Quote from: floatyfish on February 27, 2014, 03:19:25 PM

Quote from: Branny on February 27, 2014, 11:10:05 AM

And there's nothing preventing us from getting into resource rights either in Ohio (Timber and gas are HUGE). I've got a couple of timber cruisers I can tap, and do have a few good oil/gas guys i'm in contact with as well.

I know we're getting further off the topic of housing and onto resource extraction and mineral rights, but now that you mentioned them I'm curious as to what the options for oil/gas would be. I know that DZ held a group buy on the forum that allowed accredited investors (aka people with really large amounts of BTC) to invest in an oil/gas company's fracking wells. Would there be even a remote possibility of something like that happening, but for those of us who are not accredited? I know the Marcellus Shale Formation extends from mid-Pennsylvania into Ohio, and with the winter being this cold and the price of nat gas spiking (well, returning to prices seen in the earlier 2000's Roll Eyes

), wells that weren't really economically viable before might start becoming viable again.

PS buying some more IPO shares to give you more cashflow for houses/resources/beanie babies/whatever.

The shale formation is right about where we are located (At worst, one county away). Fracking is a HUGE thing here, and I know of locals who have become rich overnight due to granting fracking rights on their properties to mid-sized oil companies.

Oil & mineral is definitely on the menu in a few years, however I would prefer to look at farming and timber rights before. I've sat down with a local farmer going over some numbers to confirm whether one of my strategies would work and he agreed wholeheartedly.

Farmers hate the idea of mixed use/subdividing land. There are quite a few properties I've found that have say 100 or 200 acres, but also have a nice big house (Or multiple houses) on the lot.

For instance...

2 relatively nice houses on one lot, said lot is 120 acres with 20ac of woods, the rest being tillable. Purchase price on the property is $650k.

Well, right off the bat, it's pretty well known that 100ac of tillable land is EASILY worth $400k as long as it's not flood plains. So, then you need to start considering the property. Farmers won't even consider it because it's 'too much work' to deal with the houses, I've actually seen farmers tear down brand new homes on properties just to recover an extra acre or two of land.

So, in the above situation you valuate the houses. House A is worth $100k and house B is worth over $200k with 10ac of land.

So you subdivide the property in 3 parcels - 100ac for farmland & access, house A with say 3 acres, house B with 17 acres. Sell house A & B and get $300k out of them, leaving you with 100ac of farmland at an expense of $300k. Even marginal farmland is worth $400k, so you do some digging and figure out if you can sell say 30ac off to an adjoining farmer for $6k/ac (Or you could sell off frack rights for $1k/ac). You would end up with $6k*30ac = $180k from said lot, which pushes your total cost on the remaining 70ac down to just $170k for 70ac of good farmland. Good farmland will cash rent for $250/ac per year which ends up at $17.5k/ac, or a little over a 10% return, no taxes or insurance are figured in because they're non-factors for farmland. Not a ton of work in the project, but you end up with good farmland for as long as you want. Farmland is always a good thing to have as it hedges real estate bubbles pretty well.

This exact scenario also plays out for timber rights, with the property being HEAVILY loaded on the front end for a one-time timber right cashout. Timber takes 20-30 years for the good stuff and 5-10 years for the cheaper woods. 100ac of quality oak could bring in easily $500,000 in profit in just one month, and i've seen *some* cases where said land only sold for $200k or less, or an instant-profit of $300k for a few months of work. Then you could take the land and either replant for another harvest in the future, or sell off rural acres for recreation.