Posted by Mark_NY on January 16, 2001 at 16:40:30:
I LOVE THIS SITE. THE PEOPLE ARE SO FRIENDLY (Jim and Nate) and the responses are fast! I to like trees BUT the whole acreage is forest 69 acres. I figure I could make at LEAST $60,000 for 10 loads of logs and STill have some left over.
Land deal - Posted by Mark_NY
Posted by Mark_NY on January 16, 2001 at 15:52:28:
Greetings all!! I have been reading these boards for quite some time. I am trying to get in RE investing. But I do have a unique problem and could not find an answer on the boards. I have found a 69 acre parcel of land that is 100% wooded with Maple, beach, cherry and some birch. My interest in this property is to log it. I believe I could get well over the asking price through the profits from logging. BTW, the owner is asking $60,000 and is open to negotiations as to financing and asking price. My question to you guys is, How can I do a land contract or the like where I can log it and pay the owner quite rapidly? If I told him I want to log it he would probably log it himself to collect the big rewards. Anyone have any suggestions as to make an offer on this, I asked him to l/o or land contract. He responded, what time frame and terms. I said $2k dp 5yr term with a balloon. Havent heard from him in 2 days. I NEED HELP WITH THIS ONE ALL. Thank you.
Mark
Re: Land deal - Posted by Michigan Andy
Posted by Michigan Andy on January 16, 2001 at 20:58:06:
Mark-
I suggest hiring a timber consultant. He/She will get a small portion of the proceeds from the sale of the timber. You can either direct that person to find you enough board feet in this parcel to pay for the parcel (select cut), or simply clear-cutting it.
You can tie up the property by taking the consultant for a walk with you on the property. They will know whether or not there is enough lumber there to fund your deal. You then write a purchase offer with the seller. After he signs, you take the P.O. to the timber consultant, who will “shop” your parcel around with timber buyers, who will then send their own people to cut. Whoever chooses to buy your timber will cover the RE deal you have going, so that you will have to come up with none of your own cash, if the amount/cost of the timber covers it. Although I grew up in Western NY (Go Bills!), I now live in West Michigan, and exactly what you described is done fairly regularly here. You can also get some cash from the treetops.
I used to do firewood as a sideline, and split the wood by hand maul. I am sooooo glad that REI is now my sideline; although I think I’m developing typing callouses (hahaha).
If you need any more info, I would be glad to help.
Andy
Can you legally cut the trees down? NTXT - Posted by Brent_IL
Posted by Brent_IL on January 16, 2001 at 18:34:37:
nt
Re: Land deal - Posted by Jim Locker
Posted by Jim Locker on January 16, 2001 at 16:04:36:
IMO, the seller would be a complete fool to land contract to you and let you log it. If I were in his position, I would flatly refuse to let you log it until you closed.
If you land contract from him without saying you intended to log it, then started logging it, that would most probably violate your land contract (depending on wording). If you did it to me, I would sue you into bankruptcy, and I would stay after you even then.
I would say that if you want to do something like this, you should approach a bank with a business plan and tell them that you want to purchase the land with this specific intent, and show them how you will proceed and how it is a good deal for you and for the bank. Then, you could do a complete purchase.
I would also suggest that you make sure you won’t have a fight with any local organization (audobon society, neighborhood assoc., etc) or national organization (EPA) if you decide to log the property, before you put up any money and get yourself on the hook.
Re: Land deal - Posted by Mark_NY
Posted by Mark_NY on January 16, 2001 at 23:33:20:
Andy,
How do I get the logging company to pay for the logs before closing? Would the company pay me on contract that after I close on land they will come in their to cut? PLease help me out? I am looking to get land paid for and use the rest if any to put into new investments. If this works out I will offer seller cash of $45-$55k. Do you think it will work? If timber supports it? Thank you all.
Re: Land deal - Posted by Mark_NY
Posted by Mark_NY on January 16, 2001 at 16:16:32:
Jim, I am not out looking to screw the owner. I was wondering how I could go about transfering the deed and still make payments to the owner. I have bad credit so conventional financing is out of the question. Thank you
Re: Land deal - Posted by Jason_Ga
Posted by Jason_Ga on January 16, 2001 at 17:23:48:
How are you coming to the conclusion that you will make $60,000.00 for ten loads of logs? I just timbered 40 acres myself and i can assure ten loads of logs will never bring $60,000.00 . what do you consider a load of logs to be?
Re: Land deal - Posted by Jim Locker
Posted by Jim Locker on January 16, 2001 at 16:30:41:
I’m sorry, I didn’t mean to suggest that you did intend to screw the owner. However, I pointed out how I would react, and I think that many owners of that kind of property would have a similar reaction.
When you think about it, it would put an inordinate risk on the owner; if you DID intend to screw him, this would be a good way. Land contract it, log it bare, leave.
Re: Land deal - Posted by Nate
Posted by Nate on January 16, 2001 at 16:27:16:
If logging makes sense as a business deal, you may be able to get an asset-based business loan (hard-money type of loan) from someone regardless of your credit.
I assume you know something about logging and could demonstrate to a lender that logging is, in fact, a feasible and allowable use, and that the income from logging would be enough to service the debt. If not, definitely forget it.
One other question – is the owner all there? If so, I have a hard time believing it didn’t occur to him to sell the trees. My great aunt owns some rural land in Maryland and she is frequently approached by wood companies wanting to buy her timber. If he hasn’t logged it, I might suspect there is a reason why.
Good luck.
Nate
Re: Land deal - Posted by dandrews
Posted by dandrews on January 16, 2001 at 16:26:29:
not the question you asked, but I would be sure to hire a professional forester to tell me if Ihave what I think I have. Logging can be profitable, but tricky. If you do it yourself, you have to know what the market is bringing. If you hire it, you have to understand what the market is bringing plus know how to scale. I would stay close to a forestor.
Re: Land deal - Posted by Mark_NY
Posted by Mark_NY on January 16, 2001 at 18:10:45:
Im not sure, my partner who has 100+acres just timbered logs and sold veneer for that much for a few truckloads. I do not personally have any knowledge of timbering my partner does. Thank you
Re: Land deal - Posted by Mark_NY
Posted by Mark_NY on January 16, 2001 at 18:09:03:
Im not sure, my partner who has 100+acres just timbered logs and sold veneer for that much for a few truckloads. I do not personally have any knowledge of timbering my partner does. Thank you
Re: Land deal - Posted by Jim Locker
Posted by Jim Locker on January 16, 2001 at 16:35:44:
That thought had occured to me also. But it might just be that he likes trees.
I own a large woods. I periodically clear deadfall for use in my fireplace, and I routinely wander the woods with my chainsaw cutting vines that are choking trees. I have some magnificent oak and walnut and maple.
I would not consider logging it (although I could); I like it just the way it is.
I allow people to wander through it, but I forbid hunting - not because I want to protect Bambi, but because this woods abuts my back yard and I don’t want strangers with guns roaming where my kids and dogs play.