buying timberland for conservation and logging?

[MyWorkingForest]

i am thinking about starting a company this summer that will be for turning the conservation of forests into a business and to generate money from logging while protecting the land with working forest conservation easements. my question is can it be done by starting with 5 acres of good timberland and using the logging money to keep buying more land and log the added land and buy more land from more logging operations and conservation easement sale money? or is it best to start out with say 16,000 acres and go from there since the larger the property the more it can yield money wise every year. so can starting with a few acres work to add up to say 50,000 acres while being able to keep up with the taxes? and if not what other incomes can there be for 5 acres like say a camp ground lease?

[WDH]

The environmental groups that fund conservation easements are not likely to be interested in only small blocks of land.  They want scale.  Most times, they will say that a 5 acres patch surrounded by other land not under the easement is not sustainable, and the ecological value of such a small area is minimal.  I have heard them say that about 200 acres, much less 5 acres. 

[JohnM]

Welcome to the forum, MWF.  5 to 16k...wow.  This should be interesting. :P

JM

[KBforester]

I would say you can't do it with logging proceed alone. I am a forester with a respectable land trust, that currently has 33,000 acres. Granted, its cut over industry land, but the logging at this point can only cover maintenance costs. Don't worry about taxes too much, it sounds like you would be going in the direction of a non-profit organization.

An integral part of most Trusts/conservation outfits is a active, passionate grant writer/ fundraiser. There are lots of government programs (even in this economy) that dish out money to conservation projects, particularly to properties at risk for development.

Regarding the scale... I have applied for funding with programs that were actively funding five acre lots. They key is, they were in heavily populated areas with EXT REAM risk of being developed. The highest financial use of the property would have been do subdivide it into 1 acre blocks, and or fill in wetlands etc. After all, biodiversity is at its rarest, where human population is at its highest. This particular funding source had a board of various environmentally oriented professionals,  that seems fairly bias against logging.

If you are sticking to this scale, and you are really passionate about the conservation, then I would cut out the logging all together, at least for now. If you are passionate about good sustainable harvesting, I would try to go up in scale. 

[MyWorkingForest]

so basically i can not start small with a few acres and work my way up to a few hundred thousand acres of timberland?

[Ianab]

so basically i can not start small with a few acres and work my way up to a few hundred thousand acres of timberland?

Not in one lifetime...

The issue is the time between harvests. Even here in NZ you are maybe 25 years to grow a useful tree. Most climates or species allow at least twice as long.

If it was easy, everyone would be doing it....

Ian

[MyWorkingForest]

i am just thinking how can i save Americas forests and get wealthy at the same time. so starting small has been ruled out. anyone else have any ideas? like say a park run like a state park? organizations have been ruled out to since i want to earn a ton of $$$ at the same time.

[Ron Wenrich]

I know of several guys that started out with nothing and became large landowners.  They had disposable cash and were in the right place at the right time.  It had to do with tax sales.  The county was mapping the land, and they found several large tract of timberland that had no owner.  So, they sold them.  Some of these tracts were up to 400 acres.  But, this was back in the '60s and '70s.  A lot of that land had nice sized timber on since the last harvest was during the chestnut blight.

Its still possible to get tax sale lands, but you need cash on the day of the sale.  Most of the stuff has the timber removed, or the land doesn't exist, or the land doesn't have access.  You have to do the research.  Most of the guys I know that did it were lawyers that spent a lot of time in the courthouse deed rooms.  The non-lawyers had jobs that allowed them the time to spend in the courthouse.

[MyWorkingForest]

do the lumber companies that sell lumber from forests they own make way more than investors who sell timber to saw mills? i mite try to start a saw mill business that owns timberland as well and will use proceeds to buy land that way. every town should have a saw and pellet mill as well as paper plant. the idea is to relocalize to an elm street economy. maybe ill create an Amish style saw mill. i am sure people will pay a lot for "eco lumber". they can make pellets out of leaves to to burn in pellet boilers and stoves such as "tree free pellets".

[WDH]

do the lumber companies that sell lumber from forests they own make way more than investors who sell timber to saw mills?

No.  Most all the large timber companies with the exception of a couple like Weyerhaeuser and Plum Creek have sold all their land and no longer own any.  They can buy the timber cheaper from private landowners than they can do themselves given the cost of the capital tied up in the land.  In the case of Weyerhaeuser and Plum Creek, they re-organized as timber REITS (real estate investment trusts) that have tax advantages.  However there are a lot of restrictive rules and regulations on what they can do.

The only way to get rich on land is to buy it for timberland value and sell it for real estate development, but there is a lot of risk in that depending on what the land and real estate market does in the future.  Those that did this in the 2000 - 2006 time frame when land sales were booming, and did not sell out by 2007, went bankrupt. 

[ellmoe]

 

i am sure people will pay a lot for "eco lumber".

What you have is a dream. A dream that many more exerienced and educated people have had before you. Reality "bites". It sounds as if you have little or no capital, and the same level of knowledge. While I'm right there with you with what you'd like to do, I'll come out a say what a lot of the Forum members will not. You have a dang near impossible goal ahead of you, particularily in a short time frame. There are some members here who have developed some nice properties through hard work and time. I don't think any of them have made a "ton of money" from their properties. It is usually the other way, start with a "ton of money" and then you can get your property. I wish you the best of luck if you go forward, but don't set yourself up for failure. Talk to mill and proerty owners, loggers, and lumber sellers, and get a realistic picture of what you propose. Good luck.
Mark

[beenthere]

do the lumber companies that sell lumber from forests they own make way more than investors who sell timber to saw mills? i mite try to start a saw mill business that owns timberland as well and will use proceeds to buy land that way. every town should have a saw and pellet mill as well as paper plant. the idea is to relocalize to an elm street economy. maybe ill create an Amish style saw mill. i am sure people will pay a lot for "eco lumber". they can make pellets out of leaves to to burn in pellet boilers and stoves such as "tree free pellets".

I'm curious, where are your ideas coming from? College courses? Media articles? Technical publications? Mother Earth?

You have apparently put together your ideas from information garnered from various sources. Just real curious as to where.   

Hope we can help you get those ideas straight in your mind. ;)

[Rocky_Ranger]

i am just thinking how can i save Americas forests and get wealthy at the same time. so starting small has been ruled out. anyone else have any ideas? like say a park run like a state park? organizations have been ruled out to since i want to earn a ton of $$$ at the same time.

I couldn't let this one slide; save America's forests from what?

[MyWorkingForest]

I couldn't let this one slide; save America's forests from what?
[/quote]

i mean saving Americas forests from everything from fracking for natural gas to mining and subdivisions.

[WDH]

The problem is getting people to pay you for saving the forest from development.  The public at large gets their forests free right now because people like me own the land and bear the cost to do so.  Another aspect is the land owned and managed by the Forest Industry and the Timberland Investment Management Organizations (TIMO's).  They have taken a lot of flack from the Environmental groups, but they are the ones managing the land for multiple use and abide by the Best Management Practices.  The public gets the benefit and they do not even realize it. 

[terry f]

    Could I ask a question of the foresters. If a guy had a chainsaw, skidder, and selfloading truck, in your area, and started out with 40 acres of average timber, could he snowball that into more land. In other words, if you got $1500 an acre from the timber, and comprable land was $1500, you could do this? In your areas, what would the average be?

[MyWorkingForest]

how profitable can cabin rental businesses be? i remember seeing these properties that were protected working forests but the conservation easement allowed like over 40 small cabins to be built in designated spots. instead of logging maybe ill form a cabin rental business down the road. low impact cabins that do not destroy the land. do concession companies have to pay a certain amount of there profits to the park like in public parks?

[Ianab]

    Could I ask a question of the foresters. If a guy had a chainsaw, skidder, and selfloading truck, in your area, and started out with 40 acres of average timber, could he snowball that into more land. In other words, if you got $1500 an acre from the timber, and comprable land was $1500, you could do this? In your areas, what would the average be?

I would suggest not if you wanted to earn a wage, pay your overheads etc.

You might be able to make that sort of return, but if you applied that to land purchases you would effectively be investing more time and money into the enterprise.  I doubt you could pay your expenses, and yourself a wage, AND have many more $$ to invest.

You might be able to do it with a slight profit if you where both smart AND somewhat lucky, but not as any form of "get rich quick".

Ian

[Dodgy Loner]

    Could I ask a question of the foresters. If a guy had a chainsaw, skidder, and selfloading truck, in your area, and started out with 40 acres of average timber, could he snowball that into more land.

Well, since you're asking about my area, the answer would be "no". Being in relatively close proximity to Baton Rouge and New Orleans, our land is worth too much to buy forested land and make enough money from logging it yourself to cover the entire purchase. But it might be possible in an area where the development and recreation value of the land is insignificant - as long as (as Ianab noted) you're okay with not making any money and barely covering your overhead in the meantime.

[John Mc]

The secret to making a small fortune in Forestry or Logging?

...  start with a large fortune

[Mooseherder]

And I thought that I had a lot of DanG irons in the fire. :D

[WDH]

You definitely cannot buy land for timber value alone in this area.  What's worse, is the timber market is down quite a bit, so timber today has lost value relative to the last 15 years.

[terry f]

     Ianab, I didn't mean to make a wage, or a proffit. I was just wondering if there was a break even point, if the equipment, and the original land was paid for to start with. WDH, thats kind of my question about timber value to land value.

[Ianab]

What I'm saying is that if you don't make a wage while logging it, then you are in fact investing (time, if not money). Pretty much the same as if you went to a 9 to 5 job, saved the money, and bought more land with that cash....

This isn't to say you can't achieve something by buying the right tract of land, selling some of timber from it, still leaving it in good condition for future harvests. But I think you are being a bit hopeful expecting to get more for the timber than you paid for the land, especially selling it as standing timber...

Now if you had your own equipment, sawmill etc then you might be able to turn a profit. Especially with things like building a cabin for future rental income and selling some of the wood as sawn timber, or even as finished items (garden furniture, portable garden sheds etc) Things that can be made relatively simply from rough sawn wood.

These guys are doing the whole sustainable forest / value added thing.
http://www.timbergreenforestry.com/
You might get some ideas from how they are working. But they have invested in enough equipment to process a low value tree into high value installed hardwood flooring. So a tree that might be worth $50 standing in the forest could be worth $1,000 installed as flooring.

Of course there is a lot of work to get from A to B, but that web page illustrates how it can be done.

Ian

[thecfarm]

This is in my area.Land will get logged than the For Sale signs goes up on it. But this is only small parcels too.like 20-50 acres too. Probaly much differant 4 hours from me.