How to Buy a Farm With Investor Capital in 2026
by Raises.com
This article is general information, not legal, tax, securities or investment advice. Laws, rates and programs change, and the details here may no longer be current. Confirm anything you plan to act on with your own counsel and accountant.
A farm bought with investor capital is two acquisitions, the land and the operating business on it, and investors fund it when each half is underwritten on its own. The land answers to title, water rights and an appraisal. The operation answers to its financial statements and the person who runs it. Blend them and investors cannot tell which risk they are buying.
Why a farm raise is a real-asset raise
Ade, who worked with Raises.com® and went from no funded deals to two closed acquisitions, built his investment philosophy around real assets, defensible industries, capital preservation and sustainable returns that are predictable. A farm raise has to answer in that vocabulary. The land is the preservation half, and the operation is where the predictable return has to come from. Each half needs its own evidence.
Dave Klivans, co-founder of ag.online, LLC, is a real estate operator who worked with Raises.com®, and his holdings include a memory care facility secured by SBA and commercial bank debt. His next plan is farms. He wants to grow from one farm under ag.online to ten within three years. That is a plan, and his review states it as one.
1. Split the land from the operation
Put the land in one entity and the farming business in another, with a written lease between them, because the two carry different risks and can take different investors. The land entity owns the acreage, the buildings and any water rights tied to the land. The operating entity owns the equipment, the contracts and the payroll. It pays the land entity rent.
The split lets a lender underwrite the land on its collateral and the operation on its cash flow, and it lets an investor choose the risk they want. A preservation-minded investor can sit in the land. One who wants the operating upside can sit in the business.
2. Underwrite the operator before the acreage
A farm's cash flow depends on who runs it, so lenders and investors ask who farms the ground after close and what that person's record shows. When the seller is that person, the transition plan is part of the deal. If it is you, show the seasons you have run. A tenant operator makes the lease the business plan.
For the operation, the data room holds the financial statements and tax returns, the equipment list with titles, the supply and sales contracts, the insurance history, and any farm program records. Missing years read as missing answers. Ask for them before the purchase agreement, while the seller still wants the sale.
3. Quote the debt before you raise a dollar of equity
Equity fills the gap. You cannot size it until the debt is quoted. Farm debt comes from commercial banks and from the borrower-owned lenders of the Farm Credit System. The USDA Farm Service Agency also makes farm ownership loans, but its eligibility rules are written for family farm operators, so read them before you count on one inside an investor-owned entity.
Lenders read the whole sponsor. Raises.com® consolidated Dave's holdings into a single data room and built a family-office-level financial model across his personal and business entities to surface the debt service coverage ratios his lenders required. A farm lender reads your other holdings the same way.
4. Size the equity gap and pick the exemption
The equity gap is the price plus closing costs and working capital, minus the debt and any seller financing, and it should be one number before you speak to an investor. On a crop farm, that working capital has to reach the first harvest. Then pick the Reg D exemption, because it decides who you can ask.
Rule 506(b) allows unlimited accredited investors and up to 35 non-accredited ones and forbids general solicitation, which suits an operator whose investors already know them. Admitting non-accredited investors also triggers the disclosure Rule 502(b) requires. Rule 506(c) allows advertising if every investor is accredited and verified. Under either rule, Form D is due within 15 days of the first sale.
5. Hand off the sourcing if pitching is what stalls you
In his written review, Dave calls himself "highly introverted" and says he "didn't enjoy shmoozing with people to try to win their investment funds" before he found Raises.com®. That pitching had become the single biggest constraint on his growth. So he handed it off.
When he engaged Raises.com®, the team went straight to work sourcing debt and equity for multiple large deals he already had lined up. "I source deals (which is what I'm great at anyway)," he wrote in May 2026. Debt and equity now run beside his deal sourcing. He has since started referring people in his network.
6. Give each farm its own SPV
An operator planning ten farms should buy each through its own special purpose vehicle, so a bad season on one farm stays away from the next farm's investors. Each SPV gets its own operating agreement and subscription documents. The PPM template carries over; the deal facts do not.
The SPV is also where the foreign-ownership question lives. Under the Agricultural Foreign Investment Disclosure Act, a foreign person who acquires an interest in US agricultural land reports it to USDA, and an entity with enough foreign ownership counts as one. Several states also restrict foreign ownership of farmland. Ask each investor's citizenship in the subscription agreement and check the farm's state before close.
Land vs operating business in a farm acquisition
Underwrite the two halves side by side before the PPM is drafted.
| The land | The operating business | |
|---|---|---|
| What the investor owns | A share of the entity that holds title | A share of the entity that runs the farm |
| What pays the investor | Rent from the operating entity under the lease, and the land's value at sale | Operating cash flow after rent, debt service and wages |
| What the data room holds | Title report, survey, any water rights, environmental reports, the lease | Financial statements, tax returns, equipment list, contracts, insurance history |
| What a lender lends against | The land as collateral | Cash flow and equipment |
| Main risk | Title, water and use restrictions | Weather, prices and the operator |
| Who it suits | Investors focused on capital preservation | Investors who want operating upside |
Frequently asked questions
Can you buy a farm with investor money?
Yes, through an SPV that sells interests under a Regulation D exemption, with a PPM, a subscription agreement and an operating agreement behind it. The investors own the entity. The entity owns the land, the operation or both, and you manage it.
Do farm investors have to be accredited?
Under Rule 506(c) they do, and each one must be verified. Rule 506(b) admits up to 35 non-accredited investors if you never advertise the raise and you give them the disclosure Rule 502(b) requires.
What documents do farmland investors ask for?
The offering documents come first: the PPM, the subscription agreement and the operating agreement. Then a model that splits the land from the operation. The data room carries title, survey, water rights, the lease, and the operation's financial statements and tax returns.
Does foreign money in a farm SPV trigger a filing?
It can, because under the Agricultural Foreign Investment Disclosure Act an entity with enough foreign ownership counts as a foreign person and must report its interest in US agricultural land to USDA. Several states also restrict foreign ownership of farmland. Collect each investor's citizenship in the subscription agreement.
Should the land and the farm business be in the same entity?
Keep them apart, with one entity owning the land, another running the operation and a written lease between them. A single entity mixes both risks. Lenders can then underwrite each half on its own terms, and investors can choose the risk they hold.
Raises.com® builds the structure for a farm raise, meaning the PPM, subscription and operating agreements, CFA financial proformas and the data room. That keeps the raise legally and financially sound. See how acquisition capital gets structured at https://raises.com/buy-a-business, or book a strategy call at https://raises.com/call.
General information, not legal, tax, securities or investment advice. Laws, rates and programs change, and the details here may no longer be current. Confirm anything you plan to act on with your own counsel and accountant.