Land investing for cash flow.
Specialist · Santa Cruz, CA (Santa Cruz) · Member since 2017 · 31 posts · 10 votes
Land investing for cash flow.
Most Popular Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesMy dad started in the land business in 1966 right there in Loch Lomand Ben Lomand.. the office was at the Trout farm in. ( not sure if its still there or not.
so i grew up in the land business.. there are many ways of course for commerical use of land as you talked about above.
but one of the best ways is simply finding that smokin deal you pay cash for then sell it for more on terms and collect the payments..
so i grew up in the land business.. there are many ways of course for commerical use of land as you talked about above.
but one of the best ways is simply finding that smokin deal you pay cash for then sell it for more on terms and collect the payments..
36 Replies
- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesMy dad started in the land business in 1966 right there in Loch Lomand Ben Lomand.. the office was at the Trout farm in. ( not sure if its still there or not.
so i grew up in the land business.. there are many ways of course for commerical use of land as you talked about above.
but one of the best ways is simply finding that smokin deal you pay cash for then sell it for more on terms and collect the payments.. - Specialist · Santa Cruz, CA (Santa Cruz) · Member since 2017 · 31 posts · 10 votes6y
@Jay Hinrichs I know exactly where that is! That is awesome to hear. I wish real estate here was easier to purchase here in the Bay Area and Monterey Bay.
I am very interested in flipping land too, but my entrepreneurial spirit wants to open up business’ using land as well. And also holding the land on some of my deals.
I would love to have my first deal be a cheap piece of land with an airstream airbnb. Just trying to educate myself as much as possible and doing research before I actually commit to this venture.
- Real Estate Broker · Kansas City Metro · Member since 2015 · 2k+ posts · 1k+ votes6y
@Michael Guydish A few things. Have your read Dirt Rich? It's all about using land to make money. Mostly it is regarding flipping land.
Also, what about buying farm land to where it cash flows? I come from a farming background. It could make money with the right farmer and correct location
I don't know about California land, but here in the midwest you can buy land that cashflows. I have 2 small farms right now. One is in a government program called CRP. That's Conservation Reserve Program, they pay me to set it out and not grow crops. There is some maintenance as it has to be mowed every year and there is a some expense to establish a cover crop. The draw back is the cash flow is pretty small for the size of investment, but there has been only 1 time in the last 50 years that the value of farmland went down. Appreciation is not a given every year but on a long term hold you can at least expect land to keep up with inflation and probably more. I could increase my cash flow on that particular piece by leasing the hunting rights. the other piece is rented to a farmer on a crop share. I would not recommend a crop share lease to anyone without a farming background. Cash rent is much safer where the farmer pays a set amount per acre.
I bought my first farm in '86 at the bottom of the cycle when land had lost about 50% of its value, There was a house which I lived in. The land was 70% hardwood timber. I held the property 10 years sold the timber then sold the house then the land. It was a long term deal with very little cash flow but there was still money made there.
- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Gail W. I love the timber play. in the Pac Norwest there can be HUGE money made in land and timber.
its not uncommon for a 10 acre tract of mature douglas fir to have a net timber value of 200 to 400k in your skinny jeans.. :)
I think there is a huge play for the 20 to 30 year olds to diversify and buy logged over tracts that are in great growing sites.. its easy to determine department of forestry has it all mapped out and on line.
set it and forget.. the Coast ranges are the best as they are not prone to fire which is the really the only risk. doug fir does not get the pine Beatle so I would stick to doug fir.
I know there is money in hardwoods but you need a lot of acres to generate larger chunks of cash compared to softwood.
but great play loved your story.
And where the orginal poster is located there is MONSTER redwood and fir but pretty tough to get a logging permit .. to next to impossible.. there are stands of redwood in those valleys that 10 acres could bring multi millions in log revenue.. I tried about 20 years ago.. but just not possible.. We were able to log redwood up north in Sonoma medo and humbolt counties but its a long process getting permits.
- New to Real Estate · Southwest Virginia · Member since 2020 · 14 posts · 5 votes6yThis is an interesting post, as this is what I am looking at myself. I am looking at buying land in Virginia with timber; harvesting and trying to decide what to do with the land after. For I want to buy and hold but need the cashflow to keep the REI going. Was thinking of leasing the harvested land to a winery, but that would take a few years to establish a cash flow. So, do I make a few improvements (add a well, get a septic perk, make improved access, etc) and subdivide (to sell), or do some other lease (hunting, ranching or crop farming). Along with Michael, I would love to here what other people have done to make land cash flow. Michael, thanks for the post and look forward to hearing more great ideas.
Be Safe
C Moore I am just getting into this. I am mostly looking to flip straight up full payment. I know I could do the monthly payment dealio and will eventually. I do like the fact there's no traditional headaches or big expenses other than some defaults on your monthly peeps perhaps.
For those who do monthly, what is your default rate?
@Jay
As I said I know don't know much about the firs and pines. they are few and far between here. You're right about needing more land to cash out though, the piece I was talking about was 135 acres and at today's timber prices you would not be able to sell the timber for as much as you are talking for 10 acres unless you hired a cutter, bought a truck and skidder, and did it yourself. I do think the younger investors would do well to buy ground and hold it. I also think that there may be an opportunity here soon to buy timber land again because of the farm economy being in a pretty poor state right now.
- Specialist · Santa Cruz, CA (Santa Cruz) · Member since 2017 · 31 posts · 10 votes6y
I would love to know more about the timber game. I feel like there is huge opportunity in land that a lot of people sleep on. Especially cash flowing it. I would love to get into land and hold some and flip others.
As for flips, I see people getting properties pennies on the dollar, then turning around and flipping it full price or do terms. I see people doing terms then recouping their initial investment with the down payment then doing a $100-300 payments a month. Then repeat the process.
My number one question to do any of these strategies is how does everyone find these land deals and how do you know if its a good investment?
- Investor · Northern MN & WI · Member since 2020 · 55 posts · 64 votes6y
@Michael Guydish I had 88-acres of rural river front property a few years back. It was all bottom land and flooded periodically. I couldn’t figure what or how to do anything with it. I looked in to leasing it for hunting, but couldn’t get enough return to make it worth the added liability. I did not want to log the timber because I am an environmentalist, but when you buy and hold timber, you have to always worry about illegal loggers, timber thieves logging it for you. Rural raw land is the hardest type of appraisal. You have to do really your homework. I eventually sold my property at a modest profit, but it was a bad deal from the beginning that I could have easily taken a loss on. Developing land is is another conversation, but there just isn’t much profit in trying to cashflow raw land. You can usually cover your taxes plus a little bit, but the acquisition costs of the land usually makes it a poor investment. The last thing is that you cannot depreciate raw land, so you don’t get the tax relief that you would have with other real estate.
@Michael Guydish I'll bet you there would be very high demand in SC for an airstream situation if done right, although zoning/permits might be difficult. Depending on zoning you could look at subdividing, although it didn't sound like that's the direction you want to go? Then you run into the issue of finding buyers for undeveloped lots. We are trying to figure that out right now- we are trying to work a deal that would result in a lot in an area where finished houses sell for 1.2-3 million, but it's at the top of our budget and then we worry about having to hold an empty lot for a while if it takes a long time to sell...
@Jay Hinrichs agreed regarding that it's near impossible to get logging permits in an area like that in California these days. My family has been in the logging business for 3 generations in California and I'm sure that it's gotten even more difficult since you tried 20 years ago. We have looked at a few properties in Northern California to make the timber play, but it didn't quite pencil out for us at this stage. It's great to hear from somebody who has done it successfully! Love to see the timber industry represented!
- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Account Closed:
@Michael Guydish I had 88-acres of rural river front property a few years back. It was all bottom land and flooded periodically. I couldn’t figure what or how to do anything with it. I looked in to leasing it for hunting, but couldn’t get enough return to make it worth the added liability. I did not want to log the timber because I am an environmentalist, but when you buy and hold timber, you have to always worry about illegal loggers, timber thieves logging it for you. Rural raw land is the hardest type of appraisal. You have to do really your homework. I eventually sold my property at a modest profit, but it was a bad deal from the beginning that I could have easily taken a loss on. Developing land is is another conversation, but there just isn’t much profit in trying to cashflow raw land. You can usually cover your taxes plus a little bit, but the acquisition costs of the land usually makes it a poor investment. The last thing is that you cannot depreciate raw land, so you don’t get the tax relief that you would have with other real estate.
Timber land holdings is a niche for sure.. some of the largest owners in the US are the Harvard endowment and John Hancock. at least as it relates to North west timber holdings. the reasons is in our area the growth rate generally will equal ( if markets stay calm price wise) return on investment is 12 to 14% per year.. IE the trees grow you have more of it each year.. So choosing the right growing site is important.. along with Species.. I know WI has a big Timber industry.. I used to sell my export logs to Menasha.. AS for thieves I hear you there but in our area.. Mills wont buy logs from just anyone.. and you have to prove by Deed that you won the timber before they will give you a purchase order.. or be a company like we were/are well known in the industry for decades.. Along with stealing Timber will put you in jail. .But it does happen.. and loggers can and do rip off landowners its something that you need to watch carefully.
- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Kelsey T.:
@Michael Guydish I'll bet you there would be very high demand in SC for an airstream situation if done right, although zoning/permits might be difficult. Depending on zoning you could look at subdividing, although it didn't sound like that's the direction you want to go? Then you run into the issue of finding buyers for undeveloped lots. We are trying to figure that out right now- we are trying to work a deal that would result in a lot in an area where finished houses sell for 1.2-3 million, but it's at the top of our budget and then we worry about having to hold an empty lot for a while if it takes a long time to sell...
@Jay Hinrichs agreed regarding that it's near impossible to get logging permits in an area like that in California these days. My family has been in the logging business for 3 generations in California and I'm sure that it's gotten even more difficult since you tried 20 years ago. We have looked at a few properties in Northern California to make the timber play, but it didn't quite pencil out for us at this stage. It's great to hear from somebody who has done it successfully! Love to see the timber industry represented!
permit process in CA is simply over the top. IN Oregon the permits are over the counter they are free etc. unless you have super steep ground. what they do in Oregon is you have rules to follow.. ie stream set backs leave trees etc.. and they do an inspection after U harvest and if you violate the rules then you get fined. Washington a little tougher .. you need a licensed forester to write your logging plan.. Of course logging still happens in CA its just a long process to get your permits and can be expensive.. its like doing a development. Lots of box's to check off
@Jay Hinrichs over the counter!! That blows my mind! My dad and uncle own a logging company and they used to log a mix of private land, SPI, and Forest Service land. Now it's all SPI owned land- private timber company that runs a vertical operation where they own the land, the mills, and operate the trucks- and the only Forest Service land that is logged is the burn areas after the forest fires come through... that maybe could have been prevented or better contained if the forests were managed... but that's a whole can of worms to open. I'm sure some of the smaller companies are still doing a little private logging, but it's been years and years since we have done any.
@Michael Guydish depending on the land's location you can look into Cal Fire's grant program for fuel reduction. They distributed $200k to local programs in Santa Cruz (and much more around the state) to work on reducing wildfire risk by decreasing fuel (brush, small timber, etc). If you are looking to do brush control or anything that requires clearing the lot anyway there may be some local programs that would give you some money. Not likely to take care of the total cost, but like I said, if you are doing it anyway...
- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Kelsey T.:
@Jay Hinrichs over the counter!! That blows my mind! My dad and uncle own a logging company and they used to log a mix of private land, SPI, and Forest Service land. Now it's all SPI owned land- private timber company that runs a vertical operation where they own the land, the mills, and operate the trucks- and the only Forest Service land that is logged is the burn areas after the forest fires come through... that maybe could have been prevented or better contained if the forests were managed... but that's a whole can of worms to open. I'm sure some of the smaller companies are still doing a little private logging, but it's been years and years since we have done any.
@Michael Guydish depending on the land's location you can look into Cal Fire's grant program for fuel reduction. They distributed $200k to local programs in Santa Cruz (and much more around the state) to work on reducing wildfire risk by decreasing fuel (brush, small timber, etc). If you are looking to do brush control or anything that requires clearing the lot anyway there may be some local programs that would give you some money. Not likely to take care of the total cost, but like I said, if you are doing it anyway...
spi ( Seirra Pacific Red Emerson ) basically took control of the CA timber industry.. YUP Oregon is fill in the blanks over the counter if you have not heard back from them in 3 days your free to move in and have at it.. I loved the logging business here in Oregon when I did it.. we had a great export market for the first 2/3rds of the 90s and there was some pretty insane deals made. its tougher now of course but my old partner still makes a go of it. I brought the modern or semi modern approach to my partner.. He was the logger but we owned no equipment other than trucks and quads.. WE would buy timber deeds and if they would not sell the deed we would do a % contract but rarely.. So we paid cash before we ever went on the property.. that's where the deals were made.. then we paid all the tax's for the seller and we did all the replant.. so we took the risk on the market the scale log quality everything.. So landowners tended to go with us that for sure thing in their pocket as opposed to having to be paid after the fact. and in those days the export companies would lend us 100% of the money at NO interest to buy the timber deeds. IT was just FLAT insane how good that business was.. they no longer do that.. I did get a fairly large 7 figure line from my local bank so I could continue to buy the timber deeds.. But we never owned any logging equipment we subbed it all out.
Originally posted by @Jay Hinrichs:
Originally posted by @Kelsey T.:
@Jay Hinrichs over the counter!! That blows my mind! My dad and uncle own a logging company and they used to log a mix of private land, SPI, and Forest Service land. Now it's all SPI owned land- private timber company that runs a vertical operation where they own the land, the mills, and operate the trucks- and the only Forest Service land that is logged is the burn areas after the forest fires come through... that maybe could have been prevented or better contained if the forests were managed... but that's a whole can of worms to open. I'm sure some of the smaller companies are still doing a little private logging, but it's been years and years since we have done any.
@Michael Guydish depending on the land's location you can look into Cal Fire's grant program for fuel reduction. They distributed $200k to local programs in Santa Cruz (and much more around the state) to work on reducing wildfire risk by decreasing fuel (brush, small timber, etc). If you are looking to do brush control or anything that requires clearing the lot anyway there may be some local programs that would give you some money. Not likely to take care of the total cost, but like I said, if you are doing it anyway...
spi ( Seirra Pacific Red Emerson ) basically took control of the CA timber industry.. YUP Oregon is fill in the blanks over the counter if you have not heard back from them in 3 days your free to move in and have at it.. I loved the logging business here in Oregon when I did it.. we had a great export market for the first 2/3rds of the 90s and there was some pretty insane deals made. its tougher now of course but my old partner still makes a go of it. I brought the modern or semi modern approach to my partner.. He was the logger but we owned no equipment other than trucks and quads.. WE would buy timber deeds and if they would not sell the deed we would do a % contract but rarely.. So we paid cash before we ever went on the property.. that's where the deals were made.. then we paid all the tax's for the seller and we did all the replant.. so we took the risk on the market the scale log quality everything.. So landowners tended to go with us that for sure thing in their pocket as opposed to having to be paid after the fact. and in those days the export companies would lend us 100% of the money at NO interest to buy the timber deeds. IT was just FLAT insane how good that business was.. they no longer do that.. I did get a fairly large 7 figure line from my local bank so I could continue to buy the timber deeds.. But we never owned any logging equipment we subbed it all out.
Wow, interesting to see how different business models can be! I'm assuming that is NOT how the majority of people were doing things back then? I can see how that kind of innovation has brought you success with an industry like real estate.
- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Kelsey T.:
Originally posted by @Jay Hinrichs:
Originally posted by @Kelsey T.:
@Jay Hinrichs over the counter!! That blows my mind! My dad and uncle own a logging company and they used to log a mix of private land, SPI, and Forest Service land. Now it's all SPI owned land- private timber company that runs a vertical operation where they own the land, the mills, and operate the trucks- and the only Forest Service land that is logged is the burn areas after the forest fires come through... that maybe could have been prevented or better contained if the forests were managed... but that's a whole can of worms to open. I'm sure some of the smaller companies are still doing a little private logging, but it's been years and years since we have done any.
@Michael Guydish depending on the land's location you can look into Cal Fire's grant program for fuel reduction. They distributed $200k to local programs in Santa Cruz (and much more around the state) to work on reducing wildfire risk by decreasing fuel (brush, small timber, etc). If you are looking to do brush control or anything that requires clearing the lot anyway there may be some local programs that would give you some money. Not likely to take care of the total cost, but like I said, if you are doing it anyway...
spi ( Seirra Pacific Red Emerson ) basically took control of the CA timber industry.. YUP Oregon is fill in the blanks over the counter if you have not heard back from them in 3 days your free to move in and have at it.. I loved the logging business here in Oregon when I did it.. we had a great export market for the first 2/3rds of the 90s and there was some pretty insane deals made. its tougher now of course but my old partner still makes a go of it. I brought the modern or semi modern approach to my partner.. He was the logger but we owned no equipment other than trucks and quads.. WE would buy timber deeds and if they would not sell the deed we would do a % contract but rarely.. So we paid cash before we ever went on the property.. that's where the deals were made.. then we paid all the tax's for the seller and we did all the replant.. so we took the risk on the market the scale log quality everything.. So landowners tended to go with us that for sure thing in their pocket as opposed to having to be paid after the fact. and in those days the export companies would lend us 100% of the money at NO interest to buy the timber deeds. IT was just FLAT insane how good that business was.. they no longer do that.. I did get a fairly large 7 figure line from my local bank so I could continue to buy the timber deeds.. But we never owned any logging equipment we subbed it all out.
Wow, interesting to see how different business models can be! I'm assuming that is NOT how the majority of people were doing things back then? I can see how that kind of innovation has brought you success with an industry like real estate.
well i came from a real estate sales and marketing background and some land development. So I understood how to split parcels etc. Plus i started my sales career selling smaller ranch parcels in Lake Mendo and Sonoma counties.. so working in the woods was not knew to me Harvesting timber was.
So my logger partner when we met I asked him how he found his deals.. He said he just got up at 5 am and drove for dollars would see a stand of timber drive up the driveway etc.. I was blown away.. So lap tops had come out .. I told him we need a data base.. there was the old Metzger maps which i really like i still have the old books.. but Oregon has great aerial photog right at the county assessors offices. so i did some poking around and you could take the plat maps and put the aerials over them and see who had standing timber. so I hired a guy with a laptop and over the course of a year.. he identified every 10 acre privately owned parcel from OR/CA border to Cowlitz county WA ( Just north of Portland from the crest of the pacific range to the crest of the cascades.. took out govmit and timber companies.. then we did the reverse directory and i set up a tele marketing gig two nights a week.. This worked really well rural folks did not get telemarketed like folks in the urban cores.. So our contact and success rate was very high.. WE offered free evaluations for thinning or they could sell the land or we could buy the timber deed and clear cut. End of the day we were logging about 10 million BD FT per year on average with 3 sides in constant production. ON parcels we would buy log then develop for home sites i would do all the land use stuff for the home sites and of course handle all the resales. Mary that with instant cutting permits clear cuts up to 120 acres and heavily stocked stands .. Now we did not get the big timber like you still get in the Sierras.. you know 3 to 6 log loads our mills had already retooled for that slick 12 to 16 inch log.. over size 24 inchs and up we had to truck all the way to Roseburg.
Originally posted by @Jay Hinrichs:
Originally posted by @Kelsey T.:
Originally posted by @Jay Hinrichs:
Originally posted by @Kelsey T.:
@Jay Hinrichs over the counter!! That blows my mind! My dad and uncle own a logging company and they used to log a mix of private land, SPI, and Forest Service land. Now it's all SPI owned land- private timber company that runs a vertical operation where they own the land, the mills, and operate the trucks- and the only Forest Service land that is logged is the burn areas after the forest fires come through... that maybe could have been prevented or better contained if the forests were managed... but that's a whole can of worms to open. I'm sure some of the smaller companies are still doing a little private logging, but it's been years and years since we have done any.
@Michael Guydish depending on the land's location you can look into Cal Fire's grant program for fuel reduction. They distributed $200k to local programs in Santa Cruz (and much more around the state) to work on reducing wildfire risk by decreasing fuel (brush, small timber, etc). If you are looking to do brush control or anything that requires clearing the lot anyway there may be some local programs that would give you some money. Not likely to take care of the total cost, but like I said, if you are doing it anyway...
spi ( Seirra Pacific Red Emerson ) basically took control of the CA timber industry.. YUP Oregon is fill in the blanks over the counter if you have not heard back from them in 3 days your free to move in and have at it.. I loved the logging business here in Oregon when I did it.. we had a great export market for the first 2/3rds of the 90s and there was some pretty insane deals made. its tougher now of course but my old partner still makes a go of it. I brought the modern or semi modern approach to my partner.. He was the logger but we owned no equipment other than trucks and quads.. WE would buy timber deeds and if they would not sell the deed we would do a % contract but rarely.. So we paid cash before we ever went on the property.. that's where the deals were made.. then we paid all the tax's for the seller and we did all the replant.. so we took the risk on the market the scale log quality everything.. So landowners tended to go with us that for sure thing in their pocket as opposed to having to be paid after the fact. and in those days the export companies would lend us 100% of the money at NO interest to buy the timber deeds. IT was just FLAT insane how good that business was.. they no longer do that.. I did get a fairly large 7 figure line from my local bank so I could continue to buy the timber deeds.. But we never owned any logging equipment we subbed it all out.
Wow, interesting to see how different business models can be! I'm assuming that is NOT how the majority of people were doing things back then? I can see how that kind of innovation has brought you success with an industry like real estate.
well i came from a real estate sales and marketing background and some land development. So I understood how to split parcels etc. Plus i started my sales career selling smaller ranch parcels in Lake Mendo and Sonoma counties.. so working in the woods was not knew to me Harvesting timber was.
So my logger partner when we met I asked him how he found his deals.. He said he just got up at 5 am and drove for dollars would see a stand of timber drive up the driveway etc.. I was blown away.. So lap tops had come out .. I told him we need a data base.. there was the old Metzger maps which i really like i still have the old books.. but Oregon has great aerial photog right at the county assessors offices. so i did some poking around and you could take the plat maps and put the aerials over them and see who had standing timber. so I hired a guy with a laptop and over the course of a year.. he identified every 10 acre privately owned parcel from OR/CA border to Cowlitz county WA ( Just north of Portland from the crest of the pacific range to the crest of the cascades.. took out govmit and timber companies.. then we did the reverse directory and i set up a tele marketing gig two nights a week.. This worked really well rural folks did not get telemarketed like folks in the urban cores.. So our contact and success rate was very high.. WE offered free evaluations for thinning or they could sell the land or we could buy the timber deed and clear cut. End of the day we were logging about 10 million BD FT per year on average with 3 sides in constant production. ON parcels we would buy log then develop for home sites i would do all the land use stuff for the home sites and of course handle all the resales. Mary that with instant cutting permits clear cuts up to 120 acres and heavily stocked stands .. Now we did not get the big timber like you still get in the Sierras.. you know 3 to 6 log loads our mills had already retooled for that slick 12 to 16 inch log.. over size 24 inchs and up we had to truck all the way to Roseburg.
This right here is a lesson in business! Genius! Thanks for sharing Jay, I love hearing about logging success, but this is something else. Was there something in particular that caused you to move on from logging?
You don't see the 3 log loads as much anymore since the forest service stopped logging, but it brings a smile to my face when I do see them. We have even had a few single log loads over the years! Monsters!
- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Kelsey T.:
Originally posted by @Jay Hinrichs:
Originally posted by @Kelsey T.:
Originally posted by @Jay Hinrichs:
Originally posted by @Kelsey T.:
@Jay Hinrichs over the counter!! That blows my mind! My dad and uncle own a logging company and they used to log a mix of private land, SPI, and Forest Service land. Now it's all SPI owned land- private timber company that runs a vertical operation where they own the land, the mills, and operate the trucks- and the only Forest Service land that is logged is the burn areas after the forest fires come through... that maybe could have been prevented or better contained if the forests were managed... but that's a whole can of worms to open. I'm sure some of the smaller companies are still doing a little private logging, but it's been years and years since we have done any.
@Michael Guydish depending on the land's location you can look into Cal Fire's grant program for fuel reduction. They distributed $200k to local programs in Santa Cruz (and much more around the state) to work on reducing wildfire risk by decreasing fuel (brush, small timber, etc). If you are looking to do brush control or anything that requires clearing the lot anyway there may be some local programs that would give you some money. Not likely to take care of the total cost, but like I said, if you are doing it anyway...
spi ( Seirra Pacific Red Emerson ) basically took control of the CA timber industry.. YUP Oregon is fill in the blanks over the counter if you have not heard back from them in 3 days your free to move in and have at it.. I loved the logging business here in Oregon when I did it.. we had a great export market for the first 2/3rds of the 90s and there was some pretty insane deals made. its tougher now of course but my old partner still makes a go of it. I brought the modern or semi modern approach to my partner.. He was the logger but we owned no equipment other than trucks and quads.. WE would buy timber deeds and if they would not sell the deed we would do a % contract but rarely.. So we paid cash before we ever went on the property.. that's where the deals were made.. then we paid all the tax's for the seller and we did all the replant.. so we took the risk on the market the scale log quality everything.. So landowners tended to go with us that for sure thing in their pocket as opposed to having to be paid after the fact. and in those days the export companies would lend us 100% of the money at NO interest to buy the timber deeds. IT was just FLAT insane how good that business was.. they no longer do that.. I did get a fairly large 7 figure line from my local bank so I could continue to buy the timber deeds.. But we never owned any logging equipment we subbed it all out.
Wow, interesting to see how different business models can be! I'm assuming that is NOT how the majority of people were doing things back then? I can see how that kind of innovation has brought you success with an industry like real estate.
well i came from a real estate sales and marketing background and some land development. So I understood how to split parcels etc. Plus i started my sales career selling smaller ranch parcels in Lake Mendo and Sonoma counties.. so working in the woods was not knew to me Harvesting timber was.
So my logger partner when we met I asked him how he found his deals.. He said he just got up at 5 am and drove for dollars would see a stand of timber drive up the driveway etc.. I was blown away.. So lap tops had come out .. I told him we need a data base.. there was the old Metzger maps which i really like i still have the old books.. but Oregon has great aerial photog right at the county assessors offices. so i did some poking around and you could take the plat maps and put the aerials over them and see who had standing timber. so I hired a guy with a laptop and over the course of a year.. he identified every 10 acre privately owned parcel from OR/CA border to Cowlitz county WA ( Just north of Portland from the crest of the pacific range to the crest of the cascades.. took out govmit and timber companies.. then we did the reverse directory and i set up a tele marketing gig two nights a week.. This worked really well rural folks did not get telemarketed like folks in the urban cores.. So our contact and success rate was very high.. WE offered free evaluations for thinning or they could sell the land or we could buy the timber deed and clear cut. End of the day we were logging about 10 million BD FT per year on average with 3 sides in constant production. ON parcels we would buy log then develop for home sites i would do all the land use stuff for the home sites and of course handle all the resales. Mary that with instant cutting permits clear cuts up to 120 acres and heavily stocked stands .. Now we did not get the big timber like you still get in the Sierras.. you know 3 to 6 log loads our mills had already retooled for that slick 12 to 16 inch log.. over size 24 inchs and up we had to truck all the way to Roseburg.
This right here is a lesson in business! Genius! Thanks for sharing Jay, I love hearing about logging success, but this is something else. Was there something in particular that caused you to move on from logging?
You don't see the 3 log loads as much anymore since the forest service stopped logging, but it brings a smile to my face when I do see them. We have even had a few single log loads over the years! Monsters!
yes for us the export market died so log prices came down to domestic prices and profits went with it.. still viable of course for long term hold. we bought a 700 acre tree farm in 2000 that I was able to split the front 100 acres into 10 lots that just about paid for the whole mary ann. It was well stocked 35 to 50 year old doug fir in number one growing site.. sold it to Stimson lumber in 2017 for many millions.. :) those trees were now 52 to 75 years old and just coming into production.. plus we thinned it annually and pulled maybe 30 to 50k off it a year net. And we sold water rights to the Yamhill river down stream to a big nursery company.. so it was all in all a very good play.. plus we got to hunt on it and just enjoy it as a ranch.
- UT · Member since 2014 · 14 posts · 4 votes6y
@Jay Hinrichs Amazing, thanks for sharing. What years was this?
- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @David Wilk:
@Jay Hinrichs Amazing, thanks for sharing. What years was this?
I started logging in 92 ended in 2000.. bought tree farm in 2000 for long term project and hold.. turned out to be a big winner. Tree farm was just 2 miles north of Willamina OR. our long term land plays now are prime properties on the border of the UGB in Washington county. And I had one in Rohnert Park CA that I just closed on in Jan.. I bought that bare land in 95 for 27k and sold in Jan for 1.9million to a developer.. its across the street from the Graton Casino.. it was unbuildable when I bought it that's why it was so cheap but Path of progress caught up to us.. I suspect if I had bought apple or google then we would have made the same money.
- UT · Member since 2014 · 14 posts · 4 votes6y
@Jay Hinrichs Very cool. Thanks so much for sharing. Perhaps we'll cross paths at a NWReia if you ever make it to those. I just started coming to them this year. Thanks again!
- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @David Wilk:
@Jay Hinrichs Very cool. Thanks so much for sharing. Perhaps we'll cross paths at a NWReia if you ever make it to those. I just started coming to them this year. Thanks again!
I go to Mike Nuss's rarebird events once or twice a year when he invites me to speak.. I have never been to the NW REIA will have to check it out when we come back to Oregon for the summer. If you poke around looking at Timber ground feel free to ping me..
Originally posted by @Jay Hinrichs:
Originally posted by @David Wilk:
@Jay Hinrichs Amazing, thanks for sharing. What years was this?
I started logging in 92 ended in 2000.. bought tree farm in 2000 for long term project and hold.. turned out to be a big winner. Tree farm was just 2 miles north of Willamina OR. our long term land plays now are prime properties on the border of the UGB in Washington county. And I had one in Rohnert Park CA that I just closed on in Jan.. I bought that bare land in 95 for 27k and sold in Jan for 1.9million to a developer.. its across the street from the Graton Casino.. it was unbuildable when I bought it that's why it was so cheap but Path of progress caught up to us.. I suspect if I had bought apple or google then we would have made the same money.
Jay those are great land deal stories. You crushed it. Apple in 1995 was in the dumps and no Steve Jobs back yet. 1996 he came back to save apple. A few stocks splits later and add 25 years that $27k is 32 mil today.
This eventually became the worlds most valuable company with Jobs back at that helm. Who knew, as they were down for the count in 95. You absolutely killed it anyways and sounds like the adventure was priceless. These are great stories.- 6yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Matt R.:
Originally posted by @Jay Hinrichs:
Originally posted by @David Wilk:
@Jay Hinrichs Amazing, thanks for sharing. What years was this?
I started logging in 92 ended in 2000.. bought tree farm in 2000 for long term project and hold.. turned out to be a big winner. Tree farm was just 2 miles north of Willamina OR. our long term land plays now are prime properties on the border of the UGB in Washington county. And I had one in Rohnert Park CA that I just closed on in Jan.. I bought that bare land in 95 for 27k and sold in Jan for 1.9million to a developer.. its across the street from the Graton Casino.. it was unbuildable when I bought it that's why it was so cheap but Path of progress caught up to us.. I suspect if I had bought apple or google then we would have made the same money.
Jay those are great land deal stories. You crushed it. Apple in 1995 was in the dumps and no Steve Jobs back yet. 1996 he came back to save apple. A few stocks splits later and add 25 years that $27k is 32 mil today.
This eventually became the worlds most valuable company with Jobs back at that helm. Who knew, as they were down for the count in 95. You absolutely killed it anyways and sounds like the adventure was priceless. These are great stories.OH you just ruined my day.. for a short time I was in the Office building in Los Altos were Next computer was and would see jobs brown Benz in the handicap space LOL
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