Land Project Management
What is Land Project Management?
WVLandCo companies provide comprehensive land services for land holding clients. Forestry, timber brokerage, land brokerage, land management & development, land income – ecommerce platforms and land technical services are provided as complete Land Project Management (LPM) for our clients. We take a holistic approach to managing land and forest assets and producing the income and cash flows from these assets for our clients.
We do this by analyzing each land resource segment and then producing the plan, management and brokerage to maximize the land resources working together towards the improvement of each other and the entire land asset. This maximizes return not just on one segment of land ownership, such as timber, but on all segments of the land. This grows the land asset value better and faster than conventional type forest management.
It’s a unique approach to land management. We help landowners get to the “Why do I own this land and what am I going to do with it?” It’s the management philosophy we employ by managing our own lands because it works.
Do I Need Land Project Management?
If your goal is to maximize your land and forest ownership then the answer is “yes”. The opposite of LPM is basically owning land and opting to do no management on it.
If your goal is to do things on the land and with the land then the next questions is “Why you own the land?” Getting to “Why” will begin to narrow your focus, plans and objectives, start to define the overall scope of your land project(s) and goals and allow you to put those plans and goals into action.
We call discussing your “Why”, the land discussion. This is the important discussion we have with new clients. It determines what major direction the landowner wants to go with their land and the best way to get there.
What are the Components of Land Project Management?
Client Account Tools
Land Asset Inventories
How to Implement Land Project Management
From the land discussion we help clients determine and start planning for what aspects should come first in regard to their goals and projects planning on the ground.
Below you will see an exhaustive list of potential land uses and objectives. We recommend choosing no more than 5 of these (or your own if not on the list) for discussion. These will form your management objectives. To start implementation of the land project we evaluate your management objectives in regard to the productive capabilities of the land for the objectives stated.
We then package and propose the bundle of services that are needed to accomplish the best, lowest cost, highest income results for the client. Usually these services are a mix of land analytics and data, inventory & appraisal of forest and timber resources, mapping, cost estimating for land improvements and a brokerage and marketing plan for timber, land, land income, leases, etc.
The client reviews the proposal and we work with them to fine tune the project and timeline. The paperwork is signed and we schedule to the field docket for the necessary field work to begin the project.
Results of Land Project Management:
A Real World Scenario
Here is a real world scenario of the results of WVLandCo Land Project Management for Joe P. Landower:
Joe is 55 years old, 10 years from retirement and owns 112 acres in Jackson County, West Virginia. He purchased the land 15 years ago on the open market at a fair market price. The tract is 80% forested (90 acres) and 20% open lands (22 acres) consisting of brushy, overgrown fields located on one ridge of the tract. The access road into the old fields is washed out and only accessible by 4WD vehicle during dryer conditions. Joe hunts the property a good bit with his two sons and two grand children. Other than cutting firewood, Joe and his family are only on the property during hunting seasons in the spring and fall.
The property is located not too far from Ripley and Joe knows that the land could be used and enjoyed much more than current and he has noticed land prices rising from sales of nearby well kept farms and woodlot tracts. Joe starts thinking about how he could start to improve his land and the costs associated with doing this. Joe has decided that he wants to concentrate on doing 5 things within the next few years. We call these Joe’s management objectives.
Joe’s top 5 management objectives are:
1. Generate enough timber income to be able to finance other land work on the tract, generate additional timber income in 10 years
2. Repair and upgrade the access road to the old field and build additional ¾ mile road to the second ridge
3. Convert 15 acres of old field to pasture for goats or cattle, convert 3 acres to wildlife food plots for deer and wild turkey plots
4. Build a goat/cattle barn from lumber from the property and other sheds on 2 acres of old field
5. Clear an additional 8 acres on second ridge for pasture/meadow conversion
Joe has talked to a few contractors in the area and estimates that the cost of these improvements to the land if he contracted it all out and purchased all materials at approximately $125,000 at today’s high costs for materials and labor. This is much more than Joe can afford to put into the land out of pocket or borrow the money for.
Joe contacts WVLandCo for a discussion of his plans. WVLandCo prepares mapping on the property that shows much of the lay, topography, past land use, forest stands, open lands and current access on the property. Initial office mapping analysis was positive for the tract. WVLandCo visits the property to the initial reconnaissance, meets with Joe and puts a proposal and plan forward for Joe to consider. Joe likes the plan and agrees to move forward with the WVLandCo Land Project Management (LPM) contract. The plan went as follows:
The timber was evaluated with a Timber Inventory & Appraisal report provided by Kanawha Forestry. It was determined that 85 acres of the 90 forested acres contained marketable hardwood and pine timber with a current market valued estimated at approximately $127,000, when competitively offered on the market by Kanawha Forestry.
A cost savings estimate of $35,000 materials and labor was prepared by WVLandCo to estimate the reduced costs for the following land work if included as additional terms in a timber sale agreement:
1. Construct some of the planned access road during timber harvesting
2. Upgrade the existing road during timber harvesting
3. Seller be able utilize a portion of the pine logs for barn and shed lumber
Additional cost savings of $12,000 were determined to be saved on land clearing and wildlife food plots to be conducted during the timber harvest for a total cost savings of $47,000. With this savings estimate Joe decided to scale back on the barn plans and build his scaled back barn and sheds himself for a labor savings estimate of $20,000. Joe now stood at a total of about $67,000 is savings and opted to sell approximately $60,000 worth of timber on about 40 acres to cover the remaining costs of land clearing, road construction, food plots and site work for the structures.
Kanawha Forestry prepared the timber and bid it out to industry. The high bid price for the timber came in at $82,000 and included the land improvement terms Joe had asked for in the timber sale. Joe entered into a contract with the timber purchaser and a contract with WVLandCo for services to be provided after the timber harvest was completed for road construction, site clearing, site preparation for barn and sheds, and milled lumber for a cost of $50,000 saving an additional $20,000 over other contractor quotes for the same work and buying lumber retail.
Bottom line: For a land project that was originally estimated at $127,000 with no cash to invest in it and no intention to borrow money to do the work, Joe working with WVLandCo on this land project cleared $32,000 to the plus side and was able to achieve his 5 objectives for his land. In real terms, this project made and saved Joe over $160,000 in project costs and we’re not done yet.
In addition to the money made and saved, WVLandCo provided land value comparisons for the area that by doing these land improvements Joe had added approximately $1,000 per acre of land value for an additional $112,000 of estimated land asset appreciation putting Joe to the plus side approximately $270,000 with no loan and very little money out of pocket.
This example does not include management fees and taxes but it is a representative example of what can often be accomplished with good planning, information and a good land management team. By leveraging 40 acres of timber with a timber sale plan and property development goals, Joe was able to come out $270,000 on the plus side with the more valuable, useable, enjoyable and marketable tract of land he had envisioned a couple of years earlier. With the savings and extra cash on hand, Joe decided to keep investing in his land and acquire more land around his.
Joe’s next land project management objectives included
1. Acquiring an additional 100 acres around his tract
2. Start generating income from his new goat farm operation
3. Generate some lease/rental income from his land
4. Build additional access roads and hiking trails
5. to plan another managed timber harvest on 47 acres
Keep in mind that every tract of land is different, the marketability and value of timber on tracts can vary significantly and every landowner’s objectives and timelines vary. Current land access conditions are a critical component of all land management and land projects.