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Moorhead, MN | Given the thread below, I thought I'd mention a couple investments that I've recently had clients invest in (I'll i've done here is make introductions to experts in the two industries). Basicially, guys are taking this year's profits and investing (some) in long-term income producing assets. I've had guys participate in two projects recently.
1) One of my clients is "participating" in the drilling of four oils wells in Western North Dakota. He has purchased a small amount of mineral acres and is participating in the drilling costs on the same basis as the oil company (and will receive his pro rata share of the oil revenue). Based on my conservative math, he should see a 1.5x-4x ROI over a 10-year time frame (5%-30% IRR). And, he gets to write-off the drilling expense against this year's income!
2) Another one of my clients is builing warehouse condos in Fargo, ND. These are warehouse buildinsg that are split into 4-6 smaller units and leased to small businesses. He borrowed about 50% of the purchase price at a crazy low interest rate and with 80% of the building leased, he'll generate a 12.5% pre-tax post-expense ROI. If/when the other units lease, his ROI will jump to 15% (units are still being constructed so we exepect the occupancy rate to increase).
These are not completely hands-off, no-worry investments but should generate good long-term income with the revenue under most scenarios projected to increase in an inflationary environment.
Edited by MWASNick 10/18/2012 13:07
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Real-world examples of diversifying away from ag investments
