timber trade

[dirty]

so i was minding my own business as always . this guy pulls up in my drive and introduces himself. his a forester for the a small local mill, a mile and a half from my house.

they would like to trade the 80 acres north of me for 20-30 acres of my timber.

they purchased the 80 acres a couple of years ago, clearcut it and now want to get rid of it. the property is land locked. so they pretty much only have a few people to sell to without purchasing an easement.

i told him i'd think about it. and that i'd have to call him after deer firearms season was over. so i could walk their 80 to see what i was trading for. noway i want to be wandering around on a strange property with all these gun toting southerns running around . they usual are all gone after the second weekend of firearms season.

that has bought me some time to think about it. and to do some research. i won't know until i walk it how interested i'll be. but it's fun to think about.

i already found out that i can't trade straight up for the property without paying taxes on the sale of my timber.

anybody here ever sell timber off their property? please keep the horror stories to a minimum. i'd really just like a heads up on anything you learned.

or as usual if anybody just wants to chime in thoughts welcome.

[momo]

It sounds good..20 acres turned into 80.

BUT..I would really check out the tax implications. I'm sure Alabama law is nothing like your state law. I know timber here is a great business.

What would you want to do with all that land? Plant trees..farm?

[dirty]

momo said:

What would you want to do with all that land? Plant trees..farm?

i'm not really sure. i'd definitely replant the timber they take off my property. but i'll have to get a good look at what's on the adjacent lot.

[kyosa]

Lemme see if I've got this right..... YOU get the eighty acres they've harvested the timber from. Yours free and clear. THEY get the timber from 20 - 30 acres of your land, but YOU retain ownership of the land, THEY'RE taking the timber only. Is that right?

Assuming the above is correct, I'd think it's a proposal that merits serious consideration. Questions to consider could include, A) What is the lay of the land? Flat? Rolling? Mountains? Which directly concerns... B) This company's harvesting methods and practices - there's 'harvesting timber', and then there's 'raping the land'. Look at the land they've harvested and see which philosophy they follow. If they're of the 'rape the land' school and your prospective timberland is hilly or mountainous you could be in for severe erosion or other environmental consequences. If they aren't environmentally conscious, perhaps you could bind them to some agreement about how your land is to be treated during their timbering operations that would ensure you wouldn't be left with a denuded wasteland after their operation was complete. If the environmental concerns and, as others have pointed out, factors like tax issues have been considered it may be a good way to add considerably to your land holdings.

I'd think it wise to consult with a lawyer who is knowledgeable about transactions like this to keep everything clear and aboveboard.

[angiem2]

dirty -
sancraft over at HT has sold selected trees off her 20 acres for cash, and is about to have most of the tall pines cut for a decent amount of cash. She's keeping some of the good hardwoods for herself.

I think it will be considered income, but depending on how low your income already is - it might not hurt too much.

But, I sure would check out the 80 and make arrangements YOU could live with about the cutting of the trees they are interested in. Are they by chance from the big KC Plant outside Munising? I remember from when I lived there.

Also, I remember some great wild low bush blueberries in an old clear cut patch up there.

Angie

[bbird]

I think Kyosa has great advice. I'll just add my wisdumb (teehee)...Twice a year the US forestry service sells saplings of specific trees to the public. Its usually not advertised, but a phone call would get you the time and place they do this near you. You can get 500 trees for about $50-75 dollars depending on the type. Around here there are guys you can hire who will plant the trees for 10 cents each too.

[dirty]

kyosanim said:

Lemme see if I've got this right..... YOU get the eighty acres they've harvested the timber from. Yours free and clear. THEY get the timber from 20 - 30 acres of your land, but YOU retain ownership of the land, THEY'RE taking the timber only. Is that right?

yea thats what i was trying to say. only you did a better job of it. what you wrote should have been my post.

Assuming the above is correct, I'd think it's a proposal that merits serious consideration. Questions to consider could include, A) What is the lay of the land? Flat? Rolling? Mountains? Which directly concerns... B) This company's harvesting methods and practices - there's 'harvesting timber', and then there's 'raping the land'. Look at the land they've harvested and see which philosophy they follow. If they're of the 'rape the land' school and your prospective timberland is hilly or mountainous you could be in for severe erosion or other environmental consequences. If they aren't environmentally conscious, perhaps you could bind them to some agreement about how your land is to be treated during their timbering operations that would ensure you wouldn't be left with a denuded wasteland after their operation was complete. If the environmental concerns and, as others have pointed out, factors like tax issues have been considered it may be a good way to add considerably to your land holdings.

I'd think it wise to consult with a lawyer who is knowledgeable about transactions like this to keep everything clear and aboveboard.

actually the taxes won't be to bad. i think i only have to pay capital gains on the value of the timber, and my basis price is the value of the timber on the day i purchased the property. just over a year ago. not to worry the IRS will correct me if i'm wrong.

i think the two biggest costs for me would be hiring my own forester, to watch over them. a common practice around here. and the combining of the land on to one deed, because i own my present property outright. the taxes will be much lower on one big property that i live on than two separate properties, living on just one of them.

lots to think about.

[dirty]

mljjranch said:

I think Kyosa has great advice. I'll just add my wisdumb (teehee)...Twice a year the US forestry service sells saplings of specific trees to the public. Its usually not advertised, but a phone call would get you the time and place they do this near you. You can get 500 trees for about $50-75 dollars depending on the type. Around here there are guys you can hire who will plant the trees for 10 cents each too.

yes the local county conservation district is in charge of the sale around here. i'm on their mailing list. last year i only wanted 20 or so trees. but i was too embarrassed :-[to put in such a small order.

[Deleted]

Ok, I am going to speak my piece here...as it might just save you lots of heartaches later on. I used to be married to a logger....I learned first hand what really goes on there....like I said, 'used to be married'...LOL

Well, first of all, get a 'licensed timer buyer' to take a look at your trees FIRST! The value of 'veneer logs' is through the roof and there is a very big demand for them; mostly in other countries. Veneer logs are worth thousands of dollars, so they are not to be confused with the regular logs that the portable mill loggers saw boards and pallet lumber from. Be aware that the same locals who own these portable mills also SELL VENEER LOGS to the big buyers, so just because they are running a small local mill does not mean they are not going to sell the logs to someone else for a HUGE PROFIT; that you would be paying the taxes on...this can and usually is the case when they make offers like the one made to you...you can end up in debt and not come out ahead, even if you do end up with the larger acreage. I seen it happen time and time again....in this state and in others.

Another thing, is that those skidders they use them to drag out the trees with cables around the logs....they make a real mess of things and in a hurry. Are you prepared to see good seed stock trees and saplings dragged down into nothing? Or watch as they drop the trees they want to harvest logs from on top of the smaller trees damaging them enough they will soon be filled with disease and insects? not to mention the trucks and loaders they use to get out those valuable logs.....it all takes a major toll on the land and that includes the roads in and out of the timber. It takes years and years for this damage to heal and sometimes it does not heal well at all.

Even the best loggers (hah!) cause damage to the land and trees left behind...it is just a fact of the logging industry. This applies to any place and any time. I have worked in the timber myself and seen first hand what happens...I seen land owners break down and cry at the mess left behind...and after paying the taxes on veneer logs....

I am not sure how many board feet you are talking about here, but I am sure that they see a way to make a great profit and they might not have paid the back taxes on the clear cut area they want to trade to you.

When the taller and older trees are harvested for logs, the lower growing trees left behind are usually taller and spindly....high winds, storms, snow and ice will take their tolls on the spindly trees left behind; you are sure to loose many of them within the first year after the timber is cut. They nolonger have the protection of the taller and older trees that were cut down and harvested for logs...there are so many factors to think about before letting the loggers in...I would most likely runaway from them myself....I like my trees and I know what happens when loggers get an upper hand...supervised or not, they do what they want and leave the messes behind.

If you buy clear cut property, it is soon to grow up into a bushy mess....you need to reclaim the land as soon as possible to prevent the overgrowth from making it worse...plus, you cannot farm it or make a decent pasture out of it, for all of the downed tree tops and the big stumps left behind. It takes a lot of money, work and time to get the stumps bulldozed out and the land tillable for farming or pasture.

I have loggers wanting to buy the trees on my land...it will never happen as long as I own it or any timbered land. Trees make wonderful windbreaks, are beautiful to look at and give homes to wildlife....they also offer us shade and give off oxygen....once cut and gone, it takes about a lifetime for us anyways to get a good stand of timber again. Oh, the termites just love the clearcut land, as they have a great supply of wood in those roots and stumps! So do not plan on building any wooden structures on the land unless you treat for termites.

[Deleted]

What did you find out/decide, Dirty?

Kaza

[dirty]

the logging company forester is coming out this friday. we are going to walk my property. then i'll most likely have to decide. because the step after that is going to be me paying another forester to come out and give me an approximate value of the trees forester #1 wants to take down.

me i go back and forth with the idea every other day or so.

[skookum]

Pay close attention to what the 'second' forester has to say. We call it 'timber cruising' out here. Check for peculiar fees from state/county/enviro outfits. One thing to consider-how are they hauling the logs out- Your driveway/lane? If so, make sure there is a stipulation that it be returned to as found condition when they are done-log trucks can destroy a road in short order.

[dirty]

met with forester #1. the short of it - no trade.

i was very impressed by this guy. i got the feeling right away that he was an honest guy, very professional.

we spent some time walking the property. he said that the value was here. but he couldn't recommend it and wouldn't do it unless i insisted. he explain that he couldn't get the value and do sound woodlot management at this time.

he also explained to me the phrase "jumping product". what this means is that i have a large stand of maple. if they where to take them now most would end up saw logs. if i give them 5-10 more years i would end up with a majority of them growing to veneer size trees. they are close to "jumping product". he felt that being this close to that type of situation financially it would make no sense to cut them now. i don't remember the exact figure that he used. the veneer trees are worth something like 40xs what a saw log is worth.