Frequently Asked Questions
How do I access opportunities to invest in Texas Vineyards?
Due to SEC regulations and our unique partnership structure, we must have a pre-existing, substantive relationship with our investors before sending live investment opportunities.
Getting started is simple - join the
Vines Club, fill out the investor form, and schedule a call with our team.
What exactly am I investing in?
You are investing in the growing and harvesting of Texas wine grapes. These investment opportunities are offered through project-specific syndicated development of a new "block" of mechanized wine grape vineyard.
A new block is approximately 320 gross acres (our minimum development unit), maximizing economies of scale.
Our team manages all aspects of vineyard development, management, finance, and reporting so you can enjoy the passive returns.
What types of investors do you accept?
We accept both accredited and sophisticated investors (see definitions below).
You can also invest
through your self-directed 401K, IRA, and QRP funds.
DEFINITIONS
Accredited Investor: Your individual income has been $200,000 or more in the past two years, and you have a reasonable expectation of reaching the same income level this year.
OR Your joint income with your spouse has been $300,000 or more in the past two years, and you have a reasonable expectation of reaching the same income level this year.
OR Your individual net worth (or joint net worth with your spouse) exceeds $1,000,000, excluding your primary residence.
Sophisticated Investor: You have sufficient knowledge and experience in financial and business matters to make you capable of evaluating the merits and risks of the prospective investment.
Are there tax benefits from investing in vineyards?
Yes. Investors can capture tax savings through cost-segregation/accelerated depreciation as well as pass-through losses from the first four years of vineyard development.
Cost segregation identifies costs that would typically be depreciated over 27.5 years and reclassifies them to permit a shorter, accelerated depreciation method.
This segregation model leads to substantial tax savings for the investor versus the standard depreciation model.
If you don't have a CPA, who understands how to help you take advantage of these tax savings,
contact us! We'd love to connect you to an excellent CPA in our network.
DISCLAIMER: Hubbard Capital Group, its partners, and its representatives do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your tax, legal, and accounting advisors before engaging in any transaction.
Vineyard Investing is not for everyone. What type of investor SHOULD NOT invest in vineyards?
NOT For Investors Who Want Extremely Fast ROI or Liquidity: Vineyards take years to responsibly develop to full production.
Once the vineyards are at full production, they provide exceptional cash-on-cash returns for many years.
Additionally, our business plan implements a cash-out refinance that provides investors a return of capital through non-taxable loan proceeds.
What type of investor SHOULD invest in vineyards?
Investors Seeking Portfolio Diversification and Higher Cap Rates: multifamily, self-storage, mobile homes, and other commercial real estate markets can be crowded with buyers, compressing cap rates, and sophisticated institutional competition.
Vineyards have much higher effective cap rates than multifamily when developed from raw land, provide steady long-term cash flow, and are insulated from many factors affecting other commercial real estate classes.
Investors Looking for Legacy Investments: Because vineyards can produce 25+ years without any additional vine replacements, they provide stellar, long-term cash-on-cash returns for the life of the vineyard investment. Additionally, our business plan allocates a portion of profits to a contingency fund set aside for vine replacement post-25 years.
What makes Texas Legacy Vines different from other Texas Vineyards?
Texas Legacy Vines is hyper-focused on
commercial vineyard development and operation.
We maximize
economies of scale by developing each project at a minimum of 320 gross acres. This project size allows us to purchase pricey equipment and eliminate the high labor costs of traditionally operated vineyards.
Our vineyards are fully
mechanized. You won’t see 60+ people pruning, thinning, weeding, or harvesting on any of our established vineyards. After initial vine training (years 0 through 4), a single manager in a tractor can handle nearly all vineyard operations. (see pic below)
Because we eliminate high labor costs, we're able to
sell high-quality grapes at a competitive price, allowing our investors to benefit from increased profits and cash flow.
Instead of vertical shoot position used by traditional Texas vineyards, we build high-wire trellising. This style of trellising
allows us to hang more fruit - about 4X the Texas average.
Why build vineyards in Texas? And why the High Plains AVA specifically?
Texas currently imports approximately 50% of all raw winemaking materials (bulk juice/wine) from mechanized vineyards on the West Coast. Because traditionally operated vineyards in Texas cannot meet the price point or quantity needed,
we are positioned to be highly competitive in supplying Texas wineries with grapes.
In addition, Texas winemakers prefer to purchase local grapes to reduce the complexities and costs of shipping from California and,
most importantly, so they can legally label it a "Texas Wine."
Texas has several primary advantages over California and other areas, such as affordable land, favorable regulatory climate, and better proximity to significant client markets (TX, the Midwest, NY, the Southeast) than the west coast.
These advantages make profitable development of vineyards and disruption of current fruit markets readily attainable.
The Texas High Plains AVA (American Viticultural Area) has many advantages over other AVAs in the state. The High Plains climate has dramatically reduced or eliminated pest and fungal pressures; its has flat and easily navigable terrain, deep fertile soils, hot days and cool nights, a long growing season, low humidity, plenty of sunshine, readily available equipment, and labor due to the existing farming culture, and affordable land.
Is there a dependable water source in the High Plains AVA?
Yes. The High Plains AVA sits on top of the Ogalalla Aquifer.
Two main sources supply this aquifer: 1) paleo water or “fossil water” that was deposited likely sometime during the last ice age 2) water infiltrated from the rain in playa lakes across the area
Additionally, grapes require substantially less water than row crops and many vineyards can thrive on annual rainfall alone. Our vineyards implement drip irrigation lines and we water in pulses (i.e. few days a week, once or twice a month, for just a few months out of the year).
What about weather, insects, and disease-related risks?
Multi-peril/crop insurance provides overarching protection for weather, disease, and insect-related risks, shielding the vineyard from yield reductions and crop losses.
In addition to insurance, our vineyard operation plan strategically mitigates the below risks.
FROST/COLD - The land elevation of every project is strategically mapped to avoid areas that could create pockets of cold air. / We select varieties that have later bud-break and are quick to go into dormancy to prevent damage from late or early frosts. / High-wire trellising systems suffer less damage compared to VSP. / In addition, we implement farming practices such as no fertilizer post-harvest, so vines quickly go dormant.
HAIL - Growing a large umbrella-shaped canopy helps protect growing grapes from pea-sized hail damage.
EXTREME HIGH HEAT - Extreme summer temperatures can accelerate harvest; we mitigate this risk through machine harvesting in the cool early hours of the morning - i.e., @ 4 am.
FIRE - As most vineyard locations are largely or entirely surrounded by tilled row cropland, grassfire risk is very uncommon in the High Plains AVA and can is further mitigated by the natural firebreaks created by vineyard turn rows and county roads.
FUNGAL DISEASES- this is mitigated by the climate (dry, windy, low humidity, little cloud cover), canopy management (maintaining an open/airy canopy), a regular fungicide spraying regime, and consistent scouting for signs of disease
CANE BORERS, CUTWORMS, ETC - regular vineyard scouting for damage/regimes of spraying insecticides / cold winter temperatures keep insect pressure low
PHYLLOXERA - all vines are grafted to phylloxera-resistant rootstocks; there is also little-to-no known phylloxera pressure in the High Plains AVA
What type of wine grape varietals will you be growing?
Tempranillo, Semillon, Marsanne, Primitivo, Mourvèdre, Muscat Blanc, Vermentino, Cabernet Sauvignon, Cabernet Blanc, Merlot, Petit Verdot, Grenache
