When (and how) can you sell AcreTrader investments?
In most cases, investors should consider their capital committed to a deal for the full term. With that said, AcreTrader intends to offer a secondary market, so there could be potential for liquidity in the future.
Going mobile: Is there an AcreTrader app?
AcreTrader doesn't have an app for your smartphone or tablet, but it has a mobile-optimized website that makes an app unnecessary. You can complete account setup and funding and invest in deals on AcreTrader with your smartphone just as easily as on a desktop. You'll also have full access to documents, your portfolio, and every other resource you would find on the desktop version of the AcreTrader website.
AcreTrader risks: Is AcreTrader safe to invest with?
Each deal is structured as a stand-alone legal entity (in this case as an LLC) so that if AcreTrader were to fail, your investment would not be at risk. Moreover, since each farm has a separate operator, there should be no impact to the farm's operations if AcreTrader were to fail or otherwise struggle. There could be a temporary interruption to some things, including distribution payments or tax documents, until a replacement asset manager could be identified, but your core investment would be generally unaffected. Though that risk seems remote since AcreTrader recently raised $5 million of additional seed capital while growing its funds raised on the platform twelve-fold in 2020.
The biggest risk investors take on with a deal on AcreTrader is the farm operator failing to meet their obligations, causing an interruption to expected cash distributions paid to investors. AcreTrader says it structures deals to mitigate these risks, with cash rents paid before planting seasons and via crop insurance farmers purchase. It's your job as an investor to make sure you understand how each deal you invest in is structured to protect your capital and potential cash flows. The company made that a little easier in 2020 by previewing farms prior to listing the offering. This information on the farm gives investors the time and resources to make a more informed investment decision.
It's also possible that mismanagement of a farm could result in the decision to sell, and potentially at a loss, if a replacement operator can't be found quickly. AcreTrader plays an important role here, since it is responsible for putting a farmer in place if there's not already a farmer leasing the property. It is also responsible for managing the farmer and holding them to their contractual obligations.
In many ways, this is no different than any other commercial real estate deal; sometimes things go badly, and investors lose money if the operator of the property struggles or fails. However, because there is no debt tied to these properties (so far they've been cash deals where investors own the entire property unencumbered by debt), and since farmland tends to hold value and is always in demand, the risks are probably lower than in any other commercial real estate type.
But with that said, investors should take the time to understand exactly what they're getting into before they invest -- with the understanding that low risk doesn't mean risk-free.