Advice for starting out in land

[Brian Ingram]

Hello everyone. I wanted to know if anyone here was especially interested in the investment of land and some advice for how to get started in that market? Especially out of state investing. Thanks!

[Jay Hinrichs]

Quote from @Sarah McLaulin:

Hi Randy - I am also interested in land/timber investing. I am in SC and have some property in GA too. I'm curious about you take on timber land sales in SC and GA? Any tips on where you recommend learning more about this investment option. Thanks!

@Randy Rodenhouseundefined @Randy Rodenhouse   Sarah you need to Tag Randy if you want him to see your question.

As for Timber Myself I have spent many years buying and selling timber land. its generally a cash and carry play.. Although can be quite lucrative if you find something off market and the current owner puts no  value in the standing timber or very little value.  I am not much of an expert in the South East timber ground  . I did all my work in the Northwest in the Douglas Fir Cedar markets.. there is for sure some major long term wealth building in Timber.. As it just gets more valuable the longer you hold it.. risk of course is fire and bugs.  In the Northwest in decent West slope ( west side of the Cascade range) Timber will grow at a rate that will equal a 12 to 15% annual return.. Its why the major funders of Timber ground in these areas are John Hancock and the Harvard endowment. Among other insurance companies.  And there are a whole heck of a lot of multi generation Timber land owners that live off their Timber by harvesting select amounts annually or every 3 to 5 years  replanting and just managing the Timber.  In the west there can be some pretty awesome value in the Timber..  Redwoods can be off the charts.. But for Fir I logged an 11 acre tract back in the late 90s and got over 450k NET to me off of that one harvest.. Now granted it was basically a clear cut and replant.. But if you guy right you can turn the Timber into cash in as little as 90 days. 

Our major target though was parcels that could be split say a 40 acre tract that we could do a short plat on ( less than 5 lots) might be 200k worth of timber we might pay 300k for it. And sell lots for 75 to 100k each.. Also the other property that the Mills would not touch was nicer homes. So say a very nice 2500 sq ft house on a 40 t 80 acre tract that was worth 300 to 400k alone on one acre.. banks will only loan on house and 1 acre they would put no value in the remaining land and Timber.. so very tough to sell those.. And maybe there would be 150 to 300k net of timber value.. Kind of like BRRRR and sell. We would buy the entire parcel log it spruce it up around the house and replant were we clear cut.. then sell the home to a home owner for the value the bank would loan on.. There by netting maybe 100 to 200k per deal.. You need money to do this though.. WE had commerical lines of credit and cash to pull this off.. We could just buy Timber deeds and my bank would advance on a timber deed without the real estate that was a huge advantage.. also in day the Export companies ( Menasha ) would loan us money on the timber deed and we repaid by the delivered log.. this was 100% financing at Zero interest .. It was so COOOL we made millions doing this.. But that financing went about in the early 2000s.. But out east maybe you talk to mills and see what they have going on it its not a new concept or something I created.