Earn An Average of 15.17% Per Year From This 100% Organic Agricultural Play
After more than a year of research and due diligence, I am delighted to be able to introduce you now to an agricultural project I’ve found that provides the potential for excellent cash flow.
This new opportunity is a bit different from others I endorse. In this case, the crops aren’t grown in dirt… but in water.
With these aquaponics systems, you own the systems… the equipment. The farm operator manages the production of the produce and fish. You get paid from the production of your system in return for renting it to the farm operator.
Projected annualized returns average better than 15% over 20 years.
Let’s back up a bit…
Aquaponics is a rapidly developing food production industry that combines hydroponics and aquaculture. Hydroponics is growing vegetables without soil. Aquaculture is raising fish in an enclosed system.
When you connect a hydroponic system to an aquaculture pond, you get aquaponics… a highly efficient and profitable way to grow food that is also more sustainable than growing vegetables in dirt because it uses up to 90% less water.
Aquaponics doesn’t work for all vegetables, and it doesn’t work for fruit trees. However, it works great for leafy greens-lettuces and herbs. Depending on the type of system, you can also grow tomatoes, cucumbers, and even broccoli.
In the case of the particular aquaponics investment opportunity I’m bringing to your attention, the farm operator is focused on leafy greens.
100% Organic
The other upside to aquaponics versus dirt is that an aquaponics system makes it very easy to grow food organically. And organically grown produce commands premium prices.
The cash flow generated from the systems comes from two sources-the vegetables and the fish. Lettuce can be harvested as many as 17 or more times a year (or about every three weeks). Fish are harvested twice a year.
An aquaponics growing system means built-in diversification. You have two revenue streams. In addition, you have the opportunity to customize harvests to match demand. It’s possible to change the produce being grown every three weeks, meaning the farm operator can adjust production to what restaurants and other buyers require.
Cash Flow Within 12 Months
Another big benefit of an aquaponics system is that it can begin throwing off cash flow very quickly. The set-up time runs three to six months. In the case of the operator I’ve identified, the payout is twice a year after the first fish harvest. This means your first revenue is projected to be generated within the first 12 months and then every six months thereafter.
This particular opportunity is based in Thailand, the breadbasket of Southeast Asia. Why hydroponics in a country known for abundant food production?
First is the loss of arable land due to development. In addition, leafy greens aren’t easily grown in a tropical climate. Meantime, the demand for leafy vegetables is increasing in this part of the world as the local middle class grows.
On top of the local demand is also rising demand among tourists. Foreign travelers want their healthy salads… and there are more foreign travelers here all the time.
In addition, Thailand is centrally located for export to China, the Middle East, Singapore, and other regional destinations with growing demand.
You Earn 15.17% Per Year For 20 Years
In the case of the opportunity I’ve identified, you buy the aquaponics system. Then you engage the farm operator to install and manage the system.
The cost is $31,000 and includes the system and access to all farm infrastructure that the operator has put in place.
For the first three years, the farm operator gets 15% of the revenue from production. After year three, the operator gets 20%.
Over a 20-year period the projected total return is more than $130,000.
Projected annual yields start at 10.49% and increase with the production of higher value produce (the initial projections are based on basic lettuce production only).
The 20-year IRR projection is 15.17%.
Understanding The Risks
Of course, you want to understand the associated risks, which are to do with politics, the economy, and currency.
Coups are not uncommon in Thailand, but they don’t generally affect day-to-day life in the country. The country’s former king helped to keep things calm during administrative changes, and the new king is expected to be able to play the same role.
The Thai economy is strong and continues to grow. Projections are for growth of 3.2% in 2017.
The currency in Thailand, the baht, has traded in the range of 34.5 to 36.5 to the U.S. dollar over the last few years and is currently at around 34.5. No one can say how long the U.S. dollar will remain at its current level versus the baht. However, the farm operator is capping revenue payments at 36 baht to the U.S. dollar for the first three years.
In other words, should the baht weaken beyond 36 to the dollar, system owners will still be paid at an exchange rate of 36. This minimizes the downside currency risk for the first three years.
Many expect the baht to appreciate against the U.S. dollar which would mean your returns in dollar terms would be higher.
First Investors Already Receiving Payouts
This is an early-in opportunity, but the farm operator has moved beyond the start-up stages. The first greenhouse has been operating long enough that those system owners are receiving their first payments this month.
The second greenhouse has been built and those systems are currently being installed.
Systems for the third greenhouse have been sold, and the third greenhouse is under construction.
One other risk for an opportunity like this is selling the production.
To date, the farm operator has sold everything produced.
As the operation continues to expand and more production is coming online, more buyers are visiting the farm and placing orders. As of this writing, the operator has commitments from buyers that outstrip the production of the first three greenhouses… and more buyers continue to line up.
This is an excellent opportunity to create a good and almost immediate cash flow from organic agriculture.
Lief Simon
InvestGPS Team
