Buying our first forestland (almost)

Mapping software and aerial photos can help prospective purchasers of forestland to learn more about a parcel before they buy it.

I am a forester, by education and by practice. I previously managed 60,000 acres and also helped small forest landowners for years: answering questions, doing outreach, and trying to find funding to help relieve some of their regulatory burden. By all practical purposes I am well versed in the language and love of managing and having your own forest. But I am still learning.

My wife (Aimee) and I decided this year was our year to purchase our own small forest. What we found is the process is filled with anticipatory angst, excitement, frustration and greatness. The end state: we made an offer, but need to keep looking.

Angst and excitement
Aimee wanted a presentation on the property. At first we joked about it, but it was a really good idea and I enjoyed pulling together a convincing story about why this was a good investment for us. I had spreadsheets showing projected logging costs, log values, and net present value calculations (all things you can find online at DNR or the US Forest Service). I used ArcGIS to develop an aerial slide show starting at the statewide view and zooming in to the property. (You can download Arc Explorer for free.) I will tell you it is a fun way to be thorough, and also make sure your family understands the risks and potential rewards.

I know that most of the time a well-stocked forest will result in a return on investment at final harvest. Obviously there are many assumptions with this, but for the purposes of this story it is true. Our friends had found this particular 40-acre parcel near the coast. It was well stocked with 15-year-old hemlock, Douglas-fir, and scattered pockets of red alder. A large wetland/flood plain reduced the operational acres to around 25. They had been looking to purchase additional forest, and so over lunch we decided to partner on it. We were not going to be on our own, but the price was right and splitting it meant no need for a bank loan.

Getting loans on forestland has become more challenging since the economic downturn in 2009. This is especially true when the loan amount is relatively small in comparison to a typical home loan. The banks we use don’t even offer loans for purposes like forestland acquisition without a heavy interest rate. Previously, I had a representative from NW Farm Credit write an article about their AgVision program in 2009 for the Small Forest Landowner Office newsletter and I was lucky that it was still in the archives. AgVision helps first-time farmers and forest owners purchase land with reasonable conditions, but ultimately we decided that avoiding a loan was best.

We walked the property with a real-estate agent who specializes in forest property (Bruce Krieg at Kidder Matthews) on a dry and semi -warm February day. Everything was checking out and I was getting excited, but the access was across private industrial forest and there was no permanent easement. We decided not to write an offer that day because I wanted to check on the access issues. Buying property without legal access is potentially risky and in my opinion ill-advised. In Washington State we have laws dating back to almost statehood that ensure landowners can’t be unreasonably landlocked. I had done my homework and had clearly written out bullet points for my call to the private forest manager. It’s been my experience that most companies are reasonable in granting access when you are a small or large forest landowner and the access is for forest management purposes. (If you have other plans such as building a cabin or recreation site it will be much more difficult.) Even so, the answer was “No”.

I was extremely disappointed and frustrated in the outcome of my call. I used every term and statement I could think of to be reasonable including my last ditch effort of citing the law. We made an offer contingent upon a period to further evaluate the access options. The same day an additional offer was made. Now the clock was ticking. My lawyer was excited to take on the access issue and I was looking forward to co-authoring the forest management plan, getting the pre-commercial thinning lined up and doing what we all love to do, enjoy our small forests. Then the call came. The owner had accepted the other offer.

So it didn’t work out this time, but the search process was a great learning experience. Make it fun and if you don’t find the perfect piece right away, don’t give up.

I suggest a couple of simple things: Know what you want­—you will have many more options if you don’t really want to make money. Do your homework first—investigate the access, stocking level, forest health issues, and know what costs are associated with the management. Use the tools you have access to—Google Earth is a great tool to quickly assess the stocking level and get a bird’s eye view, DNR has water typing maps online, and your local conservation district or NRCS office will have soil maps (or go online). If you don’t know the basics, start with signing up for Coached Planning, check out the new online forest owner modules, or attend a Forest Owner Field Day.

Good luck, and maybe we will see you at the bidding table.

By David Bergvall
Washington State Department of Natural Resources