“Whiskey is for drinking, water is for fighting over.”– Mark Twain
Since last year I have actively been leading my family’s real estate business. The more and more I see valuations in my area and more importantly the standard of living, the more I’m drawn to a simpler life. The life provided here seems inorganic. There is no genuine satisfaction in terms of work and relationships. My family has done well here, we’ve never missed a meal. As times change and the location is being more and more saturated, I think it’s time for a move.
Nothing seems more fulfilling than living the life of a rancher. It is a tough business but there is a tranquillity and importance to the activities you do. Rural, agricultural farmland with onsite water seems to be the next step for us.
Why? The thesis is simple, yet grounded in common business sense and more importantly observing where the “smart” money is also moving their capital to. Productive farmland in States and their Counties that are relatively conservative, hold exceptional rights for landowners, have abundant freshwater water sources (on land and underground), and an established farming business are our focus. We’re not farmers by trade, well at least not in this country. My family owned one of the largest ranches in Damavand, Iran. My Father grew up with horses, cattle, chickens and he was working the ranch since he was a young boy. To this day, he sees nothing more fulfilling than the life of a farmer. Now, the economics just make sense. In fact, it may be time to relocate assets from our real estate business here in California to a state with sustainable water sources and where the landowner has exceptional rights to fruits that they bares from their estate. Also, the demographics for farmers do not look good for the future of the industry. Many of them are also soon to retire.
Where? I’m working on answering that. It’s tough. All we’ve known our lives have been California and Washington. Both States that do not possess the abundance of water we believe will be essential for sustainable farming. Therefore I’m tasked with 1) finding the best States/Counties for farming; where farmers rights are not in question, water is abundant, location; weather, soil, proximity to markets is exceptional. 2) The farm is productive; exceptional produce/livestock and a quality management team. 3) At a fair price.
How? 1) We will either embark on this venture as a solely family business, or by assembling a team of farmers and experts to acquire farmland in west and the midwestern States. If we decide to run the operation more as a family business, then purchasing the farmland through exercising 1031 Exchange will be necessary. If this is a business we’re looking to scale, I believe that building a team would be best and we can leverage the experience of farmers (as our partners) to qualify for FSA farming loans and other incentives.
When? Sooner the better. With where we are at the moment it seems like by next quarter we can be more sure about where in the US we’d relocate and by then we’ll have a understanding of the local market (potential sellers).
Now I will spend hours a week reading and familiarizing myself with the business of farming. The key inputs, their costs, the risks, all why speaking with experts in the industry.