# Logging Question



## Matthew Jaynes (Jan 26, 2016)

Im looking to maybe purchase 13.2 acres that has what looks to be a reusable logging lot because of all the Pine trees are in rows and the logging trails. if I were to purchase this land for residential purposes and have a logging company come and Clear cut 90% of that. would I make a good profit off of the trees to perhaps offset the price of the land and house installation ?


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## woodtickgreg (Jan 26, 2016)

I would think so, depends on the size of the trees and market value at the time of harvest.


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## Matthew Jaynes (Jan 26, 2016)

I don't know to much about the land yet. im waiting for my agent to get back to me. I don't know if the land was private owned or belonged to a logging company. or if they clear cut the entire property before putting up for sale. if it was private owned and the grow is 10 years or more I think I might be in good shape to get it I just don't know how logging like that works or how they pay or what.


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## Nature Man (Jan 26, 2016)

Recommend you hire a registered forester to do an evaluation. Transportation costs can eat up all of your "profit." Timber prices are up from a couple years ago, but short of the highs from years back. Also keep in mind that this would be considered by the IRS as investment property, even in the event you had intentions of building a home on it. Chuck

Reactions: Thank You! 1 | Agree 2


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## barry richardson (Jan 26, 2016)

Chuck makes some good points. My question would be, if it was profitable to log, why didn't the current owner do it?


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## Matthew Jaynes (Jan 26, 2016)

there are 2 local logging companies less than 10 miles from that location. thanks for the info on a registered Forester and IRS stuff >.< damn IRS


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## Matthew Jaynes (Jan 26, 2016)

@barry richardson i have been asking myself that same question and if you look at the photo and section on land being sold is only a small portion of what looks like a bigger tract. ill know more about the place once my agent does some digging :P


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## Kevin (Jan 26, 2016)

barry richardson said:


> Chuck makes some good points. My question would be, if it was profitable to log, why didn't the current owner do it?



Because not everyone wants to live on the moon lol. Seriously, if we buy another place I would never clear cut it. I harvest trees sustainably but clear cutting is not my bag. I like treed property much more than open ground, unless I was a rancher or farmer I wouldn't touch them except to thin them according to a forestery plan per a forester.

Chuck is correct Matthew you wouldn't want to do anything without getting a forester in there. As per the IRS rule check with an accountant - after a certain amount of time passes from when you buy it, it is no longer considered investment property if you are developing it and haven't taken any timber. 2 years? 5? I don't know.

Reactions: Agree 2


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## Nature Man (Jan 26, 2016)

As a further follow up point, if your intention is to grow timber on the property in the future, you can fall under farming rules which opens up a whole different ball game with the IRS. Guess I'm suggesting that you do some up-front investigatory work before you jump in and buy the land with the thoughts of making $$$. I know a bit about it because I own a 17-acre forested parcel and I've discovered a whole bunch of pitfalls in the process. Chuck

Reactions: Agree 1


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## JR Custom Calls (Jan 26, 2016)

Nature Man said:


> As a further follow up point, if your intention is to grow timber on the property in the future, you can fall under farming rules which opens up a whole different ball game with the IRS. Guess I'm suggesting that you do some up-front investigatory work before you jump in and buy the land with the thoughts of making $$$. I know a bit about it because I own a 17-acre forested parcel and I've discovered a whole bunch of pitfalls in the process. Chuck



However, if you logged it yourself and milled the lumber to build the house with, I would think that would get you out of the IRS loop wouldn't it?

Reactions: Agree 1


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## Matthew Jaynes (Jan 26, 2016)

@Kevin I Don't want to do a 100% clear cut of the tract 80 - 90 % cut and only to cover the cost of the land and housing. I love trees as well and still want a bunch on the property. but I also want land for a few livestock and a good sized garden so I could be Self sustainable and live off my own land. and become some old hermit and make obscene wooden sculptures to sell at local trade days. the American dream !!!

@Nature Man I'm not going to jump into this feet first with a blind fold on. I saw the property and thought to myself that if I could purchase that place and sell the lumber I could in fact get 13 acres and a nice home for a fraction of the cost. it is by no means my only option, and I am weighing in on a lot of factors. more bang for my buck so to speak. acreage here in liberty county has gone up a lot over the years and from what I can tell averages about 18K an acre. where as the 13 acres is going for 6.3k an acre for a total of 82,500. I am looking for a minimum 5 acre lot maybe 3 acres if the price was right and the land was good. I would love to have 2000 acres of all old growth forest and my house right in the middle, but I didn't win that 1.6 billion powerball the other week ....


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## Nature Man (Jan 26, 2016)

JR Custom Calls said:


> However, if you logged it yourself and milled the lumber to build the house with, I would think that would get you out of the IRS loop wouldn't it?


Guess it depends on what your objective is. If you are trying to make money from the timber, then you are effectively running a farm. If you are building your home with the timber, then that is a different story. Advantage of farming timber is you can write off the farming expenses, whereas if you are using the timber for your personal use, then you will lose the write offs. Third option is to do a blend of farming and personal use. Write offs can be used for tax purposes, and are generally a good thing. In any event, want to make sure you think through with some knowledge the ramifications of owning land. Securing professional advice from foresters & accountants is highly suggested. Chuck

Reactions: Informative 1


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## Kevin (Jan 26, 2016)

It's not a large enough operation but the really big timber companies use corps and trusts to avoid and defer many of the taxes. A small undertaking like that might be best done slowly if you know what I mean. Don't try to recoup your money quickly. And sure as heck don't stretch yourself by counting on the sale of the timber - buy it only if you can afford it without falling a single tree. That would be my advice if you had asked. Wait, you did ask so that is my advice.

Reactions: Agree 1 | Funny 2


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## Matthew Jaynes (Jan 26, 2016)

Thank you everyone for your knowledge and input with my inquiry. Y'all have givin me a lot to consider and think about.


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## steve bellinger (Jan 26, 2016)

Don't know the prices of pine in TX, but her in Tenn. Most loggers woun't even come look at a pine lot less than 50 acres. That's what they tell me any way. Have talked to a few folks about thinning my mixed hardwood lot.( 8 acres) and the first thing they asked me on the phone, was it ain't pine is it. When i said no that is was mixed hardwood and hadn't been touched since at least 1977 they perked up a bit. Still not sure if i'll let them or not, as the critters that live here might not like me if i do.LOL


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## hmmvbreaker (Jan 26, 2016)

steve bellinger said:


> Don't know the prices of pine in TX, but her in Tenn. Most loggers woun't even come look at a pine lot less than 50 acres. That's what they tell me any way. Have talked to a few folks about thinning my mixed hardwood lot.( 8 acres) and the first thing they asked me on the phone, was it ain't pine is it. When i said no that is was mixed hardwood and hadn't been touched since at least 1977 they perked up a bit. Still not sure if i'll let them or not, as the critters that live here might not like me if i do.LOL



This is in fact how I make almost half of my living. I "log" trees that logging companies wont touch for whatever reason. I am currentliy into a pin oak that i estimate an EASY 1,000bfd out of, but it is by itself so no loggers will consider it. Too much overhead for them for one tree, never mind the lumber quality. So, I will log it and sell it to a sawyer or log buyer myself. Dont know if that helps but could be an option.

Reactions: Informative 1


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