[Feb/2023 | Real Estate] Investing in Farmland - Murray R. Wise

简介:这本书比较老(1980s), 当时经济环境刚经历农场过热泡沫然后泡沫破裂，是一个很特殊的历史时期. 泡沫时期过度杠杆也被作者批评了，本书对于农田underwriting颇有干货.
Chap-0 Intro
- 1980s farm crisis
- 年化ROI 从1930s to 1980s about 6% – appreciation的年化
- 做得较好的可有5-8% cashflow
  - Cash rent from farm operator
- 重要因素: 位置，降雨，土壤，排水
Chap-1 极佳机遇 – 宏观
- Farm foreclosure – About 8% ROI to passive investor
- 1982-1987农田价格大下降(50%)
  - 过度扩张，农场价格上升，现金流干涸
  - 农业进出口的国际供需变化
  - 所花费的能源价格高企
- 长期来看3-4.5% ROI
- 美国农业革命 – 机器代替人工
- Gov Subsidy
- 农产品价格高时，易流失的土壤也被用于农田，不是可持续发展
  - Conservation Reserve Program
    - 农场主用农田种树从USDA拿补贴
      - $48/acre at the time
    - 风险在于补贴不知道会不会随时间上涨，但各种费用应该会随时间上涨 i.e. property tax
- 作者认为只买最好的农田
Chap-2 好农田
- Location
  - 比如Iowa东&北田好，南田差
  - 在好区中下的田 > 在差区的好田
  - Use income tax / resident or bank deposit per capita to determine if farmland area is good/bad metric
  - Good traffic – water / train traffic, bad traffic area have more transportation cost
- Rainfall
  - 降雨分布/月份分布 – 农作物不同不同月份的需水量有差异
- Soil
  - Soil Productivity Index
    - Clay > Loam > Sandy
    - 每种土壤容水量不同
  - Also by slope
- Drainage
Chap-3 农产品的其他用途
- 在汽油里加ethanol
- corn-based sweetener
- 可降解包装
- CMA融冰剂 (道路)
Chap-4 与其他投资的对比
- inflation hedge
  - 作者认为基于比较少的数据 1945-1985, land value index = 1.5x CPI most of time
  - 作者的金融知识似乎不高深
Chap-5 农业运作的资金需求
- 机器贵，农民50-250 acre not economical
- 泡沫(农田价格高)时
  - 91% 买家投资者 9%农民
  - 泡沫破裂之后 – 38%投资者62%农民
Chap-6 Underwriting
- 土壤
  - 需要保护使其有肥力
    - yield over years + productivity index
  - Topography – sloping harder to farm
  - 三种土质: soil / loam / clay
    - midwest clay多, 保水好，抗干旱
  - 酸碱偏酸影响根的生长
    - PH <5.0不好
  - Soil survey – 土壤类型
  - Soil productivity rating system
    - C.S.R. : Corn Suitability Ratings (0-100)
    - Estimated Bushel of corn per acre
- 降雨
  - 不仅要知降雨总量，更要知其季节性变化 – critical month when plant growing
  - 大干旱风险 – 美国不是高危 (i.e. 1988干旱)
    - 抗干旱的种子 – 生物工程
  - 土质越差则干旱时减产越严重
  - Irrigation
    - 耗钱 – 投入/产出比未知
      - NE州 75%+ use irrigation
      - CA 90%+
      - 消耗地下水
  - Drainage
    - Clay土 = lack of internal drainage
    - 一般drainage寿命30-50年，但可以15年折旧报税
  - Fertility: 氮磷钾, PH值
  - Grain basis: 运输成本
- Market Imperfection
  - Price measured in $ per bushel productivity
  - Price can diff 30%!
Chap 7 Acquire
- Farm brokers has been talent thin, 不靠谱居多
- Auction
Chap 8 Leasing
- 50/50 crop share
  - Both tenant/landlord share the cost & return
  - Cost – 农药种子etc.
- Custom Rental – 收益高风险大
  - Landlord pays all cost & gets all return
- Cash rent – low risk
- Bushel lease
  - Get fixed number of bushel results
- Lease itself might require a lien / UCC
- PIK (payment in kind) 套利
Chap 9 Ownership
- Fee simple
- Land trust
  - 作为个人Property 而非Real property 跨州遗产税不同
- Contract for deed
  - Title remain w\ seller only transfer when paid in full
  - Common ~10 years
  - Make sure “cloud the title”
  - Enable seller faster foreclosure if it defaults
Chap 10 Financing Acquisitions
- Leverage work well when high inflation
  - i.e. interest rate 9% with inflation 10-20%
  - Author likes all-cash purchase
- Farm credit system
- Insurance company
  - 7-15 year loan, 35 year amortization (balloon), 60% LTV
- Farmer Mac
Chap 11 Professional Farm Mgmt
- Good vs. Incompetent farm mgmt
- Appraisal
  - Don’t want broker’s 粗心的BPO/CMA
  - 需要细致的土壤, drainage etc.的分析
    - Not cheap
Chap 12 Corp & Foreign Ownership
- Some states have anti-corp / anti-foreigner farm bills
  - Anti-foreigner bill: Iowa at the time
Chap 13 作者自身经历
- 问临近农民此farm的价格
- Auction system
  - 通过marketing提高卖价
  - sold much more than appraisal
  - 制作精良的小册子&多媒体

[Feb/2023 | Real Estate] Investing in Farmland – Murray R. Wise

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