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Lacto-Ovo Vegetarian
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I don't think so! Notice all the exclimation points in the ad... reminds me of a car salesman. Looks risky at best, imagine a tornado going thru there...

I would offer $3k an acre.
 

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agmantoo
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Unless the land will carry the price the trees are not much of an investment. I am a commercial tree grower selling biomass. Personally, I would rather have many more acres and a less valuable array of trees but with a significant higher count. Pines will give a 13% return on the trees themselves and the amount of land that you would be able to purchase with that amount of money would also create another opportunity. I venture forth with an expectation of making a good return from both land and trees. The land is typically leased to hunters while the trees grow. I get deferred taxes due to the forestry enterprise, the hunters pay the taxes and I get incremental income as the trees grow. Long range, tree production affords a wonderful financial opportunity that all to often goes unrecognized. As a side note, are you award that many mutual funds own huge tree plantations? When the stock market sinks they sell land and trees and when the stock market flourishes they buy land and plant trees. This keeps the investors happy and we as non market professionals wonder how the brokers did so well in a down market. Right now life is not that simple for the shakers and makers
 

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Not really, no. They are asking about 22.7K an acre. Around here (Portland Oregon,) that would be okay, if it was close enough and the roads were good enough. In the middle of Kansas, no.

IMO, this is very overpriced.
 

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Overpriced for KS. You can find better deals elsewhere....
 

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AFKA ZealYouthGuy
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Not really, no. They are asking about 22.7K an acre. Around here (Portland Oregon,) that would be okay, if it was close enough and the roads were good enough. In the middle of Kansas, no.

IMO, this is very overpriced.
Actually that brings up a good questions... what ARE timber trees worth in Kansas? I assume that timberland there is much more valuable than other places??? Since Kansas isn't really known for it's trees and all??
 

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I know nothing about value of such things. So I ask those that may, what's your take on this offering? ... see link:
http://wichita.craigslist.org/grd/948228299.html
Clearly, the value is in the timber/tree inventory and not in the land. That means you would have to assess it in terms of the timber value. If you assume the yields and prices in the listing are more or less accurate, what you would have to consider would include:

1. What kind of labour, equipment and cost are going to be required to maintain, harvest and sell the "transplantable trees"?

2. What would be the cost of maintaining the tree farm 10-14 years into the future (taxes, plus labour and inputs), during which you have no further revenue?

3. What are risks to the tree inventory (disease, fire, twister) and can you insure the inventory against them? If so, add annual cost to #2.

4. What is your opportunity cost? (i.e. what could that $240,000 earn you in another venture over 14 years). You will either have the $240,000 tied up as equity in the property or you will be making payments on the land for 15 years.


While $1.2 million sound like a lot of money for watching trees grow, the venture has risk and you sure have to be patient. While i bet a fella could make a reasonable return on the investment, once you do the caluculations I think you will see it is not the easy money that the listing implies.
 

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Buy some raw land, and get a grant to plant some trees from U of K. Hey, maybe the grant would cover the cost of the land...
 

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unless trees grow a whole lot faster in Kansas than they do around here in Ky, there will not be a big tree harvest on that eleven acres in anything close to 14 years. walnut and pecan are not exactly a rapid growth tree. I would give them another 50 years or so to mature prior to harvest. that quarter million could be makin a lot more money tied up in other things I would think. ....but then they aint my trees, so I dont get to set the askin price. :)


(I dont think they are going to be my trees either, not at them prices)
 

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YH is right on the money. Harvest those trees in another 10-14 years? That is a joke! Actually, you might get more money harvesting the pecans and walnuts than cutting them down. To get an honest appraisal, I would look at the value of raw land in the same area, then look at the value of mature trees amoritized over a 50 year period at realist interest rates, say 4-6%. That should give you a real selling price
Michael
 

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Failure is not an option.
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KS dairy farmers
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Discussion Starter · #18 ·
My initial reaction was the price seemed on the high side.
Open tillable farmland varies from $1,000 to $2,000 per acre in this area.
Where the trees are planted is an area known as the Paradise Valley, rich river bottomland soils that can grow corn, cotton, soybeans, milo, wheat, hay well-( for Kansas). I have driven past and admired the Pecan Orchard many times. Very well kept and aesthetically beautiful. Just under an hour's drive from a major Metropolitan city. Close enough to drive to city but far enough out to be away from the inevitable problems that come with any city.
So if one were to give benefit of the doubt and say the bare farmground was valued at $2,000/ acre that would be $22,000 more or less for the land.

I reason that *at some price* the property would be a good investment.
I do not claim to know what that price would be.

Thank You for the links Rocky Fields and Thank You to everyone for their thoughts. Tree farming looks deceptively simple, but my suspicion is that a large body of knowledge is required to successfully manage such an investment.
 

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When I began farming in 1968 the land agent who I rented some land from planted about ten acres of a farm to walnut trees.He wrote a book on how to raise walnut trees and told me that the trees would educate his granchildren.Now------forty years later the trees are about five inches in diameter and may not educate his great grandchildren.I would not buy existing trees, but I would consider planting on bare ground.
 

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I've seen this same "shell game" played before......only it was Christmas trees planted. The seller claimed the 15,000 "seedlings" would mature into Christmas trees and have a yield of $150,000. They were selling the 40 acre parcel for $100,000, about twice what it was worth at the time.

Seedlings don't necessarily make Christmas trees. And they surely don't make Christmas trees without annual trimmings. Then comes the work of harvesting the trees and finding a willing wholesale buyer.

The projections are highly suspect and border on fraudulent. Dense woods grow extremely slow and there is no guarantee the trees will produce veneer or sawtimber high grade logs.

The seller is a dolt. Anyone smart enough to invest $250,000 is generally smart enough to see a shady deal.....as this one is.
 
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