Verifying the claims of sellers and estimating future cash flows are essential aspects of buying land well. Reducing uncertainty is the basis of a successful investment and provides buyers with greater confidence.
How do I verify a seller's timber inventory claims and predict future cash flows?
We may verify a seller's inventory by revisiting their inventory plots, though we may recruise a property to independently calculate timber volumes.
Can I pay for land by cutting its timber?
Occassionally. Buyers generally recoup their initial investment and profit at the end of their ownership tenure. However, timber sale income may cover operating costs, capital improvements, and more.
Is there a minimum of timber required for land to be a good investment?
No. You only need to sell timber land for more than you invested in it. You may profit by growing the timber, and thus selling more than you bought. You may profit more by growing timber into larger product classes, and thus selling more than you bought and at a higher product price.
How much does due-diligence service cost?
Do not spend more than necessary to achieve your risk tolerance. A simple walk-through and boundary reconnaissance may be sufficient on small lots, though on larger tracts we generally recommend quantitative sampling to review inventories and predict cash flows.
"I've bought a lot of land over the years and Harold has helped me know when to buy and when not to. I wouldn't do it until my forester looked at it."