Belize 25 acres Teak

[Henry Clark]

Closed on 25 acres in Belize 2 weeks ago.  

Property:

20 acres of 12 year teak.  5 acres of cleared hill.  Water and sewer about 200 yards away.  1 mile to the main highway.  Great 360 degree view.  Great cell reception.  3 miles away from our existing plantation and house.  Main road for mennonites on buggies traveling to town.  Picturesque.  Clear rock stream on the backside.  Road frontage on the front and side road.  

Why?

Although we could continue to add to our Self Storage investments in the US.  This adds to our existing Teak plantations and retired lifestyle.  Our market for the Teak will be China and India.  Belize is a low income market so we only plan to sale low grade lumber there.  The land we are buying also has secondary value to future expats moving there.  Location, view, water, trees, electric, water.

Will clear building spots and plant 100 fruit trees and 800 hardwood seedlings.  This will make the 5 acres value more than the entire 25 acres.  The overall value of the land and potential subdivision and the harvested lumber will be 10 times the original cost.  No capital gains in Belize.  But will have to pay in the US.  Not worth giving up our citizenship to avoid taxes.

Process:      
1.  Tracking the owner down.  There is no Property tax GIS map.  You can’t go to the Lands department and ask.  You have to have the property ID.  You ask the neighbors or the village council.  Then if in the US you have to find a friend of theirs to get their contact info.    

2.  The owner did not want to use an agent.  They wanted to meet in Belize with an attorney and pay cash and transfer title.  I said I could t do that.  I would pay for a buyers agent who did the paperwork.  Used our same agent.  Example.  Found out the land was owned by three people.  If we had just paid her the others could have challenged. Was not their intent, but.  They had two passports.  They used the wrong one for a sale in Belize.  Had to fix.  My signature was not the same as in my passport. With and without middle name.  Belize is super picky on financial transactions due to US drug traffic monetary controls. 
    
3.   Seller wanted cash paid in US dollars in the US.   Not a U.S. citizen.  If paid in Belize in Belize dollars you have to go through an approval process to get your money out.  So if you ever sell down there, make the payments in the US.

4.  Since we and the seller were in the US they had to overnight paperwork for signatures.  

5.  Payments went to Realtors US account. Does not go to a Title trust account.  

6.  Sale is complete but now has to be recorded at the lands department.  Our first property took 1 1/2 years to be recorded.  

Possession:

7.  Surveyor to mark corners.  Costs about $200 US to mark 4 corners.  Costs $100 per corner to replace any missing concrete markers.  Most properties they have to bush hack up and down hills and through jungle.  Snakes, killer bees, getting lost.

8.  The excavator is supposed to come in the next two weeks to clear and widen the existing driveway to the top of the hill and a site in back for a shed.  They will also make a rock bottom swimming hole in the stream.  Cost will be about $800 US.  

9.  Planted 5,000 seedlings at our last property.  Will buy another 800 for this location.  Probably cedar, zericote, granadillo and Cortez for show.  We have to order six months ahead from our Mennonite source and put a deposit down.   $.75 US per seedling.  Plant in a 10x10 grid.  430 per acre.  After thinning over 20 years, 1 out of 7 will be left for harvest.  

Guys out planting trees at the start of rainy season.  During the dry season we cleared land and plowed rows.  

Real estate wise we can subdivide and sell.  Lumber harvest.  More US expats are looking to buy overseas and in Belize.  

Hopefully I remember to do a post in 10 years and see how it goes.  

[Bob Willis]

Henry - I love your posts. They are always so thorough. Best of luck and thanks for sharing.

[Henry Clark]

Quote from @Bob Willis:

Henry - I love your posts. They are always so thorough. Best of luck and thanks for sharing.

My wife is from Cozad and Eustis area.  Hope things are going great in Curtis.   

[Bob Willis]

Quote from @Henry Clark:

Quote from @Bob Willis:

Henry - I love your posts. They are always so thorough. Best of luck and thanks for sharing.

My wife is from Cozad and Eustis area.  Hope things are going great in Curtis.   

We probably know some of the same people. I may know her family if any are still back there. My wife and I owned the county newspaper (for Eustis). It is now known as the Frontier County Enterprise, but previous iterations included the Hi-Line Enterprise, and before that the Eustis News. Keep up the good work.

[Chris Mignone]

@Henry Clark Amazing stuff my man! I’d love to do something like this. A buddy of mine just built a duplex on the water in Placencia

[Ronald Rohde]

Looks like fun!

[Henry Clark]

Already has a road but a little narrow.  Making it 14 foot wide.   So people fill comfortable.  Will rock the road. Put drain tiles along the hillside so water doesn’t erode all the way down. Smaller dozer which is good for this purpose.  $80 per hour which is great.  

Teak trees are on the right side.  

[Henry Clark]

At top of hill.  First pass.  As an investment this is a great hit.  Clearing the road to the top of the hill.  Clearing potential building sites.  Will finish both tomorrow then work a shed site down below and a road around the property.  Then clear a pool below a spring and rock formation. 

From an investment standpoint this reminds me I believe of a Bill Cosby story line I believe.  Had someone dating his daughter and they did something bad.   He told them imagine the best steak ever in front of you.  Smells great, looks great, everything.  You could have it served up on a silver plate or the lid from a trash can.  Yours is on a trash can lid.

Clearing the road to the top and the building site, set the location on a silver plate.  Just $800 today for the dozer totally stepped up the view of this property.  Can’t wait to see more of this project completed.  

[Jay Hinrichs]

Quote from @Henry Clark:

At top of hill.  First pass.  As an investment this is a great hit.  Clearing the road to the top of the hill.  Clearing potential building sites.  Will finish both tomorrow then work a shed site down below and a road around the property.  Then clear a pool below a spring and rock formation. 

From an investment standpoint this reminds me I believe of a Bill Cosby story line I believe.  Had someone dating his daughter and they did something bad.   He told them imagine the best steak ever in front of you.  Smells great, looks great, everything.  You could have it served up on a silver plate or the lid from a trash can.  Yours is on a trash can lid.

Clearing the road to the top and the building site, set the location on a silver plate.  Just $800 today for the dozer totally stepped up the view of this property.  Can’t wait to see more of this project completed.  

Henry on the Teak wood and lumber aspect.. what is the growing cycle for the hardwoods to become merch ?  And what kind of MBF do you get out of a typical stem. Do you export the raw logs or do you do some manufacturing of them before you sell them. Who logs them? Any special process or just fell them and skid them to a landing deck them then haul them off ?  Here in the North west to go from Seedlings to Merch is a 50 year process. Thats doug fir  and hemlock,  on the coast of OR and WA can be somewhat quicker.. And Vancouver Island BC is super fast almost as fast as the Riata pine in New zeeland.   Congrats looks like a great thing to do .  I have a client that is looking to buy an island in Belize for a resort going to check that out myself.  We did quite well in the Timber game in the 90s Owned many thousands of acres of Timberland during that time its a great industry one of the favorite things I ever did beat the heck out of rental houses LOL

[Henry Clark]

Email your friend the picture of the grilled lobster and tell him you want that memory and snorkeling.

I have a whole post on teak.  
I grew up in the Kisatchie national forest in Louisiana.  Surrounded by the timber industry.   Have an unusual background.  

Your questions. 
21 years

150 BF per stem or tree.  Shooting for three 8 foot logs of high quality.  

An acre you plant 435 seedlings on 10x10 grid.

You both thin and trim down to around 60 trees per acre.

Or 9,000 board feet per acre.

Standing board foot is $.65.

“A” quality runs $25 to $32 per board foot retail.  

We plan $8 to $12 per board foot.  That’s for “A” quality which will not happen.  Central America is known for poor quality teak.  They plant the teak but don’t trim and thin.  
We like buying immature trees to cut off the maturity timeframe.  I can make them grow faster by thinning even though they have lost some of their growth.  The quality I can improve but once the limbs have hit 1 inch the value is impaired moving from A to B or lower quality.

I’ll process logs, rough sawn, kiln dry, planed.  
Market is India or China.

Versus 1,2,3  Asia uses A/B/C/Rough.  

We own or manage 230 acres plus trying to accumulate more.  

The hard and the fun part is training my team there in the proper processes from planting all the way through selling.  Although the official language is English, it is comical sometimes let’s call it my failure to communicate.  They actually laugh also when I walk them through it.

[Henry Clark]

What is great about teak is wild teak is drastically diminishing while the demand is increasing. Plus the main economies for teak India and China  are increasing in per capita gdp.  All the cultivated harvest is only 1% of the demand.  No need for a crystal ball.   

[Henry Clark]

Yesterday was a Belize kind of day.  

The Surveyor finally showed up, two months after we started.  Go with the flow.  My foreman is staying with him and making sure he knows where the concrete pillars are.  About the size of a package of crackers, in rectangle form.  

He calls and says I got good and bad news.  Bad news we have been working on the wrong property.  Good news is our land is where all of the next-door houses are (free houses, I think legal issues).  Next bad news is there is only 12 1/2 acres there, versus the 25 we bought.

The surveyor the day before had gone to the land registry to get a map.

Contacted the Buyer agent we use, and asked to make sure his group did the title search as noted before.  He said yes.  Sends over plat maps and land registry notes.  I forward to our manager who today walks through them with the Surveyor.

Yes, we are on the right property.  There is 25 acres.  The Surveyor was surveying the wrong piece of ground.

***********

Our land is from the bottom of the second White dead-end road.  The full length of the road plus some to the left.  To the open area which is a cleared hill.  The bare ground below is the neighbors whose pasture is mowed.

The green trees on our property are 14-year-old teak trees.  Then about 5 acres is the bare hill.  We are trimming and thinning the teak trees.  We bulldozed roads to the top of the hill and to the back section and all around the hill.  Planted about 500 timber trees.  Plus 50 coconuts. Mango, banana, breadnut, bread fruit, jack fruit.  Around the top of the hill, we planted 60 bougainvillea plants.   In two years, the hilltop will be ringed in flowers from the bougainvillea.  Will get more Bougainvillea when I'm down there and plant along the roads going up.  

Had a neighbor (retired from Minnesota) who does home construction and real estate stop by to check out the bulldozing to see if he had any recommendations.  Said it looks wonderful.  View, breeze, close to highway, electricity and water.  He could sell it in two weeks.  If we split the hill with 5 acres off, it will sell for the amount we paid for the full 25 acres.  Which we are keeping it. 

[Henry Clark]

Down now for 9 days. Working with the team to finish planting trees and landscaping.

Drive south 2 hours to get a load of peanut grass.  The guy rolls back the grass or vines and slices with a machete.  You take about three slips dig a sideways hole about 6 inches and plant.  Within a month will start to spread.  Plant in 2 x 2 foot sections   In a month they will start to spread.  In 4 months they will cover the ground.   Stays about 8 inches tall.  We planted where our landscaping is.  This greatly reduces weeding.   Plus a nice green carpet with little yellow flowers.  Does not hurt our landscape plantings since they are taller.  Where he is slicing grows right back the next week.

[Henry Clark]

Enjoying the learning process.  Have been planting tons of fruits and landscaping since down here.  Not everything works. These bananas we planted to far into the shade.  They need full Sun.  Monday we will dig them up and plant elsewhere. Will cut about 4 inches above ground and plant the stump.  If we tried to plant the whole tree there would not be enough roots to support the leaves.  Wind would blow over. We would have to water.  

Why am I talking landscaping and fruit trees on a Real Estate forum? This hill isn’t the best for forest land.  So in 4 to 5 years we may cut this 5 acres off and sale.  This is like doing a fix and flip.  By planting fruit, flower trees and building roads and pond.   Putting little money into it.  But will make the property more valuable.  We live in McD world.   I want it now.  They will have producing fruit trees.  Shade trees.  And Groundwork done.  Luckily the bird life comes free.

[Ronald Rohde]

nice update, pretty bird

[Henry Clark]

Quote from @Ronald Rohde:

nice update, pretty bird

 It’s hot down here around 90.  Wish I was in Houston with the cool sea breeze.  Even the frog is headed to the creek to swim. 

[Henry Clark]

Lunch time. Official meal of Belize.  Rice and beans.  With stewed chicken.  $10 bzd or $5 USD.   They dont do sales tax   

[Henry Clark]

Made it back from our recent trip to Belize.  Main project was building a small pond for Tilapia.  Spillway to the far left, outlet in the middle, small pier to the right.  Left the Cohune palm tree in place.  It will die.  Didn't want to waste time digging it out.  What has this got to do with Real Estate?  Cheap easy Value Add.  Both a pond for fish, but also you can see it from the hilltop or potential house site.  People like water, trees, boulders, views, walkout basements and location location.  Invited one of the neighbors over, with his visiting father in law.  The Belize neighbor is both a GC and a realtor, dealing with Expat investors.  He knows we don't plan to build there for ourselves.  He kept mentioning he can sell this today about 5 times during the visit.  Really special layout.

The pond luckily was in a heavy clay site.  So, the pond sealed well.  Used our skidsteer to build.  Planted coconut trees and Plaintains on the far side.  Will also plant peanut grass, cassava and Moringa trees around.  These are natural food for Tilapia.  Just have to wait on a few heavy rains to fill up the pond.  Placed an order for 1,000 Grey Nile Tilapia in the next month or two.  The way they raise, they are all Male.  Tilapia start reproducing even at 3 months old, so if you have females, you end up with a lot of little fish, if you let them breed.  Guys can't wait to have free fish down there.

[Henry Clark]

Well Belize had some great rains.  The Clay Pond filled up over the week.  Everything worked great.  Overflow went thru the spillway.  Normal flow went through the pipe.  Just need to finish planting peanut grass around the bare areas.  We will let this work for a year or two.  If it does fine, we will add a second pond below it.

Have 1,000 all male tilapias on order for delivery in a month.  Will put fertilizer and Rice Hulls in the pond to start the Algae to growing.  Tilapia almost entirely eat vegetation.  Should be ready to start eating in 8 months.  My guys will love setting the trap out on Friday and taking home fish on Saturday after work.  Our papayas, bananas and Plantain's are already starting to overproduce, and they get to take home.

Pond looks great from the potential homesite on the hill above.

The bare ground to the far right across the pond we planted Coconuts and bananas. In a year they will be 6 to 8 foot tall.  Then in 3 years they will be producing coconuts.

Pond is only about 1/3 of an acre but will produce several 100 pounds each year.  

This was a fun Added Value project, which we will be able to use.  Would like to do more ponds on our Country Subdivision projects here in Iowa, but the Corp of Engineers governs these, and this same pond would have cost $80,000 to $120,000 for the "Right to build"; not to actually build here.  You have to buy Stream Mitigation credits if you build a pond in a stream way.  This pond cost about $1,000 including time and equipment cost.  Really adds value to the property.

[Scott Mac]

Your post made me think of this.

[Henry Clark]

 Pretty well set up for that.  Just $24,000 per year and could be drinking Rum and fruit juice for the rest of my life.  Paying $100 in property taxes and maybe $100 in income taxes, no Capital Gains.  Still have to pay US taxes though.  Doing properties in Belize is a nice change of pace from Self Storage, Country Subdivisions and Flex buildings.  Especially in Iowa when it is 0 degrees and 30 mile per hour winds.

These properties we are doing have the Teak component, but they all have secondary values with locations, building sites, phone/internet reception, water, palm trees, fruit trees etc.  A lot of fun learning stuff I don't know.

My family is from Texas/Louisiana, looks like you're in Austin.  I'm glad we are in Iowa, otherwise I would be going nuts doing deals left and right.  No county zoning and off list Property Tax properties.

[Matt McCurdy]

Great stuff Henry! Fellow Iowan as well. I invested passively in a farm in Belize who has teak, mahogany, Spanish Cedar hardwoods, and graviola trees. It’s a beautiful farm as well. I wish you great luck on continuing to build up your farm.

[Henry Clark]

@Matt McCurdy. Yep both enjoying the investment both short term and as a Longterm investment.  Have fun in your investment.  If you ever go down let me know and I can have our plantation foreman walk you thru the business end. 

[Matt McCurdy]

Quote from @Henry Clark:

@Matt McCurdy. Yep both enjoying the investment both short term and as a Longterm investment.  Have fun in your investment.  If you ever go down let me know and I can have our plantation foreman walk you thru the business end. 

 That would be great!  I'm hopeful to start going down there more in the Winter months to dodge the Iowa cold in the coming years.

[Henry Clark]

Continuing to plant fruit trees, flowers, agave cactus, etc.  Not planning to sell anytime soon.  But want to get all of the plants going.   We are in a need it now society.  Thus the more plants producing the more value.  Some of the plants really producing.  Bananas, soursop, papaya and soursop are some of the first really producing. 

[Henry Clark]

Realize most investors are looking for returns now.  But if you can find an investment that pushes out beyond the next 2 or 3 years into a  “different” financial environment you might have a better risk reward return.