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Log value vs Land value

Started by terry f, May 24, 2012, 11:41:31 AM

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terry f

     I asked this on another thread, but I don't want to hi-jack his, so I thought I'd start my own. If a guy (younger than me and with a better back) started out with 40 acres of average land, skidder, and selfloading truck all paid for, could he make enough from the original 40 to pay for a new 40. If land values are 1500 per acre, could you make 1500 in logs, firewood, and thinning costshare. I'm not saying to quit your day job, that pays your bills, but evenings and weekends. Seems to me he could snowball this into a fairly large land ownership over a lifetime, if he didn't sell the realestate, to pay for the next one. I also say this, not knowing how much work is involved, in a one man logging operation.

Bobus2003

I'd say its possible, But it would also come down to the Log Market, Timber Species, Timber Quality & Quantity

SamB

I've seen land bought timbered and sold for a profit many times in my area, it can be done, you just have to make smart purchases and have your ducks in line.  :)

terry f

    SamB, I'm talking about keeping the land. I know in the long run, the money will be made on the real estate side of it.

SamB

I forgot to say the timber sell off exceeded the purchase price of the land and when the land was sold as a short term investment it sold for more than the original purchase price. So IMO your plan could work in some real-estate deals.

Ianab

If one were smart, lucky and hard working I would think it''s possible to come out ahead, especially if you aren't expecting to take a lot of cash income from the enterprise.

A lot of work logging your own land, and some equipment needed.  If it was easy everyone would be doing it, but that doesn't make it impossible...

Ian
Weekend warrior, Peterson JP test pilot, Dolmar 7900 and Stihl MS310 saws and  the usual collection of power tools :)

Ron Wenrich

1500 per acre and timber at 400/Mbf would make it in about 5 Mbf and pay for the logging costs.  Very possible.  But, it can't be a bunch of small timber or pulpwood. 

We had a guy donate 80 acres of prime cherry to the state to be used for a park.  The timber was valued at $1 million.  It was very nice timber and sold when cherry prices were high. 
Never under estimate the power of stupid people in large groups.

Silver_Eagle

Terry, back in the day when I started my own logging operation's in Oregon. I bought multiple properties like how you describe. I had cut, run equipment, pulled line, hooked tended so was very familiar with the operational side on how to produce but didn't have my own equipment yet. I had been cutting by the thousand in the winter's when we got snowed out at home in Alaska so could pretty well cruise a piece of land as well.

Keep in mind this was 20+ years ago when land in your part of the country was about 500.00 bucks per acre top's though. What I did my first year was I cut all the properties myself, had Jack Baremore logging skid and load the timber and my dads trucks haul it. It was cat ground, Jack did the loading for 12 bucks per thousand and skidding for 15 usually back then. I almost always paid for the ground and had good profits to put back for my cap ex on my equipment the next year when I started buying my own iron. The trick I found was obviously price per acre, timber per acre and sale price at the mill deld.

I would then go in and clean the property up, build some nice roads, sometimes ponds, grass seed and fence etc. The land value I found was usually worth more after than before. I was very selective on the tract's though Terry, I had to be though, couldn't afford to make a mistake. I alway's did selective cuts on so piece would be left with ample timber for a good look when done as well.

Those where the days, I sure miss being at home Terry, your a lucky man to be in that area.   

sparky1

1500 an acre?? land value around here is going anywhere from 3,000 and thats really low. Theres some properties around here that sold for 7500 an acre. I wish I could find land for 1500!!
Shaun J

Silver_Eagle

I agree, we should have loaded up back in the day. Here in East Texas 3-4 grand is about the going rate.   

chevytaHOE5674

Can pick up land around here for roughly 1k an acre, but at that price the timber is usually junk or all pulpwood. Good land with valuable saw timber is harder to find and it usually isn't nearly is affordable.

terry f

   I just threw the 1500 number out there, thats what I paid 7 years ago, but you could use any number. Silver_Eagle, over the years I've passed up, or missed out, on what I would call great deals now. I called on a log cabin with 20 acres on Mt. Fanny, out of Cove, (I'm sure you know where that is) a couple weeks ago, the older sounding lady said it sold right away. I said a one man operation, but I don't know how long it would take one person to log a 40 by himself, or if it could be done.

bill m

$1500 per acre, I wish! Around here woodland starts at about $10,000 per acre and that would be mostly wetlands. Good timber land is closer to $20,000 and up.
NH tc55da Metavic 4x4 trailer Stihl and Husky saws

Silver_Eagle

Yes Terry, Mt. Fanny is a gorgeous spot, if you ever feel like seeing the valley lights, go through Cove and follow up past the swimming pool sign, follow up past the ol water mill, that road takes you clear up on top. Once you break up on the flat on top, there is a monster rock bluff over hang to your left, you will see it, you can see, cove, lagrande, imbler, elgin, union and some of baker from up there at night. Cool spot.

You can log them by yourself for sure. I logged a 60 + acre piece one winter in Halfway alone. The snow was deep but used a ol 7, I cut and skid and hired the Bob way to come over and load and haul that job. I would deck all week and he came in on Friday's and cleaned me up. Bill Gardner out of Lagrande, he was 74 when I was in my early 20's. He skid for my grand dad, worked around my dad, he was a truly great guy rest his soul. He worked alone alot later in his life. He used to work me in the dirt keeping up with him and he was 50 years older than I was lol. Tough, tough ol bird for sure but I sure did learn alot from him. Roy Way still loads and hauls Dad told me a few months back for small jobs. He lives near summerville. If you found a track I'm sure you could hook him up to atleast load and haul it for you. I still know alot of those guys there, if you need some names to call on, let me know. I would be glad to share. Roger Goodman at Century 21 there in Lagrande knows the game, he might be a good source to call to look for you as well. His daughter was about 4-5 years behind me in school, he has been there a long time, knows the area well.     

Ianab

We have a local retired couple that have basically a 1,000 acre "tree farm". Much of it is old growth forest, never been cut, or regenerating from old pasture, which wont have much harvestable timber for a couple of hundred years.

Logging on this sort of ground is strictly regulated, even if it's privately owned. A sustainable forest plan might be less than 1% harvested per year. But if that's trees that are worth 10-20,000$ (plus) PER TREE it can be economic.

His harvest method is per tree, building a track in to an individual tree with a small bulldozer, just enough to get his Lucas mill to the log with a quad bike. The log is sawn and then the boards lifted out in bundles by a local helicopter pilot. Cheaper and easier than trying to drag them out over 10 miles of dirt tracks. This is one older guy, and his wife (who runs the mill). They may only harvest 3 or 4 trees a year to make a living.

Now what sort of operation you can set up on your patch of land is going to depend on the terrain, type of trees, local markets etc. You probably wont find land with 800 year old Rimu trees... But can you work away by yourself on weekends with a 4WD tractor, winch and log arch to stage up a truck load of logs in a month? Probably...
Firewood sales from the lower grade trees that you remove to improve the forest?
Rent the cabin out as a holiday home?
Value added my sawing the wood and selling finished products?

Just looking at the ways you could earn income off the land, and put that towards your next piece of land.

Ian
Weekend warrior, Peterson JP test pilot, Dolmar 7900 and Stihl MS310 saws and  the usual collection of power tools :)

Silver_Eagle

Terry, Ianab brings up some good point's. With the nice red fir in your area, most of the lumber yards (Bronson's my brothers yards)  and builders like WC construction, have to order their beams from out of area now where most of those mills are shut down. You might look into finding some good red fir stumpage to buy, get a mill and custom cut package for those guys. To my knowledge there is not a portable in the area, keep in mind I don't keep real close tabs on home now but would be easy to find out. Back in the day when Peacock mill was open outside Island city, they sawed a huge amount of green red fir (douglas fir) 2 by and beams for everyone. 

Just a thought.........

terry f

     Ianab, I read that timbergreen farm site you posted, they have it down on how to get the value out of your woods. Silver_Eagle, I don't think there are too many portable mills around here. Bronsons is a good store, they wrote up some cabin plans for me a few years ago. Someday.

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