Current Deals
Ag Strategy LLC.
Everyone wants things to be better about certain businesses. In our case, the prices were either really high, or the products were really poor. One business had a really nice suite of offerings, but poor service and was difficult to do business with. Another was easy to work with, cheap, but no financing options. Then another yet will have financing options, good products, good pricing, but horrible support and service.
That’s what led us to this. How can we take a business that we have experience in ourselves and tailor it to the modern customer in agriculture? All of the companies in the area say they do that, but they’re really just adding high-profit options to their lineup without any real benefit to the end user. I know this because I was in the sales trainings were we were told to sell these new things and provide some questionable data backing the product up. All the while, knowing the real reason we’re selling it is to make our management more money.
Not anymore. We’re gearing our lineup of products to be the best quality products possible for the more budget minded individual. All of the products will have undergone rigorous testing from the manufacture but will be priced as a mid-tier option in the market place. We are partnering with someone to handle the needed financing that comes with Ag related businesses and will also assist us in distribution needs.
In the beginning phases of the business, we’re going to offer commercial chemical sales and biologicals. Then we’ll plan to expand into seed, seed treatment, and custom application as the business grows and needs arise. All the while staying true to our farmer-first values.
Manhattan, KS Duplex
Our duplex in Manhattan checked multiple boxes for us. First, it’s in the town I went to college in and am familiar with renting in that area. I understand what things rent for, the challenges in the area, it’s close to where we will live now so that I can address issues easily, and it’s in EXCELLENT shape!
This isn’t a cash flow king honestly. It’s on a 20 year loan and is primarily an appreciation play since Manhattan is growing, adding jobs through the NBAF facility, new production plants, a growing number of apartments leading to an increased demand in single family homes for established family units.
Let’s break it down. First, I purchased the property for $158,000 on a 20 year note with a conventional lender. I used current home equity for the “down payment” so I have no cash in the deal currently aside from my $1,000 earnest money and my $500 home inspection. From there, I requested $3,000 back from the seller to cover some closing costs and a home warranty covered by the seller as well. This place was listed at $165,000 so we got a small discount that I’m not thrilled about, but not disappointed in either (I offered $155,000).
Quarter Section in Navarre, KS
In March of 2022, I received a call from a customer of mine about the valuation on farm land prices in the area. This customer knew I was from there, so figured I could be a resource. Well, after they gave the opportunity to the current tenant, they called me asking if I was willing to pay the appraised price of $508,000. I said, “Absolutely!”
It had been a dream of mine for a while to start farming and this was the perfect chance to get started. The FSA was at 3% APR on a 40 year note with NO MONEY DOWN! Yeah, 100% financing at a fixed 3% rate. This is crazy to say no to…
So, we went about the length application process with FSA and pursued the application. During this time we put together budgets, cash-flow statements, crop plans, and worked on pre-purchasing inputs.
To date, it looks like it’ll be roughly a 2% ROI, but that is an astonishing 2,800% Cash-on-cash. So, is this a great ROI investment? No! No one gets into farming for a large cash return. However, it’ll build equity in a way that I can expand the farm every few years and it’s a very safe investment in my area.