Blog - Southeastern Land Group

Sep

How Big of a Tract of Land Do I Need to Invest in, to Harvest Timber?

“How big of a tract of land do I need to invest in, to harvest timber?”

This is a question I have received by many landowners looking to cut timber they have on their own property or perspective buyers looking to purchase land with a timber investment component. I tell people who are looking to purchase property with an intent on cutting later in the future, to buy at least 40 TIMBERED acres. The reason why I emphasize “TIMBERED” acres, is that some properties may be 40 acres, but they have a pond, a large SMZ (streamside management zone), a house, a pasture, etc. Therefore, it is not 40 “TIMBERED” acres. The rationale behind this, is because logging is trending to the higher production type of tracts. In other words, a tract of timber needs to have enough volume on it to justify the logging company to be able to cut it.

For example, I, as well as every other forester in the procurement or consulting business have gotten that phone call from a landowner that wants 5-20 acres cut. While this is not to say that it couldn’t be cut, it is harder to move a logger to cut such a small tract by itself. In a situation like this, the best option to get it cut is when there is a logging operation being done very close to your property. Sometimes they can be so close they can drive the equipment to your job without having to load it on a low-boy trailer. Every time a logging crew moves, it is costing them money. Not only in the overhead, salaries, and fuel, but also that means that its time they are not in the working in the woods, cutting, skidding and hauling wood.

Gone are the days of logging with mules and horses. My great grandfather was one of these loggers. He logged for nearly all his adult life in east central Alabama. Depending on the type of wood, 5-20 acres would take several weeks to months to harvest. Today, with logging equipment being highly mechanized with the latest in technology, on newer machines, it could only take a crew just 2-3 days to cut 20 acres. Along with this high mechanization and technology comes cost. With a good portion of crews having to finance their equipment, they must maintain a certain amount of production each week to cover their costs.

As with any “Rules of Thumb”, there are always exceptions, of course. Is there a good chance if you had 20 good acres to cut, that someone would come cut it that wasn’t cutting close by? Sure. I’ve seen 20 acre tracts that have more volume on them than a 50 acre parcel. However, to ensure that when you do decide to harvest some timber on your property, you want to make it as attractive as possible when marketing it, to get the best possible price. Having a tract close to 40 timbered acres or larger would be a big step toward doing that. If you are looking to purchase a tract of land with a timberland component, that you would like to manage for a future harvest, talk to an experienced and knowledgeable Land Professional and a Registered Forester that can help you find that type of property you are looking for.

Written by: Brian Watts is a Registered Forester and a Licensed Land Agent/Realtor with Southeastern Land Group, in Alabama. Brian assists his clients in the selling and acquisition of rural land, as well as timberland management. He is also a contributor to our weekly radio program, “The Land Show”.

Aug

“Good Timberland Investment”

What does the phrase, “Good timberland investment”, actually mean? It is a common descriptive phrase that helps illustrate a feature of a property that is for sale. All of us in the land brokerage business use this phrase (or many similar ones) regularly, because more times than not, there will be a timberland component on most rural land properties. However, just because a property has trees on it doesn’t always mean that it is a “Good Timberland Investment”.

The purpose of this article is to expand on that phrase, “Good timberland investment”, to show that there are various levels of this feature on most rural land properties. It will help you as the buyer, to have a better understanding of this concept when deciding on the right property to purchase for you and your family. Some properties have BETTER “Good Investment Timberland” features than others. It all depends on what you want to do with the property. As many of my great former forestry professors at Auburn University would always say, “it all depends on the landowner’s objectives.”

Example Tracts:

Example 1: You have a 100 acre tract that was clear cut 20 years ago and was not replanted, was left to grow back naturally. It probably has some good pine products such as pulpwood, chip and saw, and maybe a scarce sawtimber size tree perhaps close to a drain or bottom land area. Unless there was a tremendous pine seed bed leftover from the previous timber stand, the pines that were left to grow naturally are probably scattered in pockets throughout the 100 acres. In the remaining areas of the growing space, there is young (probably pre-merchantable to pulpwood size) hardwoods such as sweetgum, various oak species, beech, hickory, and various other type species, depending on where the property is located.

Example 2: Compare this stand to a 100 acre tract across the street, that was clear cut, sprayed, burned, and replanted. It was thinned at age 15 and is ready to be thinned again. After a few more years, the tract will be ready to clear cut and the entire process will start again. On this management plan, it will have produced revenue at 3 different intervals.

These two examples are extremes of each other, but illustrates the point of one property that has underutilized its growing space, in the natural stand, versus the other property that has fully utilized its growing space, with the planted pines. I have seen both of these type properties described as a “Good Timberland Investment”. There can also be “Good Investment Timberland “properties that have nice mixed and mature pines and hardwoods, which are very valuable. If your number one objective is to have the BEST “Good Timberland Investment,” then in this scenario, you would want to purchase the stand of planted pines or the mixed and mature hardwood and pine stand, that gives you the chance to have a “GREAT Timberland Investment”.

Example 3: I have also seen this phrase used in describing a clear-cut property that is being sold. A clear-cut property that is for sale, is seen by some, as a blank canvas and is very attractive to a certain buying pool, particularly, if a buyer wants to plant pines and establish a plantation.

Depending on the buyer, any one of these 3 type of tracts can be very appealing. Of course, these are 3 very separate and distinct type properties. I used three such extreme examples to help illustrate this point. Of course, most properties are not so extreme in nature and if the property is large enough, could very well have all three examples on one property.

If you are looking for an immediate return on your investment, I would say to buy a tract with an established stand of timber that has enough timber volume on it that it could be immediately thinned or clear cut. However, if your main objective is for hunting, recreational purposes, etc. and timber is not that much of a priority, then perhaps you may be more interested in the tract like the first example. These type of properties, in general, depending on where they are, are somewhat less per acre. If you are not concerned with an immediate return, but perhaps looking more long term with your investment and may not want to spend as much as the other two example properties, a tract that has been clear cut could be a very good option for you. Whether you are looking to purchase a property for the very first time or if you have owned property for many years, a purchase of a clear cut would be something to strongly consider if your objectives are more long term. Generally speaking, their prices are less per acre and the buying pool is considerably less, which means the opportunity for getting a better value in the dirt, maybe a better possibility.

There are many decisions to be made when purchasing the right property for you. Cost, size, location, utilization, special features such as creeks, pasture, etc., are just a few of the many factors that go into such a big decision. In terms of maximizing the likelihood of buying the BEST “Good Timberland Investment” tract of land, one of the biggest factors a buyer would need to keep in mind is, TIME. How soon would you want to harvest? How often are you looking to generate revenue from your timber? How long do you think you may want to keep your property? Other factors to consider when trying to maximize the BEST Timberland Investment are; soil type, site index, and proximity to as many mill locations as possible! You may see some of the highest quality trees of various species on a tract of land, but if a market for that particular product is too far away to haul to, then it doesn’t matter how nice of a tract it is.

These are just some things to think about when determining which timberland investment is right for you. An experienced and licensed land agent, as well as a Registered Forester, can help you navigate to find which property is the BEST, “Good Timberland Investment” for you.

Written by: Brian Watts is a Registered Forester and a Licensed Land Agent/Realtor in Alabama. Brian assists his clients in the selling and acquisition of rural land, as well as timberland management. He is also a contributor to the weekly radio program, “The Land Show”.

Aug

You Should Reforest, Even If You Might Not Live To See The Harvest

Both in my job as a land agent and land manager, I often hear the excuse from older landowners that they don’t plan to reforest (that is, plant trees) on land they just harvested because “Why would I? I won’t live to see those trees mature.” After wishing them a long and healthy life, I like to give the following three reasons for why they should consider planting, even in the off-chance that they head for greener pastures before the trees can be harvested. [Disclaimer: I am neither a graduate nor registered forester. The below advice is my opinion based upon experience working in both the land management and land sales fields. Please consult a registered forester for reforestation assistance.]

It’s Good for Your Investment Portfolio: The money that you spend on reforestation isn’t money that you’re throwing away. It’s a direct investment back into the overall land value. If it costs you $10,000 to plant trees today, you could turn around and sell your land for $10,000 more tomorrow than you could yesterday. And that investment will increase in value every day as those trees mature. Pre-merchantable tree value is a calculation I regularly make on land listings to make sure the Seller is getting paid the full value for his or her timber asset at closing time. Also, productive property is much easier to sell than unproductive property. If you don’t intend to sell your property, then by planting now you will be handing down a growing investment to your heirs rather than an unproductive piece of property that will, by that time, be much more costly to put back into production. It’s good financial practice.
It’s Good for the Land: If your land isn’t growing pine trees, it will still grow something. That something is usually briars, weeds and lower genetic hardwoods and pine that will take many more years to mature than a pine plantation. As these less productive species grow, the cost to put the property back into planted pine production increases exponentially as the regrowth becomes larger and harder to control by conventional forestry means. The growth of the natural stand will also stagnate very quickly. Unless your goal is to have a natural forest in 75 years (which I’m less optimistic that you’ll live to see), keeping the land productive and actively managed will preserve aesthetics, reduce costs, promote wildlife habitat and protect against wildfire threats and disease, among other reasons. It’s good land management.
It’s Good for Everyone Else: The Florida Forestry Association (floridaforest.org) has a slogan that I think captures this point nicely – “Working Forests Work[1].” Keeping land in timber production that would otherwise be left to become an overgrown mess has many societal benefits. Forest products help produce over 5,000 items that we use in our day-to-day lives. Just in Florida, the forest industry has a $14.6B impact on the state economy and provides over 76,000 jobs.[2] Productive forests also clean the air and water better than a stagnated natural forest resulting from a clearcut. A 2012 study by the University of Florida calculated the estimated value of managed forestland to be over $5,000 per acre when including water purification, carbon stocks, timber and wildlife.[3] It’s good land stewardship.

It’s tough to spend the money on reforestation knowing that you might not be around to see the trees mature. But I think the reasons above make a compelling case for why it’s a good idea for your pocket, your land, and your community. I welcome more good reasons, or thoughts to the contrary. Feel free to comment.

Daniel Hautamaki, Land Agent, Southeastern Land Group

[1] “Working Forests Work” brochure: http://floridaforest.org/wp-content/uploads/WFW-ad-for-Fresh-From-FL.pdf

[2] Ibid.

[3] University of Florida, IFAS: Stewardship Ecosystem Services Survey Project: http://www.sfrc.ufl.edu/CFEOR/docs/EcosystemServices.FloridaStewardshipReport.Jul2012.pdf

Aug

Money is Not the Only Motivation

“I want to sell, but I don’t need the money.” This is a common refrain uttered by people who are contemplating the sale of a piece of real estate. If they do not need the money, then why are they selling? Finding the “Why”, the “What”, the “When”, the “Who” is an essential part of making a real estate deal come together.

Several years ago I helped some seller clients sell about 800 acres of beautiful hardwood and pine timberland that had been in the same family for over 70 years. There were simultaneous offers to purchase the land, one came from a hardwood timber company and the other from a small group of land investors. My clients looked at both offers, and immediately rejected the one that had “timber” in the name of their organization. One of the family members told me, “These other people may cut the timber also, but at least it isn’t in my face.” I believe the timber company would have ultimately paid a higher price than the investors did, but the sellers preferred to deal with individuals instead of the timber company. Their motivation was not only money, but also seeing that the land ended up in good hands.

Here are a few considerations regarding motivation that I have seen influence the decision of buyers and sellers.

Past Experiences- Past experiences, positive or negative, can play a significant role in the outcome of a real estate deal. I have seen sellers refuse to sell to an adjoining land owner because of some long-running family feud. I have seen buyers refuse to make an offer on a listed property because they had a bad experience with the listing agent in the past. Those little details can mean all the difference between getting your deal done or not.

Time is of the Essence- Timing can be the most crucial part of a real estate transaction. A buyer may need to identify and make an offer on a replacement property because they are doing a 1031 exchange. On day 45 of their identification period, a 1031 buyer may be extremely motivated to try to work something out to avoid paying 15% to 20% in capital gains tax. Sellers may be faced with an immediate expense for a home repair or the loss of a job. If you wait a month to make a decision, they may find alternate sources of funding, and no longer be highly motivated to sale. I learned a long time ago, “The time to do business is when someone is ready to do business.” The whole world can change for someone in a day, so don’t miss out on an opportunity because you dragged your feet.

Fear of Missing Out (FOMO)- If you’ve ever seen the look in a buyer’s eye when they missed out on a property they really wanted, you know what I am talking about. They missed one, but By George, they will not let that happen again. In 2015, I watched a professional athlete miss out on buying a property that would have been an ideal tract for him. Instead of paying the asking price and buying a tract he would have enjoyed for decades, he tried to make a lower offer and he missed out on the deal. He was trying to save about $150/acre and did not offer full-price. Another buyer came in one hour after the ball player made his offer, he offered full price, and bought the property. 2 years later the athlete found another property, across the river from the tract I sold, for about $750/acre MORE than the one he had the opportunity to buy before. He overpaid for a property of lesser quality because he did not want to miss out again.

Feel Goods- Emotions play a big part in many real estate deals. About 2/3 of the properties I sell are related to estate transition, and these farms and land have often been owned by the same family for generations. When it comes time to sell a property, they want to know that it is going to someone who will be a good steward of the property that their family has enjoyed for so long. I saw this exact thing happen several years ago when a family hired me to help them sell a property to a board member of The Nature Conservancy. They were convinced that this beautiful hardwood property along a pristine river would be protected in perpetuity if they sold to this type of buyer. Often older farmers will offer owner financing or will sell at a reduced rate to help a younger farmer get started on their land.

Finding the motivation of the individuals in your real estate transaction will go a long way to helping you get your deal closed. It is important to ask questions of your customers and clients that will give you the answers you need to find out what really matters to them. Money is not the only motivation for many buyers or sellers, and I have seen a seller be offended by a buyer “showing off” with how much money he has. Your odds of a successful real estate transaction increase when the parties are able to each get what they want, and sometimes it takes more than just money to make the deal come together.

Written by: Jonathan Goode is an Accredited Land Consultant (ALC) with Southeastern Land Group, and is a licensed real estate broker in Alabama and Mississippi. Jonathan is also a co-host of the weekly radio program, The Land Show, and loves to serve people buying and selling land.

Aug

Is Your Buyer Ready, Willing and Able?

“Ready, Willing and Able” is a term often used in listing agreements to describe the type of buyer that the real estate broker is seeking to find. Sellers and brokers both want to find prospective buyers that fit this description because it means they are dealing with someone that is “ready to go”. But how do you know if the potential buyer you are negotiating with fits the bill?

Black’s Law Dictionary describes this term as, “persons who are legally and financially able to complete any type of transaction. Authorization and approval are not necessary from any other persons or parties.” This article is not meant to give legal advice or even really to make a point about the legality of a real estate purchase. The aim here is to identify the characteristics of a buyer that is truly “ready to go”.

Ready– Is the buyer truly ready to make the purchase? Have they looked at enough properties to know what they want? Are there lingering questions that are preventing the buyer from moving forward with the purchase? One of the hallmarks of a buyer that is not ready to make the purchase is that they continually ask about other properties or raise objections about the subject property. A buyer that is “ready” will either have done or will be doing the legwork to get loan approval, contract parties for due diligence, and be in a position to make an offer.

Willing– Is the buyer exhibiting the signs of someone who is eager to make a purchase? Are they talking about what they can do with “my” property? Is the buyer under pressure from a spouse or partner to make the purchase, or not make the purchase? “I like the property, but let me talk to my wife (or husband)” is a sign that you may be dealing with a willing buyer, but one that may not be ready or able. There are also plenty of people that are willing to make a land purchase, but do not have the financial wherewithal to act on it. There are probably many more buyers in the “willing” category than those who are in the “ready” or “able”.

Able– When a buyer has identified “the one” and they are properly motivated, the next step is proving that they are able to perform. This summer I have had several situations where the buyers were very interested in a property, they were ready to make the purchase, in one case they even came to terms with the seller, but they were not able to perform due to a lack of funds. There are many reasons why a buyer may not be able to perform, some common ones are: waiting on another property to close to be able to use those proceeds, waiting on funds from an insurance settlement or lawsuit, or proceeds from the sale of a business, stocks, or personal property are delayed.

Establishing proof of ability to purchase residential real estate is a common practice. Buyers simply get pre-approval for their loan or present a pre-qualification letter when they submit an offer. Auctioneers have long required proof of funds for a bidder to participate in the auction. Most land lenders in my area do not offer pre-approval letters. If a seller is uncertain about the buyer’s ability to consummate the sale, it is prudent to ask for proof of funds from their bank or a letter of credit from their lender. This is even more important in a multiple offer situation or in a scenario when a seller may have to purchase another home or move out of their current home. Proactive buyers will want to remove this possible objection from sellers as quickly as possible.

A buyer that is “ready, willing and able” will be able to provide sufficient earnest money, willing to come to terms with the seller and sign a purchase agreement, and will follow through on the transaction. My hope is that this article spurs some thought for buyers, agents, or sellers regarding the land sales process, and that they will be able to take steps to ensure a smoother and successful transaction.

Written by: Jonathan Goode is an Accredited Land Consultant (ALC) with Southeastern Land Group, and is a licensed broker in Alabama and Mississippi. Jonathan is also co-host of the weekly radio program and podcast, The Land Show.

Jul

Buying Land for the First Time, Where Do I Start?

Almost weekly people call me telling me they are looking to make their first rural land purchase. This article is meant to be a short primer on a bare minimum of things you need to know to get started with your land purchase.

1. What do you want? What type of property are you looking for, and what is your intended use? You need to identify and be able to articulate your “Must Have’s” in a prospective property. Is your intention to purchase a recreational property, a rural home site, production farmland, or investment grade timberland? Knowing what you want makes it easier to rule out properties that will not work for you.

2. How will you pay for it? How much can you afford? If you are planning to pay cash for your property, determining your budget should be relatively easy. If you are planning to finance your land purchase, then you need to contact lenders that specialize in making rural land loans. In Alabama, our two main land lenders are Alabama Ag Credit and First South Farm Credit. Most traditional banks and credit unions will not finance more than 5 to 10 acres, so you need to know that from the start. A brief conversation with a land lender will arm you with the information you need to focus your property search. Most land lenders in our area are going to require 15% to 25% as a down-payment, so plan accordingly when considering your purchase.

3. Consider working with a Buyer’s Agent. If you are new to the land buying process, you should consider working with a land broker that specializes in land transactions. Not all real estate agents are equally qualified to assist you with your purchase. Almost every land buyer benefits from having an experienced advocate who can assist them with locating suitable properties, asking the right questions, and using their network of land-related contacts to help with the many facets of making your land purchase. Many times the seller’s agent is working solely for the seller. If you feel uncomfortable or uncertain about your transaction, you should find a buyer’s agent to represent your interests.

When looking for a land agent to represent your interests, ask them a few questions to determine their level of competency and how well you get along with them. How many land transactions have they closed recently? Are they involved with the Realtors Land Institute? Have they earned the Accredited Land Consultant (ALC) designation? ALC’s have taken over 100 hours of land-related education and have proven track records of land sales that are reviewed by a committee of land brokers from around the nation. Those are a few criteria to help you select a broker to represent you in a land purchase.

There are many more things to consider when making a land purchase. The land-buying process takes time. Educate yourself as much as possible on what land is selling for in your areas of interest. Our company produces The Land Show, which weekly brings you advice on many land-related topics such as farming, timber, wildlife, and dozens of other topics. Talk to your land lender and use them as a resource on which land brokers in the area are trustworthy and good to work with. Ask your friends who own land what they like and don’t like about their property. You need to see a couple of tracts to compare and contrast what they offer. Asking questions and learning as much as you can from reputable sources will make your land buying process easier and a success.

Written by: Jonathan Goode is an Accredited Land Consultant (ALC) and is a licensed broker in Alabama and Mississippi. Jonathan is a co-host of the weekly radio program, The Land Show, and frequently helps people buying and selling land for the first time.

Jun

Do You Want It?

85 acres +/- beautiful farm for sale in Blount County, Alabama.

When you have looked at a property and asked all of the right questions, there comes a point when you have to make a decision: “Do you want it?”

Sometime ago I had the privilege of meeting with a family to write an offer on a property they really liked. We had looked at the tract several times together. As I sat at their desk and they asked a few more questions of me, the wife turned to the husband and said, “Do you want it?”. I loved the point-blank clarity of the question, and that she asked it. He said “yes” and we penned the offer. We closed not long after.

I have done a disservice to lots of potential land buyers. I never gave them the opportunity to say “Yes, I want this property.” In a previous career, one of my roles was fundraising for a non-profit organization. After my presentation about the work we were doing, I would always look a prospective donor in the eye and ask them if they would join our team by making a contribution.

I am good at this with land owners when securing a listing. I never fail to let an owner know about the positive aspects of their property and that I would like to work with them. Then I ask for the listing. I learned my first month in the land business that there is nothing I, as an agent, can (ethically) say to “sell” a piece of land. A buyer will spend $250,000 only when they are ready. They either like it or they don’t. But many people like a property and never take action on it, when they should at least be given the opportunity to say “yes”.

For potential buyers who may be reading this article, you should be thinking, “When is the right time to ask myself if I want it?” Here are a few questions you must answer first:

Is this the right location? Is the property you are considering close enough to your home to allow you to use it often? Is it in close proximity to a water-source to use for irrigation if you are farming? All of the specifics of your situation must be evaluated regarding a property’s location.
Does it fit your needs? Is the property sufficiently long and open for the private runway you want to construct? Is there adequate distance between you and the neighbors that hunting is safe (for you and them)? What is the site index for growing pine timber? Check the land out to see if it will meet most of the major criteria on your wish list.
How are you going to pay for it? If you are pleased with how a particular property stacks up to questions #1 & #2, then you should finalize your financing options. Consult ag land lenders, your 1031 intermediary, or CPA to answer any specific questions to how you are going to pay for the property.
Do you want it? When the due diligence is complete to a reasonable level of comfort, you need someone to ask you this question aloud. It’s powerful to have someone ask a life-altering question. “Will you marry me?” “Will you accept this job offer?” “Do you want this property?” Get my drift?

Many prospective buyers get paralysis by analysis. They want to know every detail to every question (I am naturally bent this way). But most of us know what we don’t want within 10 seconds of seeing it. As the layers of the onion are peeled back, and everything continues to look good, you have to make a call to move forward. You can always have the agent put in some contingencies in a contract that give you an “out” if something unexpected and undesirable pops up as you continue to peel layers prior to closing.

Once you do your due diligence sufficiently and you are comfortable with the information you have, then comes the point of decision. “Do you want it?” If so, take the steps to make it yours. If not, move on and keep looking.

Written by: Jonathan Goode who is an Accredited Land Consultant (ALC), and is licensed as a land broker with Southeastern Land Group in Alabama and Mississippi. He is also co-host of The Land Show, a weekly radio show and podcast for people that love land.

Jun

How To Buy Land For The Cost Of A Hunt Lease

Good hunting leases might be one of the most difficult assets to find in the Southeast. Almost daily I get a call or message from a local hunter who is working hard to find a good property to lease. I also hear the stories from hunters whose leased land hasn’t turned out to be what they had hoped: the owner clearcut the timber, the lease rates keep going up, or the land gets sold and the lease cancelled, among other complaints. Whenever I bring up owning the land that you hunt, the suggestion is usually met with a reply like “I’d love to! But that down payment. And those monthly payments.” I hear you, but let me work through a real-life example with you of a friend of mine that recently bought some land whose annual mortgage payments are almost equal to what he would have spent annually on a lease.

The key to making this method work is simple: spread the cost of the land over a few people. The greatest challenge most people will have is finding 3-4 trustworthy friends that have the desire and means to partner up for a land purchase. But if you’re lucky enough to have those strong relationships, keep reading for how little your cost can actually be, as well as advice on how to structure the purchase to protect and to be fair to everyone involved.

Jim was like many of the people that I get calls from: looking hard for a lease and frustrated by what seemed like high prices, overcrowded hunt clubs, and not-so-promising future land management scenarios. Quality smaller properties (approx. 100 acres) were going for up to $4,000 per year, and were almost impossible to find close to Tallahassee. At the same time three friends from work were also looking, and each shared the same frustrations. One day Jim ran across a property for sale: 115 acres for $240,000. It was a great sportsman property – it had fields, woods, and a pond – located in an area known for good game flow only 45 minutes from home. He knew there was no way he could afford (nor his wife allow) a purchase of that size, but after running some quick numbers he realized that if he could get his three friends in on the purchase, they’d each be spending about what it would cost if they leased individually every year. The trade-off would be that they would have to share the property, but instead of throwing money away on a lease they would be building equity in a land investment. And they could spread the load of improving the property among the four of them.

The numbers looked like this:
At a purchase price of $240,000 financed for 20 years at 5%, a single buyer would have to put $48,000 down (at a 20% down payment), and then shoulder a monthly payment of $1,267. But if all four of them went in together, the down payment per person was only $12,000, and monthly payments were $317, or only $3,804 per year – less than some of the lease land they were looking at.

Jim and his friends decided the trade-offs were worth it for the opportunity to own their own property and do whatever they want with it, all while growing a land investment. They’ve actually found that it has strengthened those friendships as they’ve partnered to increase the quality of the game on the land, and made the place something greater than it was. 115 acres has been plenty of hunting space for them this season – they agree that you don’t really need hundreds of acres to have a good season, just the right property and group of people.

Like any partnership, the success of a venture is built on trust between the parties and a good legal structure that protects everyone involved. For land purchases of this nature, many professionals recommend that the partners create a Limited Liability Company (LLC) both to protect the individuals involved and to clearly outline the ownership interests and responsibilities of each member. LLCs can be easily created online these days, but for those unfamiliar with the company structure and process, it would be prudent to seek professional advice and assistance.

To recap: if you partner with a few friends, you can invest in hunting land for about the same annual cost as a lease. There are trade-offs to this arrangement, but it works for the right group of people. The keys to success are finding the right partners, finding the right property, and creating the right legal structure to protect everyone involved. Contact your local Land Agent today to talk more about how to make this purchase method work for you and what properties are currently on the market in your area.

Daniel Hautamaki is a Land Agent with Southeastern Land Group. He lives in Tallahassee, FL and serves land buyers and sellers in North Florida, Southeast Alabama, and Southwest Georgia.

May

Finding Land from Far Away

Pasture on 65 acres +/- for sale in Dallas County, AL.

“What is the best way to find a rural property that we might want to move to, while we still live several states away?” This was a great question posed to Dave Milton and me from an avid listener of The Land Show. Helen from Maryland said she and her husband want to relocate to about 30-40 acres in Alabama in the coming years, and wanted some insights into how best to locate the farm of their dreams. This article attempts to address a few things you can do to locate that perfect place.

There are a few questions you need to be able to answer to begin your search. This list is not exhaustive, but will get the ball rolling.

Where do you want to live? Do you have a particular city or area that you would like to own property near? If you are moving from out of state, you may be selecting a site based on proximity to an employer, some relatives, or quality medical care. By the same token, you may be wanting to move to a rural setting, but are not confined to a certain city. If that is the case, the next question is important for narrowing your choices.

Wilbourne Lake Farm for sale in Perry County, AL

What do you want to do on your land? Helen’s dream is to own a property where she can have chickens, a few cows, and maybe a pig. She probably wants a good garden spot and a place that will grow some berries and fruit trees. I hear that all of the time, and it resonates with me because my family lives exactly that way. You know the things that are important to you, and sharing those with a local broker will help you identify properties you may want to consider.

Earlier this week a retiring attorney who wants to move back to Alabama contacted me, and said it is important that he and his wife be able to shoot firearms on their property. We have a special new property in Shelby County that has a shooting range as part of the gated community. If the What is more important than the Where, you definitely need to clearly identify and share your objectives for the new property. Knowing what you can and cannot do in a given area will help narrow your search for prospective properties.

1149 acres for Sale in Dallas County, Alabama

What is your budget for the purchase? How much are you willing to spend on your land purchase? This is a number you need to determine BEFORE you start driving around looking at properties. You should also be willing to share your budget with an agent so that they can help you identify properties that are a good fit for you.

If financing is going to be a part of your purchase, ask a broker for information regarding a good land lender. In Alabama, we mainly deal with two great companies that specialize in rural land loans: First South Farm Credit and Alabama Ag Credit. Farm lenders typically require a 15% to 20% down payment, and the interest rates are slightly higher than a residential mortgage. Each of these lenders has several programs that should be able to help you easily make your purchase.

These days, searching for land is easier than ever online. There are some great land listing sites that allow you to find available properties. We use LandsofAmerica, LandWatch, LandandFarm, LandFlip, and of course our own site SELandGroup.com. All of these sites have filters that allow you to narrow or expand your search based on criteria that are important to you. These sites are helpful in getting an idea of what is available, what land prices are for listed properties in an area (notice I didn’t say what it sells for in an area), and who are the brokers that specialize in land in that area.

The best advice I can offer for someone living in a different state that is looking to move is to find a broker you can trust that specializes in helping people buy and sell rural land. There are so many things that you do not know about the laws, customs, and opportunities in unfamiliar territory, that you need a reputable and seasoned guide to help you. You need someone that can help you navigate the potential pitfalls associated with all of your unknowns. Look for brokers with good reviews on social media sites like Facebook or Linkedin, ask for referrals from friends and family, or interview several candidates and choose the one that seems the best fit for you.

There are Realtors that focus on helping people buy and sell land. Many of these brokers belong to the Realtors Land Institute (RLI), which is a trade organization for those among us that focus mainly on brokering land. The most accomplished land brokers are recognized with a designation from RLI, and are known as Accredited Land Consultants (ALC’s). ALC’s have undergone rigorous education and professional examinations before they can earn the designation. These are people that demonstrate knowledge, experience, and professionalism when it comes to land transactions. You can search for RLI members and ALC’s on the Realtors Land Institute website.

Dealing with a broker or agent that you can trust, who specializes in land, will help ensure your land purchase is what you have been dreaming of. Find someone that is competent in land, has a servant’s attitude, and is knowledgeable about the area that you are searching in. That is a recipe for a successful transaction.

I hope this gives you a few steps to get you started in your search for the property you’ve been dreaming of owning. Our experienced team at Southeastern Land Group would love to help you with any of your land buying or selling needs. Please feel free to contact our office at 866-751-LAND, and Jeanne or Susan will put you in touch with the right agent for your needs; or feel free to contact me directly with any specific questions. Thank you for reading, and please Share this article with your friends.

Written by: Jonathan Goode who is an Accredited Land Consultant (ALC), and is passionate about helping people buy and sell land. Jonathan is a licensed broker in Alabama and Mississippi.

May

“I Want To Sell My Property….Where Do I Start?”

“I want to sell my property, what do i need to do?” This is a common question this time of year. Its getting hot, summer is practically here, but i need to sell my property…

Preparation and planning is key to anything. Whether its a sporting event, going on vacation, or planning for your retirement….it is no different with selling land. In order to have a successful listing and selling experience, you have to have a plan from the start. If you fail to plan, you better plan to fail.

Any time someone calls me and says “Ive got some land I want to sell, what do i need to do?” I always respond, “well, you have already completed the first step.” First thing on the list is to call a experienced Land Agent. At Southeastern Land Group we specialize in selling farmland, timberland, recreational properties, investment property, and agricultural land. We have agents living in Alabama, Georgia and Florida that are ready to create results for you. We are licensed to sell in AL, GA, FL, MS, and TN. Every property is unique in its own way, therefore, not every property needs the same preparation before it hits the market.

Historically, late Spring and early summer can sometimes drag a little longer in the time frame it takes to sell property. Does that mean its a bad time to list during the summer? ABSOLUTELY NOT! In fact, its one of the best times to list your property because we have all of the Outdoor Expos, and Outdoor Shows during the summer and its a great opportunity to get you property in front of thousands of eyes that i will not get any other time of year. However, with the knowledge and expertise we bring to the table, we can help you make your property attractive year round. I actually like summer time listings because it gives me a chance to do some things that nobody else does. We can make recommendation that will take your property from being simply “another listing”, to something that is highly sought out, and stands out compared to other properties. We can help you make the right decisions as far as what improvements needs to made, what work (if any) needs to be done, and how to best market your particular property. Sometimes property is turn key and ready to hit the market and if so, thats great. Most improvements are small, low in cost, and can be done rather quickly. However, these small improvements can make a BIG DIFFERENCE when they are side by side with other like kind properties.

Some land owners may ask “How, do you know this will help. And how do you know this is going to draw more attention to my property?” We work with buyers day in, and day out. We listen to what exactly they look for in a property. With the ability to know what a buyer is looking for, and what a seller has to offer is what makes a sales traction process run smooth.

If its time to put your property up for sale, we have a proven track record to help get the job done. Don’t call just any real estate company….consult with the experts that specialize in what you have to sell. We are here to not only help, but to create results.

Remember the “5 Steps to Selling Your Property”
1.) Contact Me
2.) I’ll handle the rest
3.)
4.)
5.)

WRITTEN BY: John Morris, Land Agent

Home » Blog