On the 31st of August, two pioneering digital real-estate companies found a buyer and seller … in each other. EasyKnock’s residential sale-leaseback company acquired Farmland Finder, an online marketplace for farmland. The two companies aim at expanding the sale-leaseback model they both adopt.
The latter company was founded in 2016, in Iowa, USA and expanded through the rest of the country.
There was a common agreement that this acquisition would improve EasyKnock’s reach and bring in their sale-leaseback model. Furthermore the company would operate under a more flexible structure and gaina access to a broader aucience.
FarmlandFinder has been around for several years, but the sale-leaseback component for the company only began in early 2021.
In addition, Farmland Finder has been in existence for about five years but this new sale leaseback model began this year
The Sale-leasebacks model in farmland aren’t new. – Farmland Finder grew on its existing online platform to make them easily accessible to farmers.
The sale-leaseback model
The structure of the sale-leaseback model is as follows. An investor acquires the land from the farm owner-operator and then leases it back to them on a long-term basis. The intention is to provide value to farmers who are seeking an alternative financing solution. This kind of system provides liquidity to the farmer initially. Moreover, it allows them to maintain control of the land. All in all, Farmland Finder, helps connect farmers with qualified investors for this venture.
“It could be a good program for a retiring farmer whose equity is tied up in the land… But they’d like to keep farming…,” Peter Jaques, head of real estate at FarmlandFinder, said previously.
“Or a progressive farmer who wants to take the equity from one property and use it to buy another piece of land. …This could be useful is when a farmer has fallen on hard-times and they need to free up some cash. It may not be ideal, but at least there’s an option.”
Similarly, EasyKnock, which is located in New York, works with the sale-leaseback business, however, for a more traditional residential market. The strategy enables American homeowners to convert their equity to cash by selling the property to EasyKnock. In addition, remaining in control of the equity as a renter.
“The addition of our rural farmland offering with EasyKnock’s products, platform, and reach is powerful. We are able to offer a new option for more Americans looking for liquidity,” said FarmlandFinder founder and CEO Steven Brockshus.