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Land Report Top Ten: November 2011

Land Report Editors — Fri, 04 Nov 2011 07:00:37 +0000

From Hawaii to the Lone Star State, here are America’s priciest properties, led by $175 million Jackson Land and Cattle Ranch, pictured here, which is listed by Hall and Hall.

1. Jackson Land and Cattle: $175 million

These 1,750 acres are simply the most phenomenal property to come to the market in the Teton Valley in decades. Jackson Land and Cattle is one-of-a-kind in every respect: world-class improvements, including an equestrian center designed by Jonathan Foote, AIA; lack of any development restrictions; and don’t forget the stunning Teton views. Hall and Hall’s John Pierce has the listing.

2. Walton Ranch: $100 million

This 1,848-acre working cattle ranch was pieced together by the Walton family beginning in 1958. The family placed the ranch under conservation easement in 1983. Billy Long and Ron Morris of Ranch Marketing Associates have the listing.

3. Ranch Dos Pueblos: $84 million

This oceanfront parcel is on the market for the first time in three decades. Spanning 2,175 acres just west of Santa Barbara, it’s one of the largest remaining ranches along the breathtaking Gaviota Coast. Kerry Mormann & Associates has the listing.

4. Tranquility Estate: $75 million

These 210 acres on Lake Tahoe are crowned by a 20,000 square-foot mansion. Owned by Tommy Hilfiger co-founder Joel Horowitz, it was originally priced at $100 million in 2006. Listed by Shari Chase and Sue Lowe of Chase International.

5. Aspen Valley Ranch: $59 million

Billed as the largest ranch near Aspen in the Roaring Fork Valley, this ranch boasts senior water rights as well as over 800 acres and is located just 10 minutes from the Aspen airport. Joshua Saslove of Joshua & Co. has the listing.

6. Robert Taylor Ranch: $56 million

112 acres in Los Angeles’s tony Brentwood enclave. The roomy ranch house, which was designed by Robert Byrd, features 17 bedrooms and 17 bathrooms. Joyce Rey of Coldwell Banker Previews International has the listing.

7. Hana Ranch: $55 million
This 4,500-acre working ranch on eastern Maui surrounds the town of Hana. The property boasts two miles of Pacific oceanfront and rises over 2,200 feet up the slopes of Haleakala. Dan Omer of Island Sotheby’s International Realty has the listing.

8. Rockpile Ranch: $54 million

For only the third time in over a century, this 55,374-acre cattle ranch in the Davis Mountains of Far West Texas is on the market. Since 1992, the Rockpile has been owned by McCoy Remme Ranches (No. 41 on the 2011 Land Report 100). James King of King Land and Water is the listing agent.

9. Dana Ranch: $45 million

With only two distinguished owners in nearly 100 years and an unmatched record of profitability, the Dana is considered by many to be the finest operating and recreational ranch in the Rocky Mountain West. Supporting 3,000 animal units on 59,000± acres, it boasts over 13 miles of superb fisheries and an incredible diversity of wildlife resources from elk to waterfowl to upland birds. Listed by Dave Johnson with Hall and Hall.

10. Flying Dog Ranch: $40 million

This 245-acre Aspen landmark features nearly a mile of Collins Creek and Woody Creek and borders the White River National Forest. Morris & Fyrwald Sotheby’s International Realty has the listing.

Click here to download a copy of the November 2011 newsletter.

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On the Block: 600+ Acres in Kentucky and Tennessee

Land Report Editors — Mon, 17 Oct 2011 07:00:13 +0000

Five tracts in Western Tennessee and Kentucky totaling more than 600 acres will be auctioned on October 27. In addition to a considerable recreational component, the tracts are heavily timbered. According to Roebuck Auctions founder John Roebuck, these tracts are ideal investment opportunities that feature great hunting. A past president of the National Auctioneers Association, Roebuck has spent more than three decades in the auctioneering profession.

The breakdown on the tracts by location is as follows:

243± acres in McNairy County, Tennessee
195± acres in Hardeman County, Tennessee
9± acres in Hardeman County, Tennessee
58± acres in Hardin County, Tennessee
103± Acres in Calloway County, Kentucky

More details on the tracts, which will be auctioned by Roebuck Auctions on Thursday, October 27, is available HERE.

Date: Thursday, October 27, 2011 at 6:07 p.m. CDT

Location:
Selmer Airport Hanger (SZY)
2282 Airport Rd
Selmer, TN 38375

Roebuck Auctions
(901) 763-2825

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Sold! Texas’s Camp Cooley Ranch

Land Report Editors — Tue, 06 Sep 2011 07:00:37 +0000

SEPTEMBER 6 UPDATE:

Camp Cooley Ranch sold at auction for $28.5 million to Circle X Land and Cattle Company August 4. Twenty-two qualified bidders, along with their families, attorneys, lenders, and consultants, attended the auction, which was held at the Robertson County ranch. The $28.5 million sale price included surface and mineral/royalty interests. All equipment and personal property was offered through a separate transaction.

According to Bernard Uechtritz of Great Estates Ranches, Camp Cooley ranks as one of the most beautiful ranches in the nation, thanks to its topography, abundant waters, and multi-million-dollars of improvements. “In the cattle industry, Camp Cooley is a major brand name,” he said. Uechtritz coordinated the extensive marketing campaign leading up to the auction; the auction itself was overseen by Hall and Hall Auctions.

For Sale: Canadian River Ranch

Land Report Editors — Mon, 11 Jul 2011 15:53:33 +0000

Anyone familiar with the history of the American West knows the legend and lore that surrounds the historic XIT Ranch, whose 3 million acres encompassed the bulk of the western edge of the Texas Panhandle. The Canadian River Ranch covers some 111 square miles of the old XIT, including substantial frontage on both sides of its namesake, the Canadian River. The ranch’s varied topography rises from wide river bottoms to iconic mesas, but throughout its history it has been operated as a commercial cattle outfit.

Located 65 miles northwest of Amarillo, the ranch can also be accessed via a paved 4,500-foot land strip situated close to the headquarters. The ranch’s 7,000-square-foot, 6-bedroom, 6½-bathroom lodge is just one of many well maintained improvements, which include a ranch manager’s house, pilot’s quarters, barns, pens, and housing for the hands.

These 71,059 acres combine to form one of the largest contiguous land holdings inthe Texas Panhandle. The ranch is watered by 26 miles of the Canadian River. Not surprisingly, the Canadian River Ranch boasts exceptional hunting. Two state record mule deer have been recently harvested, and elk, bear, and mountain lion have also been sighted.

$33.753 million ($475 per acre)
(806) 763-5331
www.chassmiddleton.com

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Land’s Best Friend: Chesapeake Bay Retriever

Land Report Editors — Thu, 30 Jun 2011 07:00:22 +0000

If you’re a field trialer and perfectionist who expects a highly tractable retriever that always handles precisely, get a Lab. But if you’re a hardcore waterfowler and a bit of a maverick who admires resourcefulness and pure, cussed determination more than absolute obedience, consider a Chessie.

During the 1800s, the Chesapeake Bay retriever earned his keep in rough, cold water, fetching as many as 200 ducks per day for market hunters. At night, he’d guard his boss’s boat and equipment shed. The rough baymen had little time for formal training. Dogs that learned quickly, on the job, got fed. The rest didn’t live to pass on their deficiencies. Those old killers are long gone, but they left behind something of themselves in these big, tough, workaday dogs. Any wonder that in addition to being the toughest retriever in the world, the Chessie is a little independent and protective?

If the Labrador is the sports car of the retriever world, the Chessie is the heavy-duty pickup. Males measure 23-26 inches at the shoulder and run 65-80 pounds; females weigh 55-70 pounds. The coat is short, dense, and oily, with a thick woolly undercoat. The Chessie has no peer when it comes to breaking ice or working for hours in the coldest water.

DO
Consider only working bloodlines.
Seek advice from experienced Chessie owners.
Watch a trained Chessie work before buying a pup.
Make your pup a member of the family.

DON’T
Resort to harsh discipline. Chessies can be temperamental.

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For Sale: Colorado’s Dallenbach Ranch

Eric OKeefe — Tue, 08 Mar 2011 19:00:56 +0000

Spring 2011 Pricing Update: Colorado’s 130-acre Dallenbach Ranch now offered for $21 million.

The year was 1973, and Wally Dallenbach’s racing career had shifted into high gear. Thanks to back-to-back-to-back wins for Patrick Racing on the Indy car circuit, he had the opportunity to fulfill his dream of buying a piece of property in Colorado. And as Peppy Dallenbach points out, it was definitely her husband’s dream, not hers. “I was perfectly happy back home in New Brunswick where our families lived,” she says.

Years before, however, Wally had promised himself that he and Peppy would make the Rocky Mountains their home. The seed had been planted in 1960 on their honeymoon when the couple made a stop in Aspen. “It was all hippies and dogs back then,” Wally says. The New Jersey native was already making a name for himself as a drag racer and a stock car racer; his open cockpit racing days were still to come. But already he knew that he had fallen for the small-town charm and scenic beauty that can be found a short drive down just about every road that crisscrosses the Colorado Rockies.

It would take more than a decade to fulfill that promise, but he finally closed on a beautiful old homestead just outside of Basalt in 1974. Thanks to more than half a mile of frontage on both sides of the Frying Pan River, a dozen cabins dotted its 100-plus acres. Known to anglers as the Wooden Handle, the breathtaking encampment had also served as base camp for hikers and hunters who roamed the millions of acres of the White River National Forest bordering the property.

“Growing up on the ranch was like growing up in Disney World,” says Wally Dallenbach Jr. Like his father and his brother, he pursued a career in racing, and his training ground was the mountains and valleys surround his family’s ranch.

“We rode dirt bikes in the summertime. We rode snowmobiles in the winter time. There was everything a kid could want to do. It was a great place for my sister and brother and I to grow up,” he says.

In the 1970s, Basalt was nowhere near the cosmopolitan getaway is has since become. Paul Dallenbach recalls “a whopping 400 people” living there when the family first arrived, and going to Basalt High School had nowhere near the cachet of archrival Aspen High School. “That’s all right,” he says. “We beat them in every sport they played.”

Like many overachievers, Wally brought his work home. In his case, it took the form of a Honda 350. One summer day, he loaded Wally Jr. on the back of that dirt bike, and the two took off for a great old mining town called Ouray. The next day father and son went over Engineer Pass to Lake City. If this sounds like too much fun, now you know where the Colorado 500 got its start. Since 1976, the charity ride has raised more than $1 million for the Red Cross, area schools, churches, and hospitals, and countless other beneficiaries. A Who’s Who in racing has showed up to ride, including Parnelli Jones, Rick Mears, Roger Mears, Roger Penske, a whole host of Unsers, and of course all the Dallenbachs.

A disappointing number of sports stars plow their money into poor investments. Not Wally Dallenbach. In the early 1970s, the legendary Indy car racer took his winnings from the California 500 and bought an absolutely stunning piece of property along the banks of Colorado’s Frying Pan River just outside Basalt. In the 35 years since then, Wally and his wife, Peppy, not only raised a family but they also bettered the lives of thousands of Coloradoans through their own amazing race, the Colorado 500.

After 180 Indy car races, Wally’s career behind the wheel took a sharp turn; for the next 23 years he would serve as CART’s chief steward. Since his retirement in 2003, he and Peppy spend as much time as possible following the fortunes of their grandchildren. Although Paul and his wife, Dana, are right next door in Basalt, Wally Jr.’s family is in Texas and Colleen’s is in Indianapolis. Convenient airport connections have become a top priority.

With that in mind, the Dallenbachs decided to sell the ranch. Mark Weida, a suspension specialist who has worked on racing cars for 30 years, introduced the couple to Chip Lenihan, a great wit who proudly describes himself as “the last Republican mayor of Telluride.” In addition to being a longtime ranch broker, Lenihan had another equally important qualification. He is an avid fly-fisherman.

The Fay Ranches broker sees enormous upside. “The right investor can acquire this incredible piece of property and then recoup a substantial percentage of the purchase price with a conservation easement,” he says.

Another big plus is the ranch’s Eagle County setting. “You’re right next door to Pitkin County, which is probably the most restrictive county in the Colorado. Everything from subdivision to structure size is strictly controlled through the county planning process. Eagle County also has a comprehensive planning department, but it is much more private property rights-oriented and much more smart growth-oriented,” he says.

One final attribute stands out. Says Lenihan, “It’s the lower part of the Frying Pan, so you’ve actually got a mix of trout that migrate up from the Roaring Fork. There are all sorts of little shallows and ripples, and there’s one deep pool that’s always good for a 20-incher.”

Try putting a price on that.

Take a tour of this one-of-a-kind property HERE.

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On the Block: 170 Acres in Marion County, Illinois

Grant Gannon — Fri, 19 Jun 2009 07:00:10 +0000

Update: The complete tract of land went unsold during the brief auction. The first tract at 50 acres was passed on at $120,000, the second tract at 40 acres was unsold at $96,000, and the third tract at 80 acres was unsold at $192,000. A combination of all three tracts was passed on as well.

170 acres, broken up into three tracts of 50, 40 and 80 acres, goes on the block Saturday in Marion County, IL. The land can be used both for hunting and CRP income. Buy A Farm Land and Auction Co. will host the bidding.

The minimum opening bids on the property start at $2,400 an acre.

Located on Blackburn Road, 15 minutes from I-57 in Centralia, the property could be a solid buy if you happened to scoop up all three parcels. Each has a decent CRP income; they total about $6,500 per year. According to the listing, deer abound on the property.

This would make a nice long weekend retreat for hunters in St. Louis or Chicago.

Bids will be taken at the Iuka Grade School or online. 10% down is required at the end of the auction with the balance at closing.

No related posts.

For Sale: Montana’s Sun Ranch

Grant Gannon — Tue, 28 Apr 2009 17:27:40 +0000

The jury is still out on my definition of dream property, but I’ll tell you this: Montana’s Sun Ranch is definitely in the running.

Nestled on 18,000 acres just outside of Yellowstone National Park in the Madison Valley, the Sun Ranch ranges from 5,700 feet to over 10,000 and is a sterling example of what a true steward of the land can do with a spectacular piece of property. Almost 100 percent of the ranch is protected by conservation easements.

Three creeks – Sun, Moose, and Wolf – nurture more than a mile of the Madison River, which weaves its way through the property. Needless to say the fishing is out of this world. Elk, deer, bear, antelope, and sheep cross this country going to and from Yellowstone. Throw in a beautiful main residence, and this prime parcel is for sale at $55 million. Fay Ranches has the listing.

According to New West,the owner, Roger Lang, is looking to unload the ranch and free up capital for other conservation projects. According to the article, it looks like he has in mind a development similar to what Russ Maytag has done in Colorado at Maytag Mountain Ranch.

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15 to 30 Percent ROI on Arkansas Land?

Grant Gannon — Mon, 03 Nov 2008 12:00:53 +0000

Hunting land isn’t just for birds, especially in the South. From the Mississippi Delta to the rice fields along the Gulf Coast, land with waterfowl has long been a great investment. Some investors buy and sell these tracts purely for speculation, and others for Mallards and Gadwalls. The really savvy do both.

West Tennessee and Eastern Arkansas, along the banks of the Mississippi River, feature duck hunting at its finest. Need some proof? Then head to Stuttgart, Arkansas, population 9,376, and home of the World Duck Calling Championship. Now you a believer?

If facts and figures matter, then check out this article in the Memphis Daily News, which highlights investors who are focusing on rich Arkansas river bottom. Jeff Barry of Barry Properties in Memphis started buying and selling land in Eastern Arkansas more than 20 years ago. With two hunting-hungry metropolitan areas – Memphis to the east, Little Rock to the west – and nothing but flat undeveloped land in between, Barry started buying and selling prime hunting land instead of developing subdivisions in suburban Memphis.

While the residential market in Memphis (and everywhere else for that matter) stagnates, the demand for land where people can hunt at dawn and still be in the office in time for a morning meeting continues to grow. Being familiar with the area, I can attest to the fact that one bag his limit in Arkansas and make the easy drive across the I-55 bridge to downtown Memphis with plenty of time to spare.

Memphis-based Ducks Unlimited, a conservation organization whose aim is preserve and improve waterfowl habitats nationwide, works with Barry to place conservation easements on the property to reduce the tax burden on properties as well.

The returns? Barry tells the Memphis Daily News he’s seen year-over-year returns of 15 to 30 percent. He even recounts the story of one buyer who purchased a parcel and immediately sold it for a 25 percent gain. The investor then used his profit to purchase four more parcels, which he own to this day. That’s nothing to quack at.

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Hunting Land is a Hot Investment

Land Report Editors — Sun, 15 Jun 2008 07:00:00 +0000

Over the last decade there’s been a boom in rural land prices throughout much of the United States and parts of Canada. I say this not because of some government report or a recently released study but based on firsthand experience. I live in southern Iowa, and I have been buying rural land here since 1995. Back then I could little afford more than an old used pickup truck. Yet land was so cheap that I couldn’t say no.
BY BILL WINKE
PUBLISHED NOVEMBER 2007

To me it’s easy to understand how such price appreciation could occur within an hour of an Atlanta or a Portland. But southern Iowa? It’s just one of a dozen hot markets with seemingly little to offer buyers. What’s behind this boom? The answer is easy: hunters.

Hunters have proven that they are willing to drive the market in their quest to preserve a place that enables them to pursue their passion. In many cases, they’re doing it with capital gains they are protecting by using 1031 Exchanges. In some ways, there is a sense of urgency—buyers jockeying around to get the good stuff and stake a claim to the best possible piece of undeveloped land—before it is gone. Here’s what hunters are buying right now and how you can profit from it.

What Hunters Want
Forget about the vast expanses of tillable land. That’s a whole different ball game. Farmland prices are fueled by a completely different set of dynamics: corn ethanol, soy diesel, major multinationals, and commodity pricing. This article is not about agricultural land. What I’m going to focus on is the seemingly worthless recreational land that has very limited income potential. That’s what hunters buy. In some areas, the price of rough ground is now exceeding the price of tillable land for the first time in history.

Don’t believe me? A friend of mine just sold his hunting farm for $3,000 per acre about a month ago while the best pure tillable in this area sells for about $2,300 per acre tops. Areas like Pike County, Illinois, and Buffalo County, Wisconsin, see this regularly. It is most common in regions where the tillable land is mid-grade and the hunting lands are high-profile. That’s because the tillable is based on rate of return and the hunting ground is based on the desire to own it.

Factors To Consider
Not all rural land appeals to hunters. Primary considerations include proximity to like-minded neighbors or sanctuaries (the neighborhood), the composition of the land itself (how it lays), as well as size, access, and control. Possible improvements also factor heavily into a buyer’s decision. Income generation is typically a secondary consideration.

NEIGHBORHOOD. When analyzing hunting land, the neighborhood is the most important factor. It starts with the county. Focus on counties that border those with the highest-profile reputation. For example, some of the best whitetail hunting in America can be found in Houston County, Minnesota. You will generally find better values in neighboring Winona and Fillmore counties.

Buyer’s Checklist
No. 1
Scout the Neighborhood

No. 2
Learn the Lay
of the Land

No. 3
Buy the Right Size

No. 4
Confirm Access

No. 5
Ensure Control

No. 6
Consider Improvements

Now you need to get down to the individual tract. A broker friend of mine likes to categorize neighborhoods two ways: civilized and uncivilized. Civilized neighborhoods are much more attractive. But more than simply looking at the orderliness of the neighboring landowners, it’s important to find out what these neighbors are doing to impact the species in question. This is the biggie. Like-minded management of the resource is the key. Here is how it works.

Game is a shared resource. Every kind of game has an upper limit harvest tolerance before the quality of the hunting begins to suffer. If the neighbors are hammering every deer that jumps the fence, for example, the subject property is not worth nearly as much to a prospective sportsman than one in a management-friendly neighborhood. Also, today’s hunters are much more stewardship-minded than hunters in the past. They want to be able to effect a change in the maturity of the animals they hunt, to be able to maintain numbers compatible with the habitat, and to improve the overall health of the game they hunt. This requires good neighbors. I would much rather own a marginal farm in a great neighborhood than a better-looking farm in a marginal neighborhood.

Proximity to public hunting land is almost always a negative. The only exception is when the public land is obviously hunted very lightly or when the subject property is very small and serves essentially as a jumping-off point for hunting public land.

LAY OF THE LAND. The land has to look good. Here’s an analogy. If a house looks ugly from the road, it’s not nearly as attractive to a buyer even if it is spacious and has the right number of bedrooms and bathrooms. In the same way, the most valuable hunting land looks good relative to local options. Generally, the most attractive land possesses certain features. First is a majority of habitat. I personally like 75 percent timber/cover and 25 percent tillable land or CRP (Conservation Reserve Program) land. It also features terrain relief with ridges and valleys to create an attractive three-dimensional effect that most recreational buyers favor.

Rough topography also has a hidden benefit to the buyer. Acreage in rural land is not determined based on surface area but instead on the projection of the boundary of the property onto a horizontal plane. In other words, the acre count is not a three-dimensional record; it is two-dimensional, even though the property itself is three-dimensional.

Rough land has more actual surface area per taxable acre than flat land. This is why a buyer may sense that a property feels larger than the actual acre count. Terrain is a very relevant factor when analyzing hunting land. The type of habitat on the land is also important, but it only becomes a factor at the extremes. For example, a beautiful stand of mature hardwood timber adds value both aesthetically and financially to the next buyer. Nasty timberland made up of hedge and locust may detract from the value of the land if comparable farms in the area have better-looking timber.

SIZE. The size of the property also matters relative to the ability to manage the resource. For example, in white-tailed deer country a piece of property has to approach 2,000 acres with a mix of at least 60 percent cover before you begin to control your own destiny. With any smaller property, the neighborhood has to be good to enjoy maximum management success.

Size is also important when considering how much hunting pressure a piece of land can sustain. With the right mix of cover and open areas for feeding (again, I favor a 75/25 split), a property that is only 160 acres can accommodate two hunters for an entire season. But if the land is more open, typically it needs to be larger to produce the same quality experience.

ACCESS. For the most part, properties with limited access are worth less than properties with full, convenient access. In many areas, minimum-maintenance dirt roads are common. When the only way in to a property is a dirt road, the property is less valuable. When it rains, those roads are all but impassible—a big negative.

Avoid landlocked parcels like the plague (those properties that don’t include some form of access such as a county road or an easement across a neighbor’s property) unless you really understand the laws of the state regarding this issue and are up for a potential court battle to gain access. It is much better to make your offer on the landlocked parcel contingent on your ability to buy an easement from a neighbor than to buy the landlocked parcel as is.

CONTROL. Nothing is more discouraging for a new landowner than the battle to keep trespassers out of the property. There are two big red flags to look for when determining the potential trespass situation. First, if the previous owners were local (not absentee) landowners, there is a good chance the problem will be minimal. Second, check out the attitude of neighboring landowners. Stop in and talk to a few potential neighbors just to get a feel. Do just what you least want to do: Knock on the door and make a cold call. The reception you get will speak volumes. Will they keep their friends out of your property?

If you have the time and ambition, you can sometimes remedy a bad trespassing problem by simply being on-site often and letting everyone know that the situation has changed. If you can’t make that commitment of time and don’t have someone who can make it for you, it is best to walk away.

IMPROVEMENTS. Unless the property is a high-profile, high-dollar piece of land, you don’t want to spend time and money adding a lodge or cabin. It is too risky. Let the next guy—the end-user—build exactly what he wants, exactly where he wants it. I have seen too many deals fall apart because the potential buyer didn’t really want to pay for an expensive piece of lodging.

Other improvements, however, are critical to maximizing your return. In general, the trail system through the property should be very clean and passable under the widest possible range of conditions. If it isn’t, spend the money to fix it. Boundary fencing is also important. Establish the line and put in any missing fences so the next guy knows exactly what he is buying and has a greater sense of confidence that the neighbors will respect his boundary.

Again, sticking with the whitetail-hunting theme, nice, clean fields are also important. Ideally they are located in secluded locations. The future hunter wants to be able to plant food plots in as close to a true farming manner as possible. That means that you may have to clear a few overgrown fields, smooth them out, and have them professionally planted. That is a big step toward making the property look good and bringing it closer to finished status. Cover is universal; trails and fields sell deer-hunting property.

What Are You Ultimately Selling?
If you are considering an investment in recreational land, would you be happy keeping the particular tract you are looking at? If not, it is probably not a good investment simply because the things that turn you off will likely turn off the next guy.

THE EXPERIENCE. With recreational land, you are not really buying and selling land. You are buying and selling an experience. Keep this in mind. What kind of experience will someone have when hunting the property you are analyzing? Trespassers, contentious neighbors, poor management prospects, fence disputes, poor access, ugly views—they are all big turnoffs.

The best recreational investments have a secluded, natural feel. Remember, the way the place feels—the experience it produces—is the glue that ties all the other factors together. If it doesn’t feel good, walk away. I like it when the hair on the back of my neck stands up when I’m looking at a property. I know I have a winner.

ELIMINATE RISK. Not all recreational land buyers are sophisticated investors. They may not be good at due diligence. The very thought of dropping their life savings on a piece of dirt has them nervous to begin with. On top of that, throw in a few unknowns and it becomes very hard for them to pull the trigger on a purchase. Eliminating risk for the next guy is an important aspect of recreational land investing. Don’t buy something if you have doubts that you can eventually guarantee the experience through your own hard work, diplomacy, or money spent.

Final Analysis
If a tract of recreational ground meets all the criteria I have set out, in all likelihood you’re looking at a BUY signal. Of course, you also need to hit reasonably close to market price. Unless you plan on solving some major problems related to a piece of property—a costly easement issue, for instance—don’t expect to come across deep discounts in well-established markets.

A solid property at, or slightly below, market price is a better investment for an absentee landowner than one fraught with trespassing problems and projects. But if you have time to police the property and take on projects (improvements), you can make a better return by purchasing a diamond in the rough. This approach is a bit riskier and it will take more time, but the potential return is definitely better.

WHAT IS A 1031 EXCHANGE?
And why is it one of the driving factors behind the boom in hunting land values?
BY ERIC O’KEEFE

When Bill Winke writes that investors are driving the market for hunting lands “with capital gains they are protecting by using 1031 Exchanges,” what is he referring to? The answer is quite simple: one of the most sophisticated tools available to savvy investors buying and selling real estate.Sell a stock at a profit, and what do you get? A bill from Uncle Sam for the tax on your capital gain. But sell that same stock for the very same profit in your 401(k), and what happens to your tax bill? Uncle Sam postpones it. If you’re comfortable with this concept, then you have grasped the essence of a 1031 Exchange: a method to defer capital gains taxes on the sale of a property by investing the proceeds in like-kind property as detailed in Section 1031 of the Internal Revenue Code. Winke reports that he has already completed one 1031 Exchange this year and has plans in the works for two more. “I spoke with a Realtor recently, and he said that at least one-third [of] his sales involve a 1031. People have money to move …” he says, and clearly they are moving it into hunting lands.Oddly enough, this doesn’t always mean they are reinvesting profits from one hunting property into another. All real estate in the United States is considered to be like-kind as long as each property qualifies for the proper use. Mineral interests, a rent house, perpetual water rights, and hunting land can all be considered like-kind as long as they are being held for investment.These are just a few of the many specifics associated with a 1031 Exchange. Above all, remember these two words: Qualified Intermediary. This term applies to the independent party that actually facilitates the tax-deferred exchange. Anyone completing a 1031 Exchange relies on a Qualified Intermediary to explain the different types of exchanges—simultaneous, delayed, build-to-suit, reverse, and personal property—as well as the requirements for a valid exchange and the specific time restrictions involved.Are you the sort that likes to save a buck and do your own taxes? That won’t work with a 1031 Exchange. The Qualified Intermediary acts as a safe harbor for the funds and protects the investor from taxable consequences. The instant a taxpayer receives the proceeds from the sale of a property—actual or constructive receipt as it is called—any notion of a 1031 Exchange evaporates. Using that earlier analogy of trading stocks, it is now a transaction done outside the protective shield of your 401(k).

If a 1031 Exchange sounds like it might make sense for you and your portfolio, a good place to start is the Federation of Exchange Accommodators (www.1031.org). This professional trade association is made up of Qualified Intermediaries from across the country. Depending on the amount of hand-holding required, a simple exchange could range from $500 to $1,000 per exchange (more elaborate transactions can cost many thousands more). Winke reports that he paid $800 on his last exchange, and in his words, it was well worth it.

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