Polk County entrepreneurs Brian Philpot and Rob Harper first found success in buying and selling farmland. Then came the challenges of owning, then selling, a landmark amusement park.
Now the duo is back with Act Three: land lending.
Their ambitious plans are through AgAmerica Lending, a unit of the firm they run, Lakeland-based Land South Group. Founded in 2010, AgAmerica now accounts for 80% of the personnel and 50% of the holdings of the duo’s group of companies. In four years, AgAmerica — previously called Bankers South — has grown from four employees to 36. The firm declined to share revenue figures.
Philpot acknowledges the firm faces substantial competition, mostly from entities such as Farm Credit and other agriculture lenders. Their goal is for AgAmerica to become “the premier land lender.”
AgAmerica underwrites and services loans from $100,000 to $100 million. Clients range “from smaller blueberry farms to vast cattle ranches,” according to its website. The average loan is $2 million and most fall in the $1 million to $25 million range, Land South Group Marketing Director Phoebe Moll says.
At first, lending seemed like a temporary venture, but by the end of 2010, “It was obvious that it was a strong business model,” Philpot says.
Adds Philpot: “If someone has a piece of vacant land and they need capital, we’re a one-stop shop, and that’s anything from really low conventional rates all the way up. It doesn’t really matter what their credit is; we can make a product for them, as long as it’s within reason.”
Moll says AgAmerica has two key competitive advantages. One is different regulations. For instance, as a nationally licensed lending company, AgAmerica Lending isn’t subject to the increased scrutiny FDIC-regulated banks have faced since the financial meltdown. “Because we’re not a bank,” Moll says, “we don’t have to play by banker’s rules.”
Another advantage is the duration of the AgAmerica loans. “We offer a 10-year line of credit, which means that once you’re approved, you are set for the long term — no annual paperwork renewals and no credit ‘resting periods,’” says Moll.
AgAmerica has so far concentrated its marketing on the Southeast, but has also started to make loans elsewhere. “We’re focused on growth, and we want to be the best and the fastest-growing land lender in the U.S,” Philpot says.
AgAmerica grew out of the relationships Philpot and Harper built through their successful agricultural real estate partnership. Philpot, 43, and Harper, 48, started Land South Group in 2003 and at one time held nearly 350,000 acres across the Southeast.
Four years later they made a wise move: Sensing a shift in the market, they sold nearly all their holdings prior to the 2007 crash. That generated returns of more than 200%. It also provided cash to invest in things like agricultural loans and theme parks, specifically the iconic Cypress Gardens Winter Haven.
The duo bought Cypress Gardens out of bankruptcy for $16.8 million in 2007 and owned it for a little more than two years. After discovering the complexities of running a 550-employee entertainment destination, in 2010 they sold it to Merlin Entertainments Group, which created Legoland Florida on the property. Philpot declined to disclose the sale price or how much he and Harper made in the Cypress Gardens sale. The property itself sold for $22.3 million, according to Polk County property records.
Still not ready to jump back into land deals, Philpot and Harper continued investing in distressed real estate debt after Cypress Gardens. Then they noticed changes in banking made it
harder for farmers to get loans, and that was the next opportunity. They expect to keep it going.
“Right now,” says Philpot, “it’s a growing company, we’re having fun, we’re making money, and that’s all we can ask.”