First and foremost, ignore the logger that contacted you. Just do not do business with him. You need to educate yourself, as you are doing by asking questions. Take your time with timbering because you are only going to get ONE chance to get this right. You might make quite a bit of money. If you do it wrong, you can loose quite a bit of money. I have had very smart coworkers who sold timber to a guy that knocked on the door and they really got ripped off.
Get a forester/timber agent that works for you. You might have heard this already. :laughing::laughing::laughing:
The forester will work on commission so the more you get, the more he gets. Check references. The first forester we talked too, two guys working together, sent me some documentation that had a virus. The virus was to see if I had opened and read the document.

My virus scanner caught the bug. I emailed them and just mentioned that it looked like the document had a virus and they should check their system.

We did NOT do business with them.
Check you state extension office, if you have one, and the state forestry department. They should have quite a bit of information to help you. Our local NC Extension office has tax seminars every few years for land owners to attend. Have you thought of taxes yet? You better start thinking about taxes.
Your forester needs to "cruise" your timber and provide you with an exact inventory of your trees. This should be tree type, size and total tree volume. We have a count of every tree that was a given diameter(DBH), and the estimate of the board feet in that tree. EVERY Tree was counted and a blue slash was painted on the tree at DBH and on the stump. After logging, I could see if they tree had been marked and thus payed for because of the paint on the stump.
The forester needs to tell you the inventory of your trees that goes back to the day you bought the property. This is your basis which is very important. You will pay taxes on the value of the trees that has grown from the day you bought your property and trees until today. That is your basis. If your trees are 100 years old, and you bought the land and trees 10 years ago, you only have to pay taxes on the value of trees grown over the last 10 years. It is best to have the timber cruise done when you buy the land but many people do not know to do this. However, the forester can estimate the tree growth from the time you bought the land/trees until the date of sale.
Your forester should help create a contract to sell the timber. In NC, this is a fairly standard contract, and it is like selling a land or house. Our contract specified certain things like staying out of certain areas, protecting the road, and following the the NC state Best Management Practices(BMP). The BMP has quite a few things that the logger has to follow.
The forester should monitor the logging operation BUT YOU SHOULD TOO! This is your land so you need to watch over them. Our timber guys were pretty responsible and I don't really have any complaints.
In our case, the forester put out the timber for sale in various places that would be noticed by timber companies. Timber companies came to our place and did their own cruise to make sure our forester's inventory was accurate. Our timber was sold one morning, just after dawn, from the tailgate of my pickup truck. :shocked::laughing::laughing::laughing: One of the dangdest things I have ever done!



We had a close bid auction. The timber companies showed up, there was about 12-15, and they handed over envelopes with their written bid inside. We went to my tail gate, opened the envelopes, took out the bits and sorted them from low to high. High won the timber. :shocked::laughing::laughing::laughing: We shook hands, had the lawyers draw up the contract and went to a closing just like buying/selling a house. We had a time frame in which they had to log the trees, which I think was two years, and was a standard time frame. If they had not taken the trees in two years, the trees were ours again and we kept the money.

They logged immediately. :laughing:
Is your land, or can your land, have a timber valuation? Because of the logging and the timber inventory, I was able to create a timber management plan and get a timber valuation for our land which lowered our property tax buy about 90-95%! I did this after timbering when the country did a new valuation and our land value went up 500%! :shocked: The forester can help with this as well. The state forester would have done the plan for me but he had a long list of people ahead of me so I did it myself. The tax assessor said I had one of the best plans he had seen. :confused3: Go figure. :confused3:
Timber taxes is clear as mud. I had to do quite a bit of reading because timber taxes are clear as mud and we had a very unique situation. Again, the forester should be able to help with timber taxes and/or recommended a tax guy to use. I talked with quite a few tax people and after doing quite a bit of reading I knew more than they did about timber taxes. This was SCARY to me. :laughing: I suspect if I had asked around a bit more I could have found a tax guy who knew timber taxes but I just said what the heck, I know what I am doing, and if I flub it up, I flub it up. :laughing: I did get a notice from the IRS but nothing every happened. I suspect there are only a few timber tax specialists at the IRS and they are busy going after the million dollar operations and not mine. PLUS, I think my taxes were down right. :thumbsup: Again, the NC Extension office has classes on this subject as well as documents on timber taxes so hopefully your state does as well.
Reforesting? Do you want to plant seedling after the logging? The state and forester can give you information on how to do this both physically but money wise.
How much is are your trees worth? Is the value at a high or low point right now? SHOULD you sell right now or should you wait? YOU MUST FIND THE ANSWERS TO THOSE QUESTIONS! In NC, the state tracks the timber prices for hard and soft woods for different regions of the state. Hopefully, your state does the same thing. Look at the trend for timber prices in your areas and judge if it is a good time to sell. Selling timber is also very localized not only by state but by region and locality so do you homework. The forester aka timber agent can help with this but I like to have my own information from other sources. Trust but verify.
TAKE YOUR TIME DOING THIS. You get ONE chance to do this right.
Later,
Dan