Capital raising/business structure for broadacre project

I have had some early discussions with a couple of folks on the financial well-off side who are interested in backing a broadacre permaculture development. They are concerned about the future (food supply, gmos, financial breakdown) and also want a different sort of vacation and retirement experience than the beach and playing golf. And they are willing to pay ($30-50k is what they are talking). But they don't want to live full-time on a farm (unless there's a meltdown). They are also interested in tax benefits that can flow from a farm enterprise.

My goal here would be to build a broadacre permaculture development with no debt. I want to utilize this opportunity to put together a demonstration site in the SE US that shows permaculture can be a viable alternative to BigAg. It would also serve as a point of contact for education (whether local schools or land grant universities). Hopefully, this could eventually become a model for other ambitious permies out there.

So I'm thinking of a structure that works somewhat like a time share, utilizing a limited liability partnership. Putting aside issues the legal issues and issues of control (it will be structed in such a way that permaculture mission could not be abrogated), what are the Board's thoughts? I'm still defining the contours of what this will look like, so any input is appreciated.

I think an LP would work with a separate LLC (controlled by the permie in charge) serving as the general partner. That's how your average hedge fund (hah!) is set up. Returning to the hedge fund's roots as it were (I can't resist!).

Buying the land would of course be the biggest cost. If you raise $100k total, you are probably looking at spending at least half of that on land.

Where in the SE would this take place?

The rest of the funds I imagine would go towards capital improvements and setting the place up. If you're going to be building wofati and Holzer style animal shelters along with ponds and hugel beds, what does a day of trackhoe rental cost in your area?

Fortunately seeds are pretty cheap.

A year ago, I was looking intensely at properties in the SE. From what I found, Tennessee has the best prices for land (with existing structures), and some of the lowest property taxes anywhere (counties provide few services, hence low taxes).

They also have a great property tax lowering incentive with their "Green Belt" program.

If your 'clients' are 65 years old, they can buy a lifetime Hunting & Fishing License for $270

If it wasn't for the summer heat/humidity, I would be living there today!

Neal McSpadden wrote:
Where in the SE would this take place?

I am from East AL (grew up on a small homestead there before treking off to school) so that's what I know, where my support network is, and have a desire to return and build community. My g-g-great grandfather settled a huge area off the mountains there in the 1850s, so I have a recognizable last name in that area. Its readily accessible to Atlanta and Birmingham (less than 2 hrs to both). There is an existing USDA-inspected custom slaugther/processor in west Georgia, and another coming on line there this fall that might be adding custom poultry, so having them close (less than an hour drive) is very attractive. Plus an investor can fly in to the Atl airport easily from pretty much anywhere. That also goes for potentially hosting PDCs, workshops, ect.

John Polk wrote:A year ago, I was looking intensely at properties in the SE. From what I found, Tennessee has the best prices for land (with existing structures), and some of the lowest property taxes anywhere (counties provide few services, hence low taxes).

AL is the same on property taxes. Not sure about Ag exemptions. I am looking at some beuatiful places in TN but that's not where I have a support network.

John Polk wrote:
If it wasn't for the summer heat/humidity, I would be living there today!

I guess I'm accustomed to it. I was outside in AL all the time as a kid, played football, worked construction before college. I hate reclining by the pool or something like that in that weather, but as long I'm moving/working its fine.

Florida has land for reasonable prices. Property taxes are not bad, but there is no state income tax. This equates to considerable savings.
Ag exemptions begin at 10 acres. If you live on the property, counties cut out 1 acre for residential property tax rate. If you live on the property, you'll need 11 acres to get the ag exemption. If you live on the property you get a homestead exemption of $25000. You can't have both unless you have 2 properties: live on 1, the other is 10 acres or more.

I would look into land that has owner financing. The no debt is a laudable goal, but starting a business and getting through the first few years can be rough going -- especially with something like permaculture. Even if you have the capital to pay off the land in full, I would try to avoid doing so until you have proven that your operation can be profitable and you have an income that is self-sustaining from the property. If you don't do this, you run the risk of exhausting your startup capital and needing to look to outside sources for more financing.