Mastering The Art Of The U-turn

You know the scene all too well….. you’re driving down the road and all of a sudden, you spot some really interesting piece of property - you know nothing about it, but something tells you it might be worth a closer look. Now comes the hard part. Do you keep on truckin’ or do you do what any savvy land investor does and slow down, pull over, then do a U-turn and head right back up the road, to check things out?!

This is huge, folks and it takes a monumental effort to interrupt the flow of your day,  but it could mean the difference between investor mediocrity and finding the kind of deals that people write books about. Just think how many other people have spotted the exact same parcel and probably had the exact same thought as you just did, but carried on driving. I’m here to tell you it’s time to change your behavior. Land deals generally don’t fall in your lap, but the harder you work, the luckier you’ll become.  Think of your business as a treasure hunt - it’s exciting when there’s a good chance you’re the only one going after a particular opportunity. That derelict shed at the side of the road might be sitting on 100 acres, or give access to who-knows-what to the rear of the property.

Any of you had this type of experience?

Good luck out there; keep thinking outside the box and before you make your move, check your rear-view mirror!

Richard Dale-Mesaros

Land Specialist with www.NorthernAcres.com

…..and Chief Deal Weaver at www.BlackWidowNetwork.com

Americans wanted land 250 years ago, and still do

Fifty years ago, I stood on a stage at Morningside School, dressed as a British officer from 1758. My eighth-grade class was celebrating Pittsburgh’s Bicentennial.

I was Colonel Henry Bouquet, second in command under General John Forbes who, though ill and litter-bound, had led 7,000 British soldiers and colonials across Pennsylvania to the Forks of the Ohio River.

The French had staked a claim to the Ohio country a decade earlier, then built Fort Duquesne at the point where the Allegheny joined the Monogahela to form the Ohio. This gave them a water highway to the Mississippi and New Orleans.

George Washington and a handful of Virginians had taken a run at the Forks in 1754, only to be whipped badly and allowed to withdraw. This defeat initiated the French and Indian War (1754-1763) and brought immense consequences. Read more »

I know nothing about wineries

My knowledge of wine is limited to the fact that there are reds and whites.

In a wild year, I might drink three, maybe, four glasses; mainly for healthy-heart reasons.

I wouldn’t know an earthy tone from dirt.

But I had an idea about a month ago. I live in a mountain county about an hour’s drive west of the Intersection of I-81 and I-64 at Staunton, Virginia in the Shenandoah Valley. We’re two hours due west of Charlottesville. My county has 2500 full-time residents and no winery. We’re looking for agriculture-based businesses.

I know of a farm that might work as a winery. The soils are limestone and shale. About 60 acres are slightly sloped and another 40 would be trellis-capable. Another 140 acres is pasture. It’s been used as a cattle/sheep/hay farm for 200 years. The 60 acres is probably Murrill soil, well-drained and about four- to five-feet deep.  Stoney, but tillable.  pH estimated at 5.5 to 5.6. Read more »

Buyers: Don’t be too nice

My wife, Melissa, is one of two lawyers in our county. She does a lot of dirt law–rural real estate. She’s also the part-time Commonwealth Attorney, who has been perfecting her prosecutorial technique on me for years.

She told me this morning that buyers can be too nice. This comes from a woman who introduced herself to me as someone who was “nice as pie” and “friendly as a pup.”

A couple from the city–highly educated folks–bought a place out here some years ago. The seller told them that a pond they liked was on the property. They had a survey, which had no physical features and was not marked on the ground. They didn’t walk the boundaries or have a surveyor map the property on a topographical map.

The pond turned out to be not on their property.

The buyers accepted the word of the seller and the confirming opinion of the real-estate agent. They didn’t want to appear to question the truthfulness or accuracy of either one. They wanted to be nice. They didn’t do their homework. The statute of limitations has run out.

The lesson here is: do the research necessary to confirm what you’ve been told and what you think you know.

Out-of-State Owners A Good Bet For Land Deals

Before I dive in, I wanted to thank Ryan Folk for inviting me to join the illustrious ranks of the LandThink blog contributors. I have seen some very insightful posts and a great deal of stimulating discussion in the comments sections!

Having started my land investment career basically with fresh air and a hunkering for a good deal, I had to (and still do) employ some out-of-the-box strategies, to get my phone ringing with folks who want to sell their land. One particularly successful technique has been sending letters to out-of-state owners.

I guess there’s a whole mess of theory surrounding how to write effective direct mail letters ( …and we’re not going to get into that here!), but one of the cool things about this type of campaign, is that you can test different versions of your letter, to see which one generates the best response - just use different colored paper, or some other means of identification, to let you know which letter the seller responded to. This way, you can go from complete garbage to something that gets results, without really needing to be a letter-writing genius. Read more »

Oil’s up, gas is up: Here’s the leasing low down

The phone call came in cold, three weeks ago. A major gas company was offering $10,000 to buy a 50-foot-wide, pipeline right-of-way easement over about a half mile of timberland I own with three others.

Domestic oil and natural gas are in play from Wyoming to West Virginia. Agents for oil-and-gas (o&g) companies, known as landmen, are leasing land for drilling and production (www.landmen.net). A lot of cash is being waved under a lot of noses.

Most landowners, including us, want to work a deal, because of the money. We also want to be treated fairly, and protect our property and its future value.

The written agreement between landowner (lessor) and company (lessee) governs the money and how development is conducted. Oral agreements don’t count.

Here are points for landowners to consider regarding o&g leases. Read more »

Stepped-up basis for heirs

When you buy land, you need to establish your “basis” for tax purposes. Starting basis is basically your purchase price, plus, perhaps, certain expenses that you incurred.

When you buy real estate, you will often need to allocate basis at the time of purchase among several different accounts, such as improvements (house, barns), timber (separate merchantable timber with immediate sale value from pre-merchantable with future value), minerals and land. The total of these basis accounts cannot exceed your overall basis in the property. Individual basis accounts are set up at the time of purchase, because a landowner often does different things in each account, which increase or decrease the individual account’s basis. As you hold the property, each basis account will be adjusted according to what you do. If you build a bridge, the basis in your land account increases, because it is a permanent improvement in the property. If you sell an acre from your land account, your basis will be reduced. Separate basis accounts can help you pay off a purchase through the sale of some assets. Read more »

Oil and gas leases

A boom is happening in places with oil and gas reserves. Deep “plays” are now economically feasible where they weren’t two years ago when oil was a lot cheaper.

In West Virginia, Pennsylvania and New York, gas in the Marcellus shale is in play. Acreage is being leased and drilled; pipelines are planned. Similar frenzies are occurring in Texas, Wyoming, South Dakota, Arkansas and other locales.

Landowners need to educate themselves about the language in these leases and what their lease rights are worth.

The West Virginia Surface Owners’ Rights Organization (www.wvsoro.org) is working with the West Virginia Farm Bureau to educate property owners. These folks are not against leasing and o&g production; they’re for fair compensation. The WVSORO website links to all state o&g laws as well as posts regarding the dollar amount of current offers for acreage and royalties. Everything is negotiable. Lawyers working for landowners are listed, along with other resources.

I’m interested in hearing what’s going on around the country, from the landowners’ perspective.

Ponds impound more than water

Everyone likes a swimming pond.

A couple of willows weep majestically. Spring Peepers put on their heavy-metal show at night, keeping the old folks up and giving the young ones the wrong idea. It’s a slowed-down place where cell phones should be banned, and no one yells at the dogs when they get filthy.

Nothing is better after a long day of trimming hedges or trading them than jumping in. The deeper down, the colder and lonelier it is, which is like a lot of things in life.

Ponds are smaller than lakes. In most places, a pond is fewer than five or ten acres.

In curmudgeonly New England, many lakes are called ponds. The most famous is Walden’s 61 acres in Concord, Ma., where Henry David Thoreau camped out about two miles from his Mom’s kitchen. New England is also the place where seashore mansions are called cottages, and old fortunes are not called anything at all.

Ponds confine water. This happens in natural holes, like those left by glaciers as they fled north taking tons of souvenir rocks with them, or by building a dam that impounds water. All dams fail eventually. Read more »

What in the world does a land consultant do?

I’m often asked — usually by my wife of 25 years — “Just what is it that you do all day?”

She’s a lawyer. She has an office building, a sign, a secretary and an old-fashioned barrister’s desk the size of an aircraft carrier’s flight deck.

My usual response is: “Today, I was visited by that slinky woman from Paris, Fifi L’Amour, who whispered French things into my ear as we drank champagne.”

Melissa rolls her eyes. The closest Blue Grass, Virginia, an unincorporated village of maybe 25, has ever gotten to a Parisienne, slinky or otherwise, is a wonderful Dutch war bride who came here some 60 years ago and a couple of Mexican guys who are working for a local contractor.

On the assumption that a reasonable question deserves a reasonable response, I thought I would finally level with Melissa and curious CRE readers. Read more »