How Do I Finance That Tract of Land?

Many people recognize the importance of diversifying their investment portfolio and that may mean investing in some land (timberland, recreational, agricultural or maybe that old farm you would like to retire to).  You may have the cash or maybe you need some financing. A lot of the conventional banks just don’t like financing LAND!  There are banks out there that that finance LAND and most are members of the Farm Credit system. These were previously referred to the Federal Land Banks. 

Every loan is different and the specifics depend on your credit history. Generally on smaller loans they generally require a 15% down payment and will usually finance the property for 15 years. For larger loans, usually over $200,000 they require a larger down payment but may extend the term to 20 years. One interesting thing about these loans, they have a +-20 year history of rebating +-25% of the interest paid in the form of a dividend check each year which reduces your effective interest rate (No guarantees but a good track record).

Also as you can see from the above map, the Farm Credit banks work different counties so it is impotant to contact the bank that provides financing in that county.

To see my listings visit AllSouthLandandHomes.com Buying or Selling LAND? Contact G. Kent Morris, ALC, RF  @706.457.0090

When To Thin...How To Thin!

I was on my way to the courthouse and saw something very interesting and thought it worthy of a blog post!  Many people wonder, when should I thin, how should I thin and the list goes on and on. Let’s begin by defining Live Crown Ration. Live Crown ration is a number representing the % of the total tree height represented by branches, leaves and needle. You see the branches and needles are where photosynthesis takes place, converting sunlight, water and nutrients into food for the tree. I look at it like the engine that supports the tree.  Supposedly you would like about 33% in the live crown ration and you should not let the ratio get below 25%. I have had some success thinning stands with live crown ration slightly below 25%, but that is not recommended. Let’s look at some pictures to help illustrate the topic.

Healthy Stand 1

Healthy Stand 2

All these pictures were taken of the same stand, planted at the same time and separated by a fence (2 landowners).The pictures were taken of planted pines approximately 24 years of age, but there are some startling differences. The pictures above show a healthy stand of trees. These trees were approximately 1 ½ - 2 inches larger than the stand in the bottom 2 pictures. Diameter equates to money because diameter determines the product i.e. pulpwood, chip-n-saw and sawtimber. These trees were thinned about 7 years ago and honestly could be thinned again soon…..”that’s more money”!! If you are interested in reading about thinning revenue, see my older blog post.

What Do I Need To Know About Thinning My Timber

Unhealthy Stand 1

Unhealthy Stand 2

In the above 2 pictures you begin to see some real problems. In one picture you see a lot of dead debris and trees on the ground. The ecosystem can only support so many trees so the weaker trees die and that’s lost revenue in your pocket! In the other picture you can see the small crowns or tops. The problem here, the trees simply won’t respond to the thinning. There is not enough limbs and needles for food production to jump start the tree. This landowner waited too long. An observant Forester would have recommended clearcutting the stand and starting over again. Trees won’t respond to a thinning if the crowns are too small.

“If you are going to do it….do it right”.

To see my listings visit AllSouthlandandHomes.com Buying or Selling land? Contact G. Kent Morris, RF, ALC  at 706.457.0090