I Just Bought A Coffee Farm in Panama. Here's why...
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- Опубліковано 10 жов 2018
- Blog Post: retipster.com/coffeefarm?utm_...
UPDATE: Panama Coffee Farm (3 Years Later): Is It Making Mone Yet?: • Panama Coffee Farm Upd...
And don't forget to listen in on our conversation with David Sewell, Founder of International Coffee Farms: retipster.com/27
Want to invest with International Coffee Farms? Check them out through the REtipster affiliate link and learn more about how it works: retipster.com/coffee
Given my interest in farmland, I was fascinated when my friend Keith Weinhold told me about a company called International Coffee Farms he was investing in.
Here's how it works:
- An investor can purchase a half-acre parcel of land for $18,900 ($18,000 for the land purchase and $900 for the transfer taxes).
- International Coffee Farms (ICFC) acquires underperforming suitable raw land and existing coffee farms in Panama that can be planted or "turned around" to become very productive, Specialty Coffee farms.
- Once the property is deeded to you in your own name (or entity), - - ICFC provides turnkey management, so it creates a truly passive source of income for decades into the future.
- The average annual return is projected at 12%. Cash flow typically begins 15 - 18 months after you invest your money, and the money is paid annually.
- Aside from the solid, long-term prospective income from this kind of investment, it also provides a good, honest career for the local farmers and their families in Boquete, Panama. - They get paid living wages that include education, medical, pension, and accommodation benefits.
If you care at all about investing in socially and environmentally sustainable projects that actually help people and improve the world (i.e. - things that give real estate investors and capitalism a good name), this is something you'll probably be interested in.
So how exactly does an investor make money from this kind of investment?
When the coffee farm generates revenue, the first 20% goes to pay the coffee farmers and all related expenses of running the farm operation (wages, seedlings, equipment, etc).
The next 16% portion goes to pay the administrative expenses of running ICFC.
After those upfront operating expenses are covered, the remaining 64% gets paid back to the investors.
All the Panamanian taxes are paid before you receive this money, so you don't have to worry about paying any portion of your distribution to the Panama government (however, you will have to report this income on your federal tax return).
In the early years of the operation, the farm doesn't have much to produce because all the plants start as seedlings and aren't big enough to produce a harvest. However, as the trees continue to grow, so does the harvest, along with the global revenue of the coffee farm, and that's where (according to the projections) things start to get fun. :)
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For everybody getting excited about this let me break it down for you. I own several coffee farms in Colombia and own land in panama and work with coffee on a global scale.
1/2 an acre of coffee will accomodate roughly 1000 coffee tree depending on the variety. Each coffee tree yields approximately 400-500g ( 1 pound ) of green coffee annually. Expensive Geisha varietals only yield around 300g ( .8 pounds) annually.
So we have 1000 trees x 500g yield per annum. Approximately 500kg annually.
If you are wanting top dollar for coffee than it would most likely only be around 250-300kg annually.
The average price of a decent green panama coffee is roughly USD $5
So the maximum gross profit is roughly $2500. Average cost per kg to maintain equipment, land, fertilise and pay staff, electricity, land rates, water etc plus a bunch of things that go wrong every year all add up to about 75% of total profit.
Which leaves roughly 25% as potential profit in a good year.
$2500 x .25
$625 is what I would estimate profit will be annually once trees mature enough to produce their first flower and fruit.
Actual annual return on this investment will average roughly 2.9% over 20 years including the first 4 years of no return.
The coffee farm game is tough.
Much easier ways to make money.
I could understand this, and as you responded to my comment, that was my original hunch. Coffee isn't an easy way to make coffee especially specialty coffee. I appreciate this!
@@markkut don’t get me wrong, it is very rewarding in many ways, just not not very profitable.
Most of our farms are experimental and make no money.
We make money buying cherries and processing the coffee at our own beneficio. Where we focus only on 88+ point coffees. This is where we make money with coffee.
@@Leo-eb1wl Would like to hear more about beneficio - any way to get in touch?
Also not to mention that half an acre is .2 hectares. That makes the hectare price $90,000. You can buy your own hectare in Boquete for around 40 to 50 thousand. Add in another $40,000 in coffee trees and machinery and you own your own coffee farm with no management fees.
@@arthasgrinds7039 I'm interested in learning more about coffee and the industry as a whole as a Latam enthusiast. Any recommendations you'd give on where to learn more? Thanks in advance.
Love this Seth! I am looking into it. Thanks
Cool! Let me know how it goes, Steve!
This is really good to get into, especially right now with high demand for this type of coffee. More people in the US and abroad want delicious small batch specialty coffee.
Thanks for the feedback! I would agree (obviously). :)
I can't wait to try some of your coffee!
Me neither!
I always learn something new from you, Seth! Thanks for this. I am now going to look at similar opportunities in Malaysia, Cameroun and Nigeria, but instead of coffee the crop is palm trees which produce palm nut, palm kernel oil, etc.
That's a great idea! Sounds like something I should look into too. :) I hope you find some good properties!
Thanks! I'll let you know how it goes :)
Awesome video!! Very informative!!!
Glad you liked it Ryan! Thanks for watching. :)
Thanks, Seth, for showing how this works. The love of coffee is older than the US Constitution with a long track record for being a growth industry. Cool idea.
Thanks Ted! I agree. :) Glad you enjoyed the video.
It's a Muslim invention, just saying.
I really appreciate this video thanks
Thanks for watching!
Is there more information somewhere on how to use a self-directed IRA for this purpose. The mechanics of it. Hard for me to visualize how that can happen given the management & reporting requirements. Would be helpful.
Can you do an update video?
Starting my coffe farm in the highland part of Philippines
How did it go? I’m interested in investing in something similar too 😊
What is the difference in the investment in Belize? I'm interested
Can you recommend a good place for someone with no money to get started?
Love you're video and how do i invest in a coffee farm i am very interested
I purchased a plot and my experience has been terrible. I Purchased it I’m 2020 and I still have no idea when my deal will be finished, but you can bet my money has been taken.
What has been terrible about the experience? Just a lack of communication or something else?
@@Retipster My deals not finished yet. I wired the money to purchase a .5 acre lot in January 2021. From an existing investor. Then after I sent the money I could not get in contact with David for months then he tells me that the lot I purchased doesn’t exist yet. I talked to him last month and he said he couldn’t get back to me because of some excuse and told me he has no idea when the half acre I purchased will exist it’s been 18 months so far. To me because of my experience I am extremely worried if they will be a good stewards of my capital for the duration of the farms useful life.
It has been 3 years since this video aired. How is it going?
Great question! I'm hoping to do a follow-up video about it sometime in the next 6 months or so. Stay tuned!
how much wholesale 1kg coffee?
Great video, thanks man. it's been a year now, how are things going?
Thanks for watching Donovan! It's projected to take 3 years before it turns any profit... so at this point in time, I'm still playing the waiting game.
@@Retipster Okay, sounds good! Do you know have any pointers on coffee private labeling?
@@donovangumbo388 I don't, unfortunately. That's a bit out of my wheelhouse. Sorry!
@@Retipstercan you give us an update?
I would love to get into this. Not sure how to tho...
You can sign up on this page to learn more: retipster.com/coffee (this is the company that manages the turnkey coffee farms in Panama).
20k really does sound like a bargain
As a specialty coffee roaster, this is very intriguing. This was posted in 2018, how is it goin so far there?
It's goin good! Thanks for watching. It's supposed to take 3 years before it starts producing actual cash flow, so, now that I'm 2 years into it, pro forma is right on track. :) I should have more helpful information in about a year.
I am also a specialty coffee roaster and farm owner in Colombia. Making a profit of half an acre of land through coffee will not yield you 20%. If you are lucky, in a good year you’ll make 3%.
The only real benefit will be a marketing one for your roasted coffee business.
Hi Mr. Seth, good day!
I am Vergel from the Philippines and I am looking for a potential investor of coffee farm in the southern part of Luzon area here in my country.
I know that this message may come to you as a surprise, but I would like to take advantage of asking you about your interest in investing a property here in the Philippines. Just watched your video and find it informative. Hope that you notice my message. Your response will be very much appreciated.
Thank you very much!
I'm considering investing in teak plantation in Nicaragua,ECI development.
Sounds cool! Though, I'd be careful with Nicaragua and what's going on with the government in that particular country.
@@Retipster Yeah that's been holding me back
Just curious - how has this worked out for you?
So far, so good.
hello sir!
It's been 3 years how's the coffee farm going??
You can see the update here: ua-cam.com/video/OYqA_sRMCPk/v-deo.html
you don't BUY a "COFFEE FARM" you baught an obligation (piece of paper, that gives you potencial parcial ownership of the company that operates out of your active control)....people are awesome....
Not unlike buying a rental property that's managed by a property manager. I own the property and employ someone else to make the thing profitable. As long as the property manager (or farm operator, in this case), does a good job, I'm okay with that.
Hey can I be a supplier for you like sell your coffee ☕️?? Thank you!
Any word now on your coffee farm from AgroNostros? Hard to vet any of the other investors. I wonder if the Covid-19 crisis slowed them down to a degree?
My parcel wasn't projected to make any money until about 3 years (later this year)... so I don't have much to report right now, but hopefully, I will in the next 12 months. We'll see!
Can you give an update on how this investment has worked out for you? We are now in 2020.
The parcel was projected to earn $0 of revenue for the first 3 years and then start ramping up from there. Now that we're 1.5 years into it, it's right on track. :)
@@Retipster what happens after 20 years? Do you still own the land? Didn't quite get that point in the video about 20 years
Now that I shitted on how his accent sounds, I still can't disregard the information in this vid. Why so many dislikes?
I bought land in Panama, but didn't give away (the farm) my crops to the coffee cartel. It pretty much runs itself and remains an investment.
Cool! How did you work that out? Are you leasing it to a local farmer? I'd love to hear more.
@@Retipster gave the family a free home (homestead)
@@Retipster just waiting for the Macadamia's to grow.
@@kalbertine - wow, that's very kind of you!
@@kalbertine are you growing coffee as well?
I wish this could be developed in the Dominican Republic, my homeland.
Maybe someday Ivan! If you ever find an opportunity like that, let me know.
@@Retipster we have a coffee farm that has been in our family for 60 years but we can't find workers and the rule of law is lacking
Yeah, I'm sure the local laws and labor pool have a TON to do with the feasibility of this kind of investment (and most of that is way over my head... which underscores the importance of having a good management team in place).
Ask the attorneys, real estate agents and accountants / auditors of tobacco plantations in the Dominican Republic. They will show you the ropes.
Can you live on your land?
Nope. That's not the intended use with this kind of investment.
@@Retipster okay, thank you
Great idea for my self directed IRA
I thought so! Thanks for watching. :)
Panama isnt that scammy?
Alot of scammers
I have legit concerns about not only your investment but the equity going to these workers. Coffee is often a slave business taking advantage of people living in abject poverty. I really hope your not perpetuating that. Also curious to know prices paid per kg of coffee they produce. The fair trade bullshit is wage slavery. Quality Panamanian coffee which is some of the best in the world should go very high
Thanks for sharing your concerns. We actually addressed some of those things in this conversation, if you're interested in learning more about how they treat and compensate the workers: retipster.com/27
Half an Acre? That’s nothing!!!!
It all depends on what it's being used for, and how much revenue it's able to produce.
It is totaly a scam
jeez the voIce annoys me so much