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

BUY Land with a PARTNER or go it ALONE?

I recently participated in a LandThink survey. LandThink brings together the various components of the land industry and provides land investing knowledge, ideas and networking opportunities to land professionals and investors to create a stronger land marketplace.

The survey question ask….. “Would you prefer to own a large tract of land with a partner or a small tract without a partner”? Here are the results…

Overwhelmingly the majority of the respondents (76.37%) answered they would prefer to own a tract without a partner. Although there are some advantages to having a partner i.e. leverage larger purchases, the disadvantages outweigh the benefits. Case in point, I was recently contacted by a landowner who owns over 200 acres with a partner. The landowner was over 70 years of age and is simply not using the property any longer and he is tired of paying taxes. He and the partner have owned the property for over 20 years. They bought the property for recreational purposes and the entire family has enjoyed using the property but no longer, the kids are grown and gone. When he contacted the partner, he said he was not ready to sell. Typically the differences involve: 1) different strategies and goals and 2) time horizons differ among owners.

IF YOU GOING TO BUY A TRACT OF LAND…”BUY IT YOURSELF”!

If you want to see my listings, visit AllSouthLandandHomes.com. If you have questions buying or selling LAND, contact G. Kent Morris, ALC, RF at 706.457.0090

8 Things You Should Know When Buying Vacant Land or Lot!

I sell a lot of vacant land and there are things you need to know. Hopefully this will prepare you for your purchase of land. This is not a comprehensive list but this will help aide your decision!!

1.   Location – The old adage location, location, location has been worn out. But wait, we’re talking about YOUR money. You might be buying that tract of land to retire on but plans can change. You have to be cognizant of the fact that you might have to resale. Value and demand are primarily determined by location.

2. Utilities – What utilities are already available. You will need water, sewer (or stepic tank) and electricity. If these are not in place, talk to the right people and get estimates to have them provided. 

3.   Cost – There are other cost associated with buying property other than the purchase price. These might include closing cost, title insurance, surveying etc.

4.  Zoning – Make sure your intended use is compatible with current zoning regulation. You don’t want to buy a tract of land with the idea of raising cows or horses if that is not a permitted use. Of course you may apply for a zoning variance, but this can be expensive and time consuming.

5.   Covenants – This primarily applies to lots in a subdivision. Be advised there could be ‘Home Owners Association’ dues. The covenants are there to protect you and the neighbors. Just  make sure that the size house and the architecture of your home is compatible with the covenants and restrictions in the neighborhood. 

6.  Access – Very important topic. You may be buying property on a public road but there could be cost associated with putting in a driveway. Some property is accessed by easement. You need to know: 1) width of the easement 2) are there use limitations such as hauling timber out and 3) who can use the easement, are there other neighbors who need the easement for their access.

7.   Property Lines – Can you find the property lines? Is there was a recent survey. Property line (or boundary line maintenance) is so important. It can prevent people from using (or hunting) your property and help deter ‘adverse possession’ claims.

8.   Flooding – Is any part of the property in a flood zone. This is not all bad as these areas are great for maybe a pond or lake. In addition these areas provide a lot of habitat diversity for wildlife and may even create some good duck hunting. These areas are not suitable for a house and will not pass a soils test for a septic tank. There are 100 year flood maps available for your review at

https://msc.fema.gov/portal

 To view my listings visit AllSouthLandandHomes.com Buying or selling land? contact G. Kent Morris,  ALC,  RF  at  (706) 457-0090

Why I LOVE Real Estate!

     1. It’s a People Business - You meet some very interesting people with varied backgrounds, interest, education etc. I have learned so much conversing with sellers, buyers and other Land Brokers. Hopefully my passion  about LAND is transmitted to a potential sellers or buyers. The Real Estate business is all about 'people'.

     2.  Helping People – This is huge! There can be many pitfalls along the way and if you are not careful, mistakes can be made. I am a ‘Registered Forester’ and an ‘Accredited Land Consultant’ with over 3 decades of experience related to land management, real estate and forestry. I decided to use that experience and knowledge and help clients navigate through the decision process. Investing in LAND is a huge business decision so you need competent people on your team.  Often clients need help with:

A.    Zoning – What are the permitted uses?

B.    Ponds – Is the property suitable for a pond or lake?

C.   Timber Estimates.

D.   Cost Allocation – Allocating cost between the bare land and the timber.

E.    Soil Maps
F. Flood Maps

I can help with these and other topics of concern!

 3. I Love LAND – This career allows me to visit some beautiful land and see  some special places. I am very fortunate to do something I love!

If you would like to see my listings, visit AllSouthLandandHomes.com  If you have questions about buying or selling LAND, contact G. Kent Morris, RF, ALC @ 706.457.0090

Why You Should Invest in Real Estate?

Disclaimer – I am not licensed or certified to make investment recommendations. At the time of this posting, August 24 the DOW futures are down about 700 points. The Dow fell 3.12% on Friday, August 22. Therefore I decided to expound on ‘Investing’. I read something many years ago that has shaped my investing philosophy….. Ecclesiastes 11:2  Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.

I believe it is prudent to diversify when investing and ‘yes’ I believe a portion of your portfolio should be in real estate. By real estate, I mean income producing  (rentals or leases) and LAND. Your LAND investment should also be income producing. This could be crop land, pasture land or timberland. Crop land produces income through farm rents and Timberland produces income through hunting leases and periodic thinnings and harvesting. I do not consider the home an investment, why you ask? Even though banks and others do, everyone needs a roof and a bed and unless you are willing to sell and move into a tent, that investment may never be available for other expenditures and cost of living. I would also add that by the time you add your principal and interest payments over a long period of time then sell your house you probably didn't make a much money as you think.

So how should we invest? Following is a chart that provides lots of diversity and while the market recently took a big hit, remember GOLD rose 6.82% over the last 30 days and SILVER rose 5.69% The point being that when one asset class declines in value others in your portfolio may go up.

Remember to invest wisely and above all…Diversify!

To view my listing visit AllSouthLandandHomes.com  If you have questions about buying or selling LAND contact G. Kent Morris, ALC, RF @ 706.457.0090

Who Should You Hire When Selling LAND?

I was talking to a fellow Land Broker the other day and he mentioned he had run across a listing and was actually angry 'for' the seller. The listing broker had written up a one sentence description and posted one picture on the property. He felt so bad for the seller. I have run into similar situations and thought this worthy of posting. So Mr. Landowner, what do you need to know? I’ll tell you!!!!

1. Tools – The Broker should incorporate aerial photography and topographic maps into the listing. The land specialist can provide acre calculation on fields, orchards, ponds and lakes. This is important information the buyer will need when purchasing property.

2. Transportation - If the broker shows up in a car or minivan you had better run. When showing land and farms you will need a 4x4 or UTV vehicle. Many areas are inaccessible with out these vehicles.

3. Interview – Very important! Make sure your broker has a working knowledge of timber, crops, soils, ranches or whatever type real estate you are selling. Ask the broker why they think they are qualified to sell your property. Ask what they can do or services they provide that sets them apart from others.

4. Advertising & Websites – Many times the buyer starts their search on the internet. Make sure the broker has adequate exposure here including a nice looking website that is easy to navigate through. There are several major rural land websites. Make sure the broker is advertising on at least one!!!!

5. Navigation Skills – If the broker can not locate your property or needs you to show them around, that could be a red flag. Eventually the broker will have to show a buyer around the property and you do not want them getting lost! The broker should have tools that allow them to navigate the property such as a smart phone or tablet.

6. Designations - Does the Broker have designations or training that uniquely qualifies him/her to list and market your property?

The National Association of Realtors®  Code of Ethics Article 11
 states….The services which REALTORS® provide to their clients and customers shall conform to the standards of practice and competence which are reasonably expected in the specific real estate disciplines in which they engage; specifically, residential real estate brokerage, real property management, commercial and industrial real estate brokerage, land brokerage, real estate appraisal, real estate counseling, real estate syndication, real estate auction, and international real estate.

REALTORS® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence unless they engage the assistance of one who is competent on such types of property or service, or unless the facts are fully disclosed to the client. 

We have a fiduciary responsibility to you the client. In summary, if you are offering a triple net lease 50,000 sq. ft. warehouse in Atlanta, GA  I am NOT your man. If are selling a ski-in ski-out vacation home in Vail, Colorado I am NOT your man. Find someone in your area that specializes in your type real estate and put them to work.

To view my listings, visit AllSouthlandandHomes.com.  If you have questions about buying or selling Land, contact G. Kent Morris, ALC, RF @ 706.457.0090