SaaS Interviews with CEOs, Startups, Founders EP 574: Buying $2m 600 Acre Pecan Farm, $450/acre/mo, Literally Shaking Money From Trees with Investor Luke Stronach
Feb 18, 2017
23:20
Luke Stronach. He's spent the last few years raising money for his farmland fund. He's got one single family office as an investor. He's currently 44, he's taught finance, and most of his background is in low-income housing. He's really looking forward to coming to the show and he's a listener.
Famous Five:
- Favorite Book? – The Fish That Ate the Whale
- What CEO do you follow? – Stewart and Lynda Resnick
- Favorite online tool? — Duolingo
- Do you get 8 hours of sleep?— 7
- If you could let your 20-year old self, know one thing, what would it be? – If you want to have a meaningful life, you should be doing meaningful things
Time Stamped Show Notes:
- 01:20 – Nathan introduces Luke to the show
- 01:46 – Luke shares what he likes about The Top
- 02:04 – Luke has raised less than $10M for his farmland fund
- 02:15 – Luke is currently in the process of moving to Atlanta
- 02:20 – Luke is about to close his first farm
- 02:28 – Luke's second orchard is under contract
- 02:34 – Luke wants to develop a 100 acre orchard in Georgia
- 03:06 – Luke mentions what farmland investors are looking for in a farmland
- 03:24 – Luke's first orchard had good irrigation
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- 03:43 – It has 600 acres and was almost $2M
- 04:41 – 40% of North America's farmland is leased to farmers
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- 04:50 – Investors buy the farmland, lease to farmers who rent per acre or have a revenue share agreement
- 05:35 – Many farmers are cash flow farmers
- 06:00 – There are differences across different crops
- 06:45 – Luke shares the farmer's perspective on crops
- 07:01 – Average rent per acre
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- 07:40 – The farmers growing rice and corn are renting at $250 per acre
- 08:00 – Luke's return on his $2M investment
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- 08:50 – The return will always depend on the yield which varies
- 09:06 – People look at farmland investing as a way to lock value into the land
- 09:12 – There are people who are after the yield and there are those who are not
- 10:05 – Luke shares what happened in 2007-2009
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- 10:10 – S&P 500 lost 50% of its value
- 10:46 – Historically, farmland has done well with inflation
- 11:00 – Luke's opinion regarding inflation
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- 11:14 – The returns in farmland can be attractive
- 11:57 – Farmland is not as big as commercial property
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- 12:03 – Farmland investment is a hard space
- 13:10 – It is a persistence game
- 13:40 – Luke is currently in Alabama
- 14:00 – Nathan wants to study Luke's field and work with Luke
- 17:17 – There are so many things to do in Georgia and Luke will keep Nathan busy
- 18:08 – Luke makes software for farmers
- 18:59 – In Episode 450 of The Top, Nathan had Robert Leclerc, the founder of AgFunder
- 19:23 – The Famous Five
3 Key Points:
- The farmland investment industry is a hard space and requires persistency.
- People look at farmland investing as a way to lock value into the land.
- If you want to have a meaningful life, you should be doing meaningful things.
Resources Mentioned:
- Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
- Drip – Nathan uses Drip's email automation platform and visual campaign builder to build his sales funnel
- Toptal – Nathan found his development team using Toptal for his new business Send Later. He was able to keep 100% equity and didn't have to hire a co-founder due to the quality of Toptal
- Host Gator – The site Nathan uses to buy his domain names and hosting for the cheapest price possible.
- Audible – Nathan uses Audible when he's driving from Austin to San Antonio (1.5-hour drive) to listen to audio books.
- The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
- Jamf – Jamf helped Nathan keep his Macbook Air 11" secure even when he left it in the airplane's back seat pocket
- Freshbooks – Nathan doesn't waste time so he uses Freshbooks to send out invoices and collect his money. Get your free month NOW
- Show Notes provided by Mallard Creatives