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Buying land for later

Started by Farmboy 96, June 29, 2015, 03:18:46 PM

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Farmboy 96

I have the chance to buy a 101.57 Acer woodlot thats two towns over from mine. If I were to buy this it would be along with my parents because its the only way I can get the loan. But once paid for they would sign it to just me and I would be the one paying for it anyway. The old man that owns it wants $65000.00 for it but my plans are to pay for it as much as I can by cutting the woodlots that i've got lined up for work rather then cutting it all right now. If needed I wood cut just enough now to make payments. Wood consists of Beach, white & Rock Maple, ash, Red and White oak, Hemlock and Pine.

The reason I really want to buy this and try to save it for later is because up here in my part of maine it seems like wood is being cut way to fast and I fear there won't be much left in the years to come. I was wondering if others have this issue in you area to? In just the past five years so much wood has been cut in a 30 mile radius it seems that in the next 10 years nothing will be left. Do any of guys buy land to cut for a rainy day or just buy to strip and try to resell?

mesquite buckeye

On the surface this sounds like a good price for timberland. Time to do some research and look up the soil survey for site index information for trees. Also I would look through the land and make an unbiased analysis of what the standing timber value is. Does it have timber ready for harvest now, or are there a lot of young trees needing thinning and time to reach a valuable size? What is the general health of the stand? What is the general quality and health of the trees growing there? Are there a lot of cull trees present and is there a market for poor trees, such as firewood?

Best of luck. ;D 8) 8) 8) :snowball:
Manage 80 acre tree farm in central Missouri and Mesquite timber and about a gozillion saguaros in Arizona.

gspren

  Are you planning to re-sell the land in a few years or would you plan on keeping it long term? If you plan to only have it a few years then the value of the standing timber needs careful evaluation whereas if your going to still own it when your hair turns grey you will probably be OK even if the timbers not mature. Very few investments are safe but long term land is close to safe.
Stihl 041, 044 & 261, Kubota 400 RTV, Kubota BX 2670, Ferris Zero turn

OntarioAl

Farmboy 96
You are a breath of fresh air 18 years old with a plan for the future.
Buy land as long as it is to be obtained at a fair price, they are not making anymore of it!
My thoughts
Al
Al Raman

Peter Drouin

Dose it have a lot of road frontage?
A&P saw Mill LLC.
45' of Wood Mizer, cutting since 1987.
License NH softwood grader.

Jhenderson

In order to make payments you're looking at $800-900 per acre in timber value. You need to pay interest,harvesting expenses plus trucking.That won't leave much wood for the future. Now you know why people over cut their land.

stihltoomany

I paid more than that 30 years ago here in Iowa. Sounds like a good deal to me but I'm not in ME. I wish I had more timber.
Way too many saws, mostly STIHL
Bobcat S650, Bobcat 331 excavator Bobcat A770
and other dirt toys
Looking for hyd bandsaw mill, Timberking used maybe? NOT anymore!
WoodMizer LT40 super

Ljohnsaw

You can buy 100 acres for $65k?  Or did you drop a zero? ;)  I wish I could see land for $650/acre!  I paid $8,000/acre for my 10 acres.  While there is some really nice BIG pine and cedar, I'm not logging it.  I'm building on it for vacation property.
John Sawicky

Just North-East of Sacramento...

SkyTrak 9038, Ford 545D FEL, Davis Little Monster backhoe, Case 16+4 Trencher, Home Built 42" capacity/36" cut Bandmill up to 54' long - using it all to build a timber frame cabin.

Farmboy 96

Yes the price is $65,000.00. The wood isn't great but is extremely dense. Majority of the wood is between 16- 24 inches in diameter, tall and goes every which way but straight. Land is a little hilly but not to bad with a few small streams running through the property. There is 300 ft of road frontage. 15 yr loan monthly payment would be around $400.00. So if I had to cut it now all I would need to do is cut about one load of pulp a month to make the monthly payment. Other then Insurance and rent this would be my one really big payment. Like I said before Id like to try and pay for it by cutting other peoples woodlots that I have lined up and take part of that paycheck to pay for it. If it ever stops raining and I can actually work a full week I would try like crazy to make double or triple monthly payments whenever possible. Still thinking it over for now as the man who owns it doesn't have it advertised yet.

P.S. Lands not for selling its for buying. 8)

mesquite buckeye

So cut the big crooked ones and try to miss the straight little ones coming in next to them. By the time you are 45 there will be lots of good timber coming to maturity. ;D 8) 8) 8) :snowball:
Manage 80 acre tree farm in central Missouri and Mesquite timber and about a gozillion saguaros in Arizona.

starmac

Not sure what you are waiting for. At 400 a month you should be able to pay for it easy enough without touching it.
If it is really timbered the way you say, work on thinning and improving it when you have a slow time, and cut a years worth of payments of of it once in a while.
Old LT40HD, old log truck, old MM forklift, and several huskies.

BradMarks

Need a partner? ;D     I'd sure try to aquire the land if it were me.  I once had to back out of a purchase of 80 acres over 20 years ago. Wish I could've pulled it off as it is worth a LOT more now.  Good luck to ya!

Puffergas

Better than spending the 65K on booze,  smokes, cable TV and fast cars.. 😱


Jeff
Jeff
Somewhere 20 miles south of Lake Erie.

GEHL 5624 skid steer, Trojan 114, Timberjack 225D, D&L SB1020 mill, Steiger Bearcat II

Tom L

that sounds like a great deal, I don't know how you could go wrong

that price would not buy you an acre here in NJ, not one acre

windy hill farm

Sounds like all the stove wood you could sell. I don't know what a cord of good hardwood is selling for in Maine. Just taking out the crap wood you should be able to make payments. Also if you cut stove wood for next year and sell it as seasoned wood the price should be higher. If you don't hunt you could lease it out for a fee, some extra income. Whatever you do at 18 my hats off to you. I bought my first piece of property when I was your age and most people laughed at the piece of land I bought for $1000 They weren't laughing 5 years later when I sold it to the town for $20,000  8) Sounds like a good deal good luck to you, nothing like working on your own piece of property.
New Holland TN-60DA, Farmi Winch 501,Rhino 9.5ft 3pt backhoe,Sthil 440,361,270, 170 and O26 and several trailers.

g_man

Everyone thinks of land and the value or burden of ownership differently. So this has to be your decision. If you can see enough timber, firewood , or pulp on there to pay the taxes then the 65K plus interest is like an investment. The price of land does not decrease like stocks and bonds. But to be sure you won't loose money you will have to commit to long term ownership. This doesn't mean short term won't payoff. It is just less likely. 18 year olds have a lot of things to spend money on so investments can be hard to maintain. I applaud you for your mature level in thinking.

I always wanted a decent sized woodlot. It did not happen until I was 53. If I knew then what I know now when I was 18 I would jump at the chance you have, no question. If you love to work and be in the woods. If you want to see the benefit of your work pay off long term and can stand to be saddled with the loan at 18 then go for it.

gg

teakwood

You should do it, land is always a good and safe investment if you buy it cheap. When i was 22 i left Switzerland i went to live in Costa Rica. I had a chance to buy cheap land and i ask my uncle, a big and powerful businessman, he told me to buy it right away because land will always increase value. so i bought the 116acres for 40k (was really cheap) now its worth an easy 250- 300k, i planted that land with 30000 teak trees back then, they are now 10 years old and will bill harvested in an other 10-15 years. I would turn down an 800k offer on my finca! I will make more in 10-15years. And its not all about the money, it gives me great satisfaction to walk thru my own forest!
National Stihl Timbersports Champion Costa Rica 2018

mesquite buckeye

All investments can go up or down in value over time. I have seen land drop in value by half or more, more than once. :snowball: :snowball: :snowball:
Manage 80 acre tree farm in central Missouri and Mesquite timber and about a gozillion saguaros in Arizona.

starmac

Just my way of thinking, but I would get this deal sewed up pretty quick, even though he doesn't have it advertized for sale. Him just mentioning it to someone that you are thinking of buying it, may get him a better offer, seen it many times.
Old LT40HD, old log truck, old MM forklift, and several huskies.

g_man

Quote from: mesquite buckeye on July 01, 2015, 09:16:46 AM
All investments can go up or down in value over time. I have seen land drop in value by half or more, more than once. :snowball: :snowball: :snowball:

That is true but I bet the land that dropped didn't start out at $650 per acre.

lopet

History always repeats itself and yes there is that old saying, what goes up must come down !
If things go sour or I should say when things go sour 15K or 20K per acre land has a much bigger potential to come down than $ 650  per acre land IMO.
65000 for 100 acres indeed does not sound a bad deal even without seeing the trees. If you think you can make the payments without much of a struggle, you will own  a piece of property in 15 or 20 years and still have some timber to harvest.  Good luck 
Make sure you know how to fall properly when you fall and as to not hurt anyone around you.
Also remember, it's not the fall what hurts, its the sudden stop. !!

chestnut

  I would be BUYING. I never heard anyone regret buying forest land but, I've heard a lot of old timers talk about how cheap they could have bought such and such ground when they were young.

terry f

   No brainer, I don't see a downside to it, unless you have a wife and kids that need all your money. Chestnut hit the nail on the head, plus you could make those payments working at McDonalds if you had to.

mesquite buckeye

When everybody thinks an investment can't lose, that is when a drop is coming.

You still need to do due diligence and check out the productive capacity of this land.
Manage 80 acre tree farm in central Missouri and Mesquite timber and about a gozillion saguaros in Arizona.

BHC

everyone is right when they say there not making any more land. But check it out good, taxes are due every year, wood markets go up and down, when you sell it, if you do it is a capital gains, as well as selling wood off your own land in Maine it will be taxed as a income.
The one thing i remember most from forestry school At University of Maine was a professor saying wood grows more and safer money in the bank then it dose standing in the woods! there are just as many dangers of loosing in both places, just be a aware it easier to change how it invested in the bank not quite so easy to move it when it needs to move when standing in the woods. I think that is why you see so many lots and commercial timber lands cut so hard, here, it is what they been teaching foresters for a long time now, and when they do the math, it pays more to cut now, with less risk. We all may look at a wood lot a lot different than a business dose. Something to think about.
You can not lease hunting rights in Maine... you can charge a road access, or leases a bait site, but can not lease hunting rights, it is against the law, just so you know.
Look at other options, such as gravel. if the hunting is good maybe a camp you can build and rent out.
Making all things equal if you had this 65,000, what other places could you spend it and what kind of profit margins can you expect from them?
I know a few people who have done this and think it a good idea, and also know some who would not do this again, Don't let your heart control your pocket book, if this is a business decision, and it sounds like it is when you call it a investment, make sure the numbers make sense, In black and white written down on paper!
One other thing as you probably know, intent to cut, forestry rules change on how you can cut over 100 acres here as well, as multiple lot ownership. just another factor you need to keep in mind!
Good luck with your decision


84 C5D Tree Farmer, 78 S8 International, Thompson Band Mill, M14 Foyley Belsaw

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