing.
Well as we said earlier, AcreTrader essentially takes
a large plot of farmland, breaks up into shares
and then sells those shares on the platform.
And the minimum to begin investing for most properties
is anywhere from 5,000 to $10,000 dollars.
The next thing you're probably wondering here
is what does AcreTrader charge for a fee?
As we said earlier, they're doing a lot of stuff
on the back end in terms of paperwork,
lease agreements with farmers,
handling any kind of documentation,
so they do collect an annual asset management fee
of 0.75% and there may also be some additional
closing costs associated with each project
you are investing through on the platform.
Now as we mentioned earlier, there are two ways
to make money with this platform.
Number one appreciation of the land,
and number two, renting out that land to farmers.
So how do you as an investor, earn a piece
of that rental income.
Well that is going to come in the form of dividends.
Now AcreTrader aims to pay these dividends
on an annual basis.
But just like with the stock market,
just like with other crowd-funded platforms,
these dividends are not guaranteed.
Because it's based on whether or not
that land is currently rented.
Now another thing you should be familiar with here
about AcreTrader is the relatively short operating history
as this company just recently was formed
in April of 2018.
So unfortunately we don't have, you know,
many years of track record to go off of here,
so if you do decide to invest,
you may want to consider easing into this investment
because of that limited operating history.
So now what I wanna do, we're gonna jump
into my computer and I wanna show you guys
what the AcreTrader platform looks like
and we'll take a look at some of the properties
currently available on the website.
Alright so here we are on the AcreTrader website.
As you can see, they offer some different information
and educational resources about why you may want to invest
in AcreTrader and farmland in particular.
But what we wanna look at quick here
is the different investments that are currently available
on the platform.
Now because this is such a new investing platform,
they unfortunately do not have a wide variety of properties.
They currently have one live listing on the platform here
which is a property in Illinois.
But they do have a number of different properties
that were recently fully funded on this platform,
and they're continuing to add new properties
on a regular basis.
So you can take a look here
or maybe check back once in a while
and see when they're adding new properties
but this is the only one currently being offered.
Now when you click on each one of these,
it's going to give you an idea
of exactly what you are investing in.
So this one for example, is an Illinois Row Crop Farm
with a Wind Turbine, and if you scroll down,
it's gonna give you a complete overview
of this investment and you know what you are getting into.
So what it says here is that this is a high yielding
corn and soy bean farm in Northern Illinois,
and in addition to 61.12 acres of tillable land,
this farm also includes annual revenue
from an on-sight wind turbine.
And as you can see here, it's $9,000
of annual income from the on-sight wind turbine.
So it's really great how much information
they offer you here.
You can look at maps of the farm land,
see exactly what it is you're investing in.
If you log in and have an account with them,
you can look at the documents, the financials
and the different ratings.
But it's great because what you're essentially doing
is vetting the different properties
and then deciding which ones you want to invest in.
And you can also take a look at
the recently closed properties
and see what the specifics were about those investments.
So they unfortunately only have the one property right now
but if you click the link in the description,
you can sign up to be notified when they do offer
new properties on the platform.
So anyways, guys, that is the AcreTrader platform
in a nutshell and there are a few things
that you should be familiar with before you invest
in any crowd-funded real estate platform out there.
Number one, the first thing
you have to understand is liquidity.
These are private real estate investing platforms,
meaning it's not a publicly traded REIT.
So you can't just publicly trade shares as you would
of a traditional publicly traded REIT
on the New York Stock Exchange or the NASDAQ for example.
So as a result, liquidity is not guaranteed
with these platforms.
So each investment on AcreTrader has a time duration there
where they give you an idea of how long you should expect
to have your money tied up.
And if you're not going to fulfill that time duration
you simply should not invest in these platforms.
And as a general rule of thumb,
across all crowd-funded real estate,
you should have a minimum time horizon
of five years in most cases.
But anyways guys, that being said,
if you decide you wanna sign up for AcreTrader,
I have a link down in the description below.
Full transparency, I am affiliated with AcreTrader
so if you do use my link, I may earn a commission
in the process but it is a way to give back to me
for putting this review together for you guys
and I certainly would appreciate that
but it is totally up to you.
So thanks so much for watching guys,
I hope you enjoyed this review
and I will see you in the next video.
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