All Forum Posts by: Mason Moreland

There is a neighbor near us (not in the mapped floodzone) who also flooded frequently. They built a berm 3-4' high around the outer edge of their property and got it stabilized with good grass. Looks weird, but no more flash floods from stormwater draining to the low park behind them.

Morning, @Trey Bonner! This is actually what I do in my "day job," environmental consulting and development consulting for solar, oil & gas, real estate, etc.

100 acs is a good size for utility scale solar. I'll shoot you a DM and see if I can find any developers looking for leases near you!

So for those of you (most of you) that don't follow West Texas weather, we had a brief frost come through last week (temp ranges dipped to 28*-31*F depending on location). There was a slight inversion layer (hot air a bit higher with cold air settling) and the freezing temps only last for between 1.5-2 hours. Some growers had significant damage to this year's crop and others had minimal effects. We have a pretty large area under vine with numerous varieties and ages, so we saw a smattering of different effects. Some varieties/ages/trellising are looking almost untouched and others are looking like they will only have vegetative growth this year (mostly young vines we would have knocked fruit off of anyways, thankfully).

We were also in varying stages of budbreak ("green-up"), which means we will have different variations in damage. Here are a couple pre-freeze photos below.

I'll come back and update in a week or so once we have better knowledge of what the effects are and with and some photos! Part of the game, dealing with the weather, but glad we set ourselves up to bounce back from these events.

@Jeremy Narvaiz nice! Congrats on finishing it out.

As far as crop insurance claims, we will have to wait and see. We won't likely be making any unless something we haven't found yet shows up. 

I think a lot of the winter kill damage in other areas that would require vine replacement may show up as wood damage. In that case, vines may push a few tertiary or blind buds and look OK for a while, then collapse later in the season. We will have to look to see what happens in the other AVAs later in the season particularly around mid-season collapse.

Morning @Andy Hains! Excellent question. Texas is a big place, so the answer varies based on location and cultural practices. 

Here at our base of ops at Canted County Vineyards (far southern end of the TX High Plains AVA), we are seeing minimal damage in just two varieties (merlot in VSP and chardonnay in our experimental high wire). Both had some primary bud damage, but not too much. That's comes out to a small % of damage to only about 2.4% of our acreage. Bud break overall has been uneven in timing, but that is typical for Texas and everything tends to even out after a couple months growing. Expecting pretty typical yields this year (4-6 tons/acre in VSP/premium acreage; 6-10+ tons/acre in 4th leaf high wire before thinning that down to 5-6 tons so they can focus on vegetative growth for one more year). I think we could hang 8-10 tons pretty easily on our high wire tempranillo, for example, and still put out really quality fruit. We still want to knock production back for one more year to have them focus on vegetative growth though. I'd like them to be very resilient to future damage and don't want to trade longevity tomorrow for production today.

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As far as cultural practices to prevent damage, this event fell more into the "winter kill" class of cold damage rather than frost in my area (Texas High Plains AVA) as most vines were still dormant. We typically will prune (especially early budding varieties) just as buds start to swell. This will "reset the clock" on the vines and delay bud break for some time and put us even further into the safety of early-to-mid-April. Other than that we did not do much. Some folks up here in the High Plains AVA also saw more damage than we did, but it greatly depended on variety, topography, and when they pruned.

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In almost every other AVA in the state, vines were either on the verge of bud break or had already, and damage ranged from minimal to catastrophic based on variety and topography. Some vineyards got nearly wiped out and have vine death, others are pushing secondary or tertiary buds or at least some trunk suckers (chance to re-train at least). The other AVAs do not typically get low temps like we do and many vines had never experienced anything nearly like this and weren't acclimated or hardened to it. I think many of the vineyards in the hill country will live but have a rough year in 2021. They had a fairly gradual decline (several days) to their low temps. 

Sounds like the appraiser is effectively telling you the acceptable cap rate in the area is about 4%.

It depends on the location. The cap rate that buyers are willing to accept depends on your geography. It's not exactly like say multifamily properties where the cap rates will be similar across a state or the country. Farmland is usually valued more locally so that's hard.

Around here, you usually see a cap rate of about 5%-ish on irrigated farmland. So you'd be looking at about $215k-ish if your property was in the TX south plains. A lot has to do with alternative uses/demands though. For example, here in TX, that same amount of productivity but in Central TX or in oil and gas country (even without minerals) would probably be worth more like $1MM+. Alternative uses would be residential property or commercial (hotel/Air BNB, tourist destination, vineyard, etc) in central TX but the increased price in O&G country would come from the potential for surface damages income from O&G producers. Very situational like all RE, and not just based on income of the property: location, location, location.

Great, for sure. Making money is all about doing the most good for the most people as often as possible, no different in negotiations. 

I'd say you already brought significant value by finding (maybe!) the deal, knowing the area, and being local. Partnering up only makes sense when both sides need what the other has. In your case you have a deal, proximity, and local knowledge. You'd want to look for a partner that has what you need whether it's capital, experience, etc and structure a partnership so that you play to your strengths and they play to theirs. Maybe you negotiate the deal and manage the property (at least initially) and they help with systems and financing. Depends on the partner and what they are bringing to the table.

So I have a few minutes to touch on a few thoughts I had.

1) Buy it yourself and live there. If you have the money, combine this strategy with your parents by having them co-sign (no cash) on the loan so you can qualify (this assumes you have the cash). Plan a timeline/target price to either convert it into an AirBnB and move or sell it at a target price and move. Pay your parents a return on their risk.

2) If current owner has a mortgage balance on it - Try a "subject-to" purchase. Lots of info out there on it. Don't be afraid of it. Use a good service/attorney to help you set it up. Set up an LLC like "Tuuk Property Management LLC" and make payments from there to their bank.

3) If current owner owns it free-and-clear - try owner-financing as an option. Tweak the term, interest rate, and amount down to fit your investment goals and the current owner's needs. This and option #2 give you great chances to make AirBnB crush it.

4) Partner up with someone. Self explanatory. Lots of people (me included) would love to do more investing in the Hill Country, just have to ask around and offer value!

5) Get in front of the owner before anything else. Above all else, focus on WHY they may be selling and what their pain point(s) are and how you can HELP them! Let them know you would LOVE to buy their home. If you hit a point where you don't have an idea of how to fix their "pain point" or solve a problem, be transparent and say you want to do a little research and think about what the best way to move forward may be. Come back on here and look for answers!

I hear you on risk. Not sure how old you are, but based on having a 1y/o, probably fairly spry! You've got a lot of time to bounce back from failures, and if you worked that long abroad, you probably have some pretty significant life skills you don't even recognize that you can monetize for years to come if need-be. Can't learn without failures (read as "at bats" or opportunities taken). Fail fast, small, and often to begin with to get big success real fast!

Just my initial thoughts :)