Marketable Timber Value

[thunderlounge 8029]

I'm looking at moving farms. Current prop is 6 hours away, looking for something much closer, doing a 1031 exchange cause fuck taxes.

One spot I'm looking at is completely undeveloped. It's at the top of my range, so doesn't leave much left from the initial budget to improve much (utilities are to the prop entrance, with first 600ft into the property being included by the utility companies.

So if I burn up all the required capital, It'll be a bit longer before I can put a cabin on it. However, it does have a fuckton of black walnut trees scattered around the prop. I quit counting around 60, and saw a couple dozen more. And this was without going deeper into one of the bigger stands. These were just viewable from the edges.

Prop is mostly open in the middle, surrounded by a large stand of trees to the east, north, and south.

The trees I'm counting are all mature, at least 20" diameter (most are more), 60ft+ tall, and straight as can be.

 

So my question, after trying to get an idea from the google machine, is this:

What is a general, lower end, expectation per tree for selective cut timber from a lumber mill?

 

I saw anywhere from $1200 - $15k per tree.

My realtor noticed as well. We were talking about it too, and he seemed to think that a selective cut for the walnut would cover a pretty damn nice cabin. However my experience in dealing with that is pretty limited. You want me to work out farm/pasture rental deals, manage ponds/food plots/etc, I'm your guy. Timber value, not so much. Never been in a spot where that was a desired outcome.

 

I know black walnut is a highly desirable species, thus the better price, but I really don't know much about it all. Not even enough to know if that is something to take into consideration, or even a possibility. Anyone know anything that can help?

 

 

[CooterBrown 18089]

Maybe call up a sawmill and see how the process works? I’d guess they pay out based on volume recovered and not per tree.

[TwiceHorn 31677]

31 minutes ago, CooterBrown said:

Maybe call up a sawmill and see how the process works? I’d guess they pay out based on volume recovered and not per tree.

Yep, think this is the answer. And probably not just any sawmill, as most are going to be set up for construction material fabrication, i.e. pine lumber, OSB, etc., depending on where you are located.  I'm sure they could refer you to a more specialized mill, though.

I noticed this outfit sells and buys hardwood specialty lumber/timber. https://mopaclumber.com/timber-buying/

[thunderlounge 8029]

Y’all nailed it. I just had to figure out the right type of place to call.  Found a place that isn’t too far from the property, and got some very basic info. It doesn’t answer everything, but enough to move forward.

 

[DalTxHornFan 3122]

8 hours ago, thunderlounge said:

I'm looking at moving farms. Current prop is 6 hours away, looking for something much closer, doing a 1031 exchange cause fuck taxes.

One spot I'm looking at is completely undeveloped. It's at the top of my range, so doesn't leave much left from the initial budget to improve much (utilities are to the prop entrance, with first 600ft into the property being included by the utility companies.

So if I burn up all the required capital, It'll be a bit longer before I can put a cabin on it. However, it does have a fuckton of black walnut trees scattered around the prop. I quit counting around 60, and saw a couple dozen more. And this was without going deeper into one of the bigger stands. These were just viewable from the edges.

Prop is mostly open in the middle, surrounded by a large stand of trees to the east, north, and south.

The trees I'm counting are all mature, at least 20" diameter (most are more), 60ft+ tall, and straight as can be.

 

So my question, after trying to get an idea from the google machine, is this:

What is a general, lower end, expectation per tree for selective cut timber from a lumber mill?

 

I saw anywhere from $1200 - $15k per tree.

My realtor noticed as well. We were talking about it too, and he seemed to think that a selective cut for the walnut would cover a pretty damn nice cabin. However my experience in dealing with that is pretty limited. You want me to work out farm/pasture rental deals, manage ponds/food plots/etc, I'm your guy. Timber value, not so much. Never been in a spot where that was a desired outcome.

 

I know black walnut is a highly desirable species, thus the better price, but I really don't know much about it all. Not even enough to know if that is something to take into consideration, or even a possibility. Anyone know anything that can help?

 

 

You need to engage a real life forester.  My family has been using the same guy for three decades.  He gets a 10% cut, but has more than paid for himself with his knowledge of the market and the way he has conducted bidding processes.  We mostly have East Texas pine.  You may end up being disappointed in the price you get for the black walnut.  Fewer sawmills are really set up to deal with anything other than pine.  YMMV and good luck.

[thunderlounge 8029]

I’ll look into a forester. That’s a good idea.

The place I got hold of earlier deals in walnut and maple exclusively. 

[TwiceHorn 31677]

25 minutes ago, DalTxHornFan said:

You need to engage a real life forester.  My family has been using the same guy for three decades.  He gets a 10% cut, but has more than paid for himself with his knowledge of the market and the way he has conducted bidding processes.  We mostly have East Texas pine.  You may end up being disappointed in the price you get for the black walnut.  Fewer sawmills are really set up to deal with anything other than pine.  YMMV and good luck.

Yep, if you're owning timber property, a good forestry outfit is worth its weight in gold.

And yeah, east Texas and Arkansas mills and buyers are only interested in pine, basically.  Hardwoods are like weeds.  Plently of Black Walnut in Arkansas, though.

But it's different all over.

[Steel Shank 9439]

 

[Gil Bang 26099]

 

 

[UT_OB1 2227]

On 9/30/2022 at 6:43 PM, thunderlounge said:

I’ll look into a forester. That’s a good idea.

The place I got hold of earlier deals in walnut and maple exclusively. 

Would be interested to see if you’ve heard anythin else. 
 

A general question for anyone - do any outfits come and get a handful of trees, or is there a certain minimum?  I’ve got a few large oaks I need to get rid of (one is actually about 6-8’ diameter) and I’d rather sell them as timber than burn them all 

[Bevo 13633]

On 9/30/2022 at 11:03 AM, CooterBrown said:

Maybe call up a sawmill and see how the process works? I’d guess they pay out based on volume recovered and not per tree.

This is the answer. I looked into it a bit in the mountains in Idaho and there is definitely money there. It doesn't make sense for a few trees but for a good number, it makes lots of sense.

[thunderlounge 8029]

Just so happens I’ve found a good forester, and have some good info.

The most helpful thing I was told was for the first 12 months of ownership, don’t pull off any timber.  Allegedly if you’ve owned the property less than a year, you would have to pay capital gains vice standard income.

 

[NeverMarryAStripper 22030]

If you own the property for at least 366 days the timber sale will be a long-term capital gain rather than a short-term capital gain. I believe that all standing timber is considered real property, so the sale would qualify as a capital gain (either short term or long term) unless it is considered a business.

[BayouBill 835]

On 9/30/2022 at 6:26 PM, DalTxHornFan said:

You need to engage a real life forester.  My family has been using the same guy for three decades.  He gets a 10% cut, but has more than paid for himself with his knowledge of the market and the way he has conducted bidding processes.  We mostly have East Texas pine.  You may end up being disappointed in the price you get for the black walnut.  Fewer sawmills are really set up to deal with anything other than pine.  YMMV and good luck.

Can you PM me who you use? I have land in ETX (outside of Palestine) as well and we've used the same guy for years for our pines. Curious though to see who else is out there that people trust.

[thunderlounge 8029]

11 hours ago, NeverMarryAStripper said:

If you own the property for at least 366 days the timber sale will be a long-term capital gain rather than a short-term capital gain. I believe that all standing timber is considered real property, so the sale would qualify as a capital gain (either short term or long term) unless it is considered a business.

It will be structured as a business, yes.

What I’m unsure of (and need to find out) is for example I sell $20k of timber and put all of it right back into the property. Which bracket does that fall under, and can that be offset by the “loss” of the expense of improvement?

 

 

 

[DalTxHornFan 3122]

46 minutes ago, thunderlounge said:

It will be structured as a business, yes.

What I’m unsure of (and need to find out) is for example I sell $20k of timber and put all of it right back into the property. Which bracket does that fall under, and can that be offset by the “loss” of the expense of improvement?

 

That's actually some useless advice you are getting.  Assuming that you sell timber at 1 day or 366 days after acquiring the property, your taxable "gains" would likely be minimal as the timber you sold is probably worth exactly what you paid for it.  Putting $20k back in to the property would increase your overall basis for the next timber sale.  There are some crazy gubmint programs that will pay you to plant new trees for more than it even costs you.  Hire a competent forester to help you with this stuff.

Edited October 6, 2022 by DalTxHornFan

[NotActuallyALonghorn 4980]

I would also look into either getting the mill to cut you some boards out of your own trees or finding a small one man sawmill type operation to cut a few up for you. That way when you build a cabin you can use some of the wood from your own property for some of the stuff in there. We had a small one man operation cut up some walnut off our place for something like $50 or $60 a tree a few years ago. Still have a bit of I stacked up in the barn awaiting projects.

[fattyflattie 4639]

Interested in the timber talk. We’re currently looking at a recreational place with ~200ac  of pine. I’m not looking to cut/sell, but interested in how it all works. That could definitely change some of the math down the road. 

[NotActuallyALonghorn 4980]

Is the timber planted or just natural growth? How old is it? What is the density? If it is pretty young, you won't see much for a while. If it is just natural woods, it may or may not be worth much depending on the the density, size, and species composition. If it is mature, or nearly mature plantation pine it could make a significant difference.