Timberland Advisors, Inc.

WOODLAND MANAGEMENT | TIMBER SALES & APPRAISALS | LAND SALES

MAPPING | LAND BUYER AGENCY

ALL ARTICLES WRITTEN BY TIM CARTNER, NC & SC REGISTERED FORESTER

WWW.TIMBERLANDADVISORS.COM

LAND & TIMBER NOTES Property Enhancement Checklist

Good

Boundaries Make

Good Neighbors

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Rooted in early English law, this septennial perambulation is a practice that all landowners should consider implementing into their land management routine.

Why maintain boundaries?

• Prevention of encroachment. I’ve seen outbuildings, permanent deer stands, shooting lanes, dog kennels, old cars, and garbage heaps across clients’ boundaries.

• Prevention of trespassing. An established boundary is generally respected.

• Cost savings. Clearly delineating your boundary lines can translate into reduced fees when forestry work is performed and lowers the risk of costly accidental cutovers.

How to maintain your boundary lines.

Before permanent marking can be applied, the corners and boundary centerlines must be located.

Centerline establishment may or may not be able to be performed by a forester, depending on the existing property description (from deed or plat), understory conditions, time elapsed since the last survey, and quality of the “on the ground” marking of that survey. If you have a survey performed, make sure you have your center lines staked and flagged. This may cost a little more but

• Manage your understory. Keeping your understory under control improves aesthetics, crop tree growth, and recreational usage while reducing the cost of many management activities.

• Keep roads and trails maintained.

Good access is essential for viewing, managing, and utilizing a property.

North Carolina Purple “No Trespass” Mark

while back, I read a Wall Street Painted Boundary Line Journal article (“Some Devoted New Englanders Went for a Stroll in 1651 and Haven’t Stopped Since,” May 23, 2015) about New Hampshire towns complying with a 17thcentury law requiring boundaries to be located and reestablished every seven years.

Not only will your ownership be more productive and enjoyable, but tending to the items on this list will also make your property more attractive to a potential buyer if you decide to sell.

will ensure you can permanently mark your lines correctly. A survey done in conjunction with a timber sale can be written off as a sales expense.

Once the boundaries are established, trees close to the boundary centerlines should be painted (facing in toward the boundary line—see picture to the left). The frequency of the marks should be such that you can see from tree to tree, usually every thirty to sixty feet. Where the line passes through a tree, paint a dot on both sides of the tree. At corners, a triple mark should be painted facing the corner iron. When boundary marks are applied correctly (see tips below), they will last at least seven years before needing fresh paint. For land and timber work, a survey does no good if you can’t locate the lines on the ground. Based on my experience, it is almost a certainty that you will be encroached upon if your boundaries aren’t clearly marked, especially in areas with urban sprawl. And remember, when harvesting timber, close is not good enough for boundaries. Cutting over the line can lead to major legal trouble.

Boundary Marking Tips: • To make your marks to last, scrape off loose bark before painting with forestry-grade paint—Nelson brand boundary paint is a good choice for this.

• When removing loose bark (I use an inexpensive Gerber machete to do this), take care not scrape into the live cambium—this may harm the tree and/or result in poor paint absorption.

• If you use “No Trespass” signs, don’t fasten them tight to the tree. Leave an inch or so of space. Otherwise, tree diameter growth will pop the signs off the tree in a year or two. An excellent source for quality stock or custom aluminum and plastic signs is Voss Signs (www.vosssigns.com).

• Maintain property boundaries by posting and painting.

• Have quality maps for your property.

A complete map file should include surveys, aerials, topographic, and soils maps with overlays showing roads, trails, timber types, streams, ponds, and any other significant features. Digital versions are a must.

• Have a forest management plan.

A good plan will include detailed stand descriptions, volumes, values, objectives, and a projected timber harvest/revenue timeline.

10

Guaranteed Ways to Lose Money Managing Land & Timber

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Relying solely on a Forest Service management plan. Forest Service plans

2

Failing to establish a timber tax basis.

can provide general management guidelines, but not the detailed data, mapping, and customization needed to ensure that the best possible decisions are made for your land and timber. If you have a plan written by the Forest Service or other government agency, the very least you should do is have it reviewed by a private consulting forester to assess its “real world” feasibility and financial soundness prior to implementation. I will review your plan and provide feedback at no cost. If you don’t have a plan, I’ll work with you to develop one.

When you purchase or inherit timberland, you should have the timber appraised. This allows you to split your capital costs between your land and timber, so when you do sell timber you Continued on back page >>>>

volume additions and, as size increases, graduation into new, higher-value product classes.

• Wildlife habitat quality. Hunting is a popular recreational activity.

Good habitat improves value.

TIMBERLAND VALUATION

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ost of us have grown accustomed to ascertaining with a few clicks of a mouse the value of a car, house, or most any other item that we own or wish to purchase. When it comes to timberland, this is not an option.

A complex mix of tangible and intangible features make up its value, meaning it should be assessed by a professional with the proper training and relevant experience. Tracts that to the novice may seem nearly identical can have vastly differing values.

Components of Value • Location. Proximity to public utilities, population centers, recreational attractions, and conveniences add value.

S

elling timber “lump-sum” means the seller is paid upfront before any cutting takes place.

The timber is evaluated, paid for, and the buyer owns the timber rights for a set time (the cutting period), which is typically 12 to 24 months.

This sale method is generally limited to tracts where most or all of the timber is cut.

Advantages: • A guaranteed amount paid in advance.

• Low risk for the seller—if trees die, are damaged by storms, or any other loss occurs after closing, the seller bears no liability for loss.

Disadvantages: • Difficult to apply to selective timber harvests.

• A substantial amount of field work is required to establish accurate pre-sale forest product volume and value estimates.

TIMBER SALE TYPES

• Future uses. Property in the path of progress is worth more based on its speculative future value.

• Size. Generally speaking, large tracts sell for less per acre than small tracts.

• Local land use laws. Zoning and other rules can impact value.

• Current timber value. On rural tracts, the timber may be worth much more than the bare land.

Species, size, volume, age, health, access, harvest costs, and local markets all affect timber value.

• Future timber value. Just because trees aren’t mature, it does not mean they do not have value.

Well-managed, healthy trees gain value as they grow, through

• Longer contract period.

In the majority of cases, the lumpsum method is the best way to sell a stand of timber for final harvest.

Selling timber on a “pay-as-cut” basis means the seller is paid on a per-unit (tons, cords, board feet) basis after the timber is cut and scaled. This method is typically used for selective harvests or stands where accurate sale volumes are difficult to determine in advance.

Advantages: • Assuming merchandising is correct, the seller is paid exactly what the timber is worth.

• Flexibility—the ability to make minor changes during the harvest.

• Allows for a short cutting period.

Disadvantages: • The seller assumes all of the risk for loss due to poor merchandising, theft, trees left uncut, waste, or storm damage.

Most timber buyers prefer this method for many reasons including no or low money up front, little risk of losing money, no required timber inventory, and less need for monitoring product separation because the seller is taking the loss if high-value products get tossed in the pulpwood pile.

• Soils. All soils are not created equal—fertility affects the tree growth rate and the volume per acre of forest products it is possible to produce. Additionally, some soils hold up better in damp logging conditions, allowing for harvesting in the winter months when mill inventories are low.

With proper marketing, timber on these tracts brings significantly more than on those suited only for dry weather harvests.

• Lease potential. Attractive tracts demand higher lease rates.

• Terrain. The lay of the land can hinder or limit harvest and management practices. Steep or eroded terrain affects the number of usable acres.

• Water features. Buyers often seek ponds, lakes, duck impoundments and streams.

• Aesthetics. Scenic beauty is hard to put a dollar figure on but often is what makes a property sell.

• Accessibility. Good access is essential for a working timberland property. Access costs are factored into the value of standing timber.

• Boundaries. Survey work can get expensive, so having both a plat of your property and the boundaries clearly marked on the ground is a significant positive.

• Improvements. Structures, wells, septic tanks, and bridges in good condition add value.

• Defects. Garbage filled gulleys, dilapidated buildings, and other imperfections reduce value.

Take advantage of my free initial inspection, and I’ll identify your land’s positives and negatives and give you tips for enhancing its overall health, value, and attractiveness.

My name is Tim Cartner, and I’m the owner of Timberland Advisors. I hope this newsletter will give you a bit of insight into the land and timber business and the services I offer.

What I do: I am a registered forester and real estate agent. I represent landowners, developing and implementing financially and environmentally sound land and timber management and sales solutions.

My advice for landowners: Be proactive. Mother Nature never sleeps, and your land will change with or without your management input. I often see properties where indifference and neglect have led to losses (financial, forest health, and wildlife habitat).

If this is the case on your property, I can help you with its rehabilitation.

Feel free to contact me with any questions you have about services or land and timber management. If you already have a plan, whether written by a government agency or another consultant, I’ll be glad to review it and give you my thoughts. If you don’t have a plan, I’ll work with you to help develop one.

DID YOU KNOW? Timber on tracts with conditions suitable for harvesting in wet weather conditions can be worth 10% to 50% more than on those where harvests are limited to dry conditions.

Tim & Keeper

Best Regards,

Tim Cartner, RF M: 704.996.0380 E: tim@timberlandadvisors.com

— FORESTRY AND REAL ESTATE SERVICES — Timber Sales & Appraisals I’ll represent you and streamline the sales process, resulting in higher revenues for you and less headache for both you and the buyer.

The groundwork and information I provide reduce buyers’ bid preparation time from days to hours, resulting in more and higher offers. Plus, when the invitation to bid comes from me, the buyer knows you are a serious seller, not just another tire-kicker fishing for price information.

Even if you are not selling timber, you may still need an appraisal. I will provide a report detailing your timber by stand, species, and product. Included in the report are detailed aerial, topographic, and soils maps. Timber volumes and values are statistically verified, making certain that you have the most reliable numbers possible.

Why get an appraisal? Financial planning, timber tax basis establishment, and timberland pre-purchase due diligence are just a few reasons.

Woodland Management To maximize your property’s potential, you need a sound management plan in place. The plan I prepare for you will incorporate your goals into a timeline with practical, cost-effective steps for their fulfillment.

Note: To qualify for the reduced agricultural tax rate, your forestry plan is not required to be written by the NC Forest Service/SC Forestry Commission.

Primary Work Area

NC Counties: Alexander, Cabarrus, Catawba, Cleveland, Davie, Gaston, Iredell, Lincoln, Mecklenburg, Rowan, Stanley, Union, Rutherford, Yadkin SC Counties: Chester, Cherokee, Fairfield, Kershaw, Lancaster, Union, York

Land Sales*

Land Buyer Agency*

The standing timber can make up a substantial portion of the overall tract value—in many cases more than the bare land—meaning it is imperative that you select an agent knowledgeable in woodland management and valuation.

Every property I list for sale gets a thorough assessment of the timber, terrain, soils, and other conditions that contribute to value. If your tract isn’t “market ready,” I’ll make recommendations for improving your property’s overall appeal.

Following the pre-sale assessment, I’ll go to work marketing your property through Carolina Timberland Sales’ extensive network of media, agents, and buyers.

Looking for land? Save time and money and eliminate the chance of buyer’s regret by hiring an expert to locate suitable prospects and guide you through the purchasing process. Often you pay no fee for representation; if the property is listed, the selling agent’s commission is split at closing to compensate the buyer’s agent.

To do my best work, I need you to define the parameters of your search (price range, acreage, land features, location, etc.). The more detail you provide, the better able I’ll be to locate a property for you.

Once search criteria are established, I’ll separate the wheat from the chaff, so your valuable time is spent viewing only quality candidates for purchase.

*My real estate license is affiliated with Carolina Timberland Sales, a firm specializing in rural and timberland sales.

Learn more at: www.carolinatimberlandsales.com

FSBO? Is your land “For Sale By Owner”? Send your details, and I’ll see if your property is a match for one of Carolina Timberland Sales’ buyer clients.

— FREE, NO-OBLIGATION INSPECTION AND REPORT — I offer a free, no-obligation property inspection and report for those with 20+ wooded acres within my work area.

The report will provide the following information: • Timber descriptions (species, stand health, maturity) and whether or not you have marketable timber.

• Property positives and negatives and recommended land and timber management practices based on our pre-inspection conversation.

This report does not include timber values.

To get started I’ll need the following: • Your name and property’s tax listing name • Phone number and email address • Total parcel(s) acres

I can help you go mobile.

Access your maps, management plans, and other land records from any connected device.

• Property location (county and state) Send this information to me, Tim Cartner, by email: tim@timberlandadvisors.com; call or text: 704.996.0380; or fill out the form at www.timberlandadvisors.com.

Inspections are usually conducted two to four weeks from initial contact.

— MY VALUES — Knowledge. Benjamin Franklin once said, “An investment in knowledge pays the best interest.”

I value continual learning and believe a diverse knowledge base improves the job I do.

Humility. I know enough to know that I don’t know it all.

When in doubt, I collaborate with other professionals to make sure the job is done right.

Patience. Managing land and timber takes time. Weather, growth rate, seasons, tax law, and markets all Sometimes nature moves influence the slowly management and sales timeline.

Individuality. I’ve never liked to follow the herd. Likewise, your land and management goals are unique and deserve to be treated so, not just given another onesize-fits-all Forest Service plan.

Transparency. I do my utmost to avoid conflicts of interest. There are never any hidden fees in my services or those contracted. I am representing you—every dime is accounted for.

Straightforwardness. I prefer the unadorned truth. Anything less wastes your time and mine.

Resourcefulness. I enjoy the creative problem-solving process required to balance clients’ multiuse land and timber management goals efficiently.

Grit. When the going gets tough, perseverance and diligence make all the difference in the world.

“10 Guaranteed Ways To Lose Money...” continued >>>>

will only pay tax on the gain in value from the time of acquisition. Didn’t do this? I can perform a “back cruise,” which estimates timber value at the time of purchase by regressing current volumes.

After Control

3

Failing to control the understory in your pine stands. A dense understory can make performing timber

inventories, pre-harvest tree marking, and boundary location almost impossible. I’ve worked in pine stands with visibility so compromised by understory vegetation that the appraisal had to be delayed until winter when the leaves were off the trees. Also, excessive understory siphons away nutrients and water from your crop trees, resulting in considerable loss of growth and revenue.

Prescribed fire, herbicides, or a combination of both are costeffective methods to control understory.

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Before Control

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Planting trees without proper site preparation. Many landowners plant immediately after a harvest, known as “hot planting,” only to find a year or two down the road that natural growth has taken over the stand. Natural growth from seeds and stump sprouts routinely results in 5,000+ trees per acre—many more than you want or need.

There is nothing wrong with establishing a new stand through natural regeneration, just don’t waste your money planting trees if you are going that route. Use that money a few years down the road to thin the stand pre-commercially.

Overstocking. I commonly see loblolly pine plantations planted with more trees per acre than makes any financial or biological sense. Overstocking costs more and causes diameter growth to stagnate before a first thinning harvest is economically feasible. An initial rate of 450 trees per acre is sufficient on most Piedmont sites. On rough terrain where future thinning harvest potential is limited, it is advantageous to drop planting rates down to between 300 to 350 trees per acre. The trees will be healthier down the road, produce more sawtimber, and the cost savings of planting at a lower density are significant, especially when compounded over the life of the stand.

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Failing to properly manage stand density. Managing density begins at the time the stand is

established and is regulated by thinning harvests as the stand ages. Density affects stand value, health, growth, and wildlife habitat quality. Timing, post-harvest density, tree selection, and contractor choice are all crucial components of a successful thinning harvest. By neglecting to thin, or doing so too late or improperly, many landowners are unwittingly throwing money away.

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Assuming a buyer’s offer is the same thing as an objective appraisal of value. Offers vary

widely—sometimes as much as 100%. The buyer’s job is to purchase your timber, not appraise it.

Failing to control your lessees. Years ago I handled a timber sale for a client who leased their property to a deer hunter. Before to the sale, we met with the hunter to inform him of our plans.

Evidently, we did not make our expectations clear enough. To make a long story short, when a potential buyer’s cruisers came to inventory the timber, the hunter told them to leave because he was hunting that day. Soon after, received a call from a disgruntled mill manager. I apologized, compensated his crew for the lost time, and coaxed him into sending them back out to cruise the timber. When bid day came, the buyer whose crew the hunter had run off offered $20,000 more than the second place bidder. Fortunately, I was able to get the buyer back out to bid—otherwise the hunter’s actions would have cost the landowner a substantial sum. Hunting season(s) conflict with the some of the best times to conduct timber sales.

Leasees can be a plus, just make sure they know your interests come first.

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Letting a buyer manage your timber. That a buyer

makes more money when he pays you less for your timber is an indisputable fact, meaning any advice he gives comes with an inherent conflict of interest. Beware of letting the fox guard your hen house.

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Selling timber without representation. Studies

have shown that forestry consultant-administered sales result in considerably more money than do-it-yourself sales. You’ll pay a fee for the consultant to handle your sale, but you’ll generate more net revenue, have greater returns in the future, and avoid the lingering doubts that you could have saved time, gotten more money, or a better job. See the study summary here in the 2016 edition of The Consultant: http://tinyurl.com/hy47nt2

Tim CartredneForrester NC/SC Registe Agent NC/SC Real Estate

80 Mobile: 704.996.03 rlandadvisors.com Email: tim@timbe ndadvisors.com Web: www.timberla

Timberland Advisors represents you.

THE TIMBER GAME DO YOU KNOW THE PLAYERS?

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aking wise timber management and sales decisions starts with understanding the roles of the various industry players and how they fit into your planning. Here is a brief overview.

The Buyers* Mills buy raw timber products and turn them into lumber, paper, plywood, etc. Most mills have a specific product purchasing niche. Some mills employ personnel to purchase timber, others rely on wood dealers, and some do both.

Wood dealers are independent buyers who supply mills with raw materials. They purchase standing timber, then contract loggers for the cutting and hauling to the various mills.

Loggers do the actual harvesting. Some buy timber, but these days most are contractors that cut for mills or dealers, focusing on production and leaving the hassle of cruising timber, marketing, and negotiating to someone else.

Pinhookers are the mercenaries of the timber business and are famous (or infamous) for unsavory buying tactics. These speculators are known for “flipping” timber rights, meaning they purchase the rights cheaply, then resell them to another buyer at a much higher price.

More on pinhookers at:

www.timberlandadvisors.com/timber-seller-beware

The Government The Forest Service can provide technical assistance and basic management advice. They also provide services (such as understory burning) that aren’t readily available from private contractors. They do not provide timber inventory, appraisal, or sales services.

The Representatives Forestry consultants are licensed foresters who provide timber management, appraisal, and sales services to landowners. This is the category that I fall into. The consultant’s job is to represent their clients’ interests, providing informed, objective opinions on values and management direction. As your representative, the consultant should avoid any fee structure that conflicts with your profitability and should provide you with a full accounting of any money they earn while working for you—this means no hidden fees in services provided by outside contractors. *Note: Buyers may be registered foresters or not. No

licensing is required to work as a timber buyer.

Visit www.TimberlandAdvisors.com to: • view properties for sale • get more in-depth Land & Timber Notes • learn more about services offered • request your free timberland inspection and report