SPV Larsen Farm, LLLP

Madison County, Iowa

$6,112
Syndicated $/Acre
$488,942
Syndicated Value
$313,942
Offering Size
$5,000
Min. Investment
10 Years
Target Hold Period
8.4%
Leveraged IRR
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Asset Summary

SPV Larsen Farm, LLLP (“SPV Larsen Farm” or the “Farm”) acquired an 80-acre property located in South Central Iowa just outside of the Des Moines Metro area. The asset includes 70 acres of land suitable for transition to tillable farmland and a 5-acre building site. The Farm is eligible to receive USDA organic certification to produce organic feed grain products and will be professionally managed by Peoples Company, a nationally recognized firm that offers land management, appraisal, brokerage, and investment services in 22 states across the country.

Located in Madison County, Iowa, SPV Larsen Farm was enrolled in a Conservation Reserve Program (“CRP”) through the Farm Service Agency in 2009. Due to there being no application of synthetic chemicals or fertilizers on the Farm throughout the ten-year duration of enrollment, the Farm became eligible for organic production immediately after exiting the program in October 2019. The Farm is eligible to grow organically certified corn, soybeans, oats, and edible beans. Organic certification is actively by being pursued by SPV Larsen Farm through International Certification Services, Inc.

Being in the heart of the Corn Belt and just outside of the Des Moines Metro, the Farm is highly sought after by farm operators. This location is associated with strong agricultural production and therefore experiences consistent tenant occupancy.

The SPV Larsen Farm is being transitioned to tillable farmland through a ground preparation process that entails controlled burning, clearing trees and brush, and discing the land to prepare for planting, while improving soil health and stimulating growth. Opportunities exist for yield optimization through soil drainage improvements that will improve crop health and provide better conditions for completing field operations.

Investment Highlights

  • The minimum purchase is 5,000 Limited Units, or a $5,000 minimum investment. Additional purchases can be made in 1 Limited Unit increments ($1.00 increments).
  • 10-year target hold period given stable cash flows and potential for material long-term appreciation.
  • The $175,000 non-recourse loan is subject to a 20-year amortization and 10-year fixed rate of 4.05% with annual payments due to the lender.
  • Farm improvements being implemented in Year 1 could improve investor return through optimized farm rent.
  • Limited Partners in SPV Larsen Farm will receive annual rental income, based on $225 per acre for 70 tillable acres. Annual rental income will be used to satisfy the Farm’s annual operating expenses.
  • The property will be managed by Peoples Company, a partner of mAgma, LLC, for an annual management fee of 5% of annual rental income.
  • Any income not used to pay annual operating expenses will be held in SPV Larsen Farm’s cash reserves. Upon the end of the target hold period, or otherwise at the general partner’s discretion, total cash reserves, including any cash remaining from initial cash reserve contribution, annual rental income and/or building site sale proceeds, will be distributed to investors in an amount proportional to their interest in the SPV Larsen Farm. If the SPV Larsen Farm asset is sold prior to the end of the target hold period, net proceeds from the sale of the asset will also be distributed to investors on a pro rata basis.

Risk Factors and Disclosures

mAgma, LLC and its affiliates, including its members, managers, employees, and authorized agents, are not Registered Investment Advisors, Broker/Dealers, Financial Analysts, Financial Banks, Securities Brokers or Financial Planners. Information and services are provided for information purposes only and are not intended to be and do not constitute financial advice, nor a recommendation to purchase, sell or hold any security, or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice.

Private Placement Offerings are being made pursuant to an exemption from registration pursuant to Rule 506 of Regulation D promulgated pursuant to the Securities Act of 1933 (the “Act”) and various state exemptions from registration. The Limited Partnership Units (“Limited Units”) will be offered to accredited investors who meet certain qualifications, as defined by the Securities and Exchange Commission (“SEC”) in Rule 501 of Regulation D of the Act. These qualifications are defined as an individual with either $1 million in net worth (all assets, excluding primary residence, less all liabilities); or net income for the last two years of $200,000 or greater ($300,000 if spouse has income) with a reasonable expectation of such earnings in the current year.

Neither the SEC nor any state securities commission has passed upon the accuracy or adequacy of the information contained in the Private Place Memorandum (the “PPM”). These securities have not been approved or disapproved by the Securities and Exchange Commission or any State securities commission. Any representation to the contrary is a criminal offense.

The Limited Units have not been registered under the Securities Act or any state securities laws, and may not be offered or sold, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Further, a transferor of Limited Units must comply with the transfer restrictions set forth in Section 10.1 of the Partnership Agreement, which include but are not limited to the following restrictions: (a) the transferee of the Units cannot be: (i) a shareholder in an authorized farm corporation as described in Iowa Code Chapter 9H; (ii) a beneficiary of an authorized trust as described in Iowa Code Chapter 9H; or (iii) a limited partner in another limited partnership owning or leasing Iowa farm land; (b) the transfer cannot cause the Company to be in violation of Iowa Code Chapter 9I; (c) the transfer cannot cause the Partnership to be treated as a “publicly traded partnership”; and (d) the transfer cannot cause the Company to be an “Investment Company” under the Investment Company Act of 1940.

Investors should carefully read the PPM, the Subscription Agreement, and the Partnership Agreement before purchasing units.

Investors should fully read all risks related to the business and real estate investments as detailed in the Subscription Agreement and PPM. The risks of the investment include the risk of loss of the Investor’s entire investment and the lack of liquidity of the Limited Units. Investors should understand that the transfer of the Limited Units is restricted by federal and state law, that there will be no public market for the Limited Units, and that it may not be possible to sell or dispose of the Limited Units. Investors should be prepared to hold the Limited Units until the earlier of the sale of all or the vast majority of the Company's assets or dissolution of the Company. Investors should further understand that transfer of the Limited Units is restricted by the Partnership Agreement and that the transfer of the Limited Units must comply with the transfer restrictions set forth in Section 10.1 of the Partnership Agreement.

Each investor should consult his/her personal legal, investment and tax advisors with respect to the risks associated with an investment in the Company. Each investor must warrant that the subscriber meets various investment requirements as set forth in the Subscription Agreement and PPM and must follow the certification process incorporated into the mAgma platform.