What RLI Is All About – A Personal Story

Our daughter, Jess, and her husband, Brian, are Air Force and were being transferred from Maryland to Texas for a brief six to nine month period. Her husband was stationed in Alabama for three months prior to that and our daughter and 19-month old grandson lived with us during that time period. Jess was responsible for finding a rental home in Texas.  She had planned on making a two to three day trip for house-hunting, signing a lease, etc.

Just like everyone else, we started with online searches for rentals.  No sooner would we find something that looked ok, we would call and find out it was already rented.  Consequently, I recommended she not make a trip and save the $1000+ for a house-hunting trip that would probably end up being wasted time.

So, next steps – Mom to the rescue, as I am an ALC and can network with other land REALTORS® all over the country.  A search through RLI’s Find a Land Consultant tool helped me to find someone in the area that Jess and Brian were being transferred to, and a call was made to RLI Member Michelle Rushing, an agent with United County/M & M Ranch Land Investments.

Michelle was super to work with! From providing information on available rentals and information on rentals we asked her about to even answering texts and emails when she was away from the office at a class! Then, Jess finally found a rental that looked promising and was available; completed the lease application, etc., but the leasing company wouldn’t finalize the lease until she walked through the house.  Creativity again by Mom, I called the leasing company and asked if a proxy could walk through the house on our daughter and son-in-law’s behalf. The company said yes. So, I placed yet another call to Michelle, who graciously agreed to do this for us. She provided great information on the home, the neighborhood and surrounding area, and Jess and Brian were able to move forward with the lease!

I cannot say enough about the willingness of Michelle as an RLI member. I later discovered Michelle had just joined RLI two weeks prior to my call, and she was impressed that she had already received a referral call from the Find A Land Consultant on the RLI website, just because she had invested in being an RLI Member! This to me is part of what RLI is all about – networking, helping each other, and trust in each other… even when members may not have met each other before.

Special thanks to Michelle and I hope to meet her at an upcoming RLI class or event!

About the Author: Terri Jensen, ALC, served as the 2015 RLI National President and is currently a Broker with National Land Realty based out of Minnesota. Of 18,000+ REALTORS® in Minnesota, Terri is one of only 14 to have earned the elite ALC Designation (Accredited Land Consultant).  This designation, through the REALTORS® Land Institute, requires rigorous experience, education, and expertise in the areas of real estate, auction, appraisal, 1031 exchange.

Should I Invest in Timberland Real Estate?

I’m often asked “Should I invest in timberland?” and “If I invest in timberland, is it better than investing in stocks, bonds, farmland, etc. etc.?” My answer is generally “It depends” because the term ‘better’ is almost always subjective… What is better for one investor may not be for another depending on end goals. Understanding the basics of how to establish and achieve your goals in a timber investment is paramount.

Timing Your Investment Goal

We all want our investments to grow in value and make us wealthier, and timberland is just that… a growing investment (pun intended). It enjoys stable, steady growth, paying no attention to the volatility of today’s political world, and that is one reason why many of the wealthiest people in the world invest in timberland as a method of diversification and asset protection. Annualized returns range from 6-20% in my experience, sometimes more, with many factors weighing in, almost all of them related to the demand of the local timber market equally or greater than the actual land related aspects like site quality and stocking.

But, while well stocked and managed timber stands grow in size and value each year, unless you acquire a sizable portfolio, cash flows may only come every 3-7 years after reaching a merchantable size. So, when deciding to invest in timberland, it’s important to be able to service any debt obligations during those periods between cash flows and before buying, understand when you’d like to receive the bulk of the cash flows that will come during the timber’s “rotation” (financial lifetime of the stand). For example, if you intend for your timber investment to pay for your 3-year old child’s college fund, it may be wise for you to buy a well-stocked tract of pine plantation that’s 1-2 years old. This should enable you to buy more acres at a lower price, and those stands should be reaching a merchantable status as your child approaches 18 years old. That plantation will generally see 3-4 thinnings between the age of 15 and 30, all the while graduating into more and more valuable product classes through the process referee to as “product change,” until you ultimately clearcut and begin the process again.

But, if you’d purchased the wrong age class of timber, you may have missed your income window and had to come out of pocket or borrow money while you waited on the stand to mature. Please note: The merchantable age of a stand is subject to several factors, and the age of clearcutting and when you thin may change based on your objectives. The ages of 15 and 30 are just commonly seen benchmark ages in the southeast for private landowners. Finding the right timberland tract for your goals is key to success as an investor in this type of property.

Define Your Management Strategy

Elaborating further, a critical part of investing in timberland is having a successful management strategy. Are you managing for money, for wildlife, or a balance of both? They don’t have to be mutually exclusive, but you’re also not growing trees for future harvest(s) inside those huge food plots you installed to hunt monster bucks and turkey in. So, before or after you buy a tract of timberland, enlist a true consulting forester that acts as your fiduciary, working purely for your best interests, in order to help you establish the best management plan for you. We have many forestry consultants on our team that work hand in hand with landowners looking to balance timberland investment and recreational use as well as landowners looking for pure economic return. Whatever your objectives, without a sound timber management strategy in place, you will leave a lot of money and time on the table.

Another major driver in timberland returns, and possibly the most important, is competition. Timber and the product classes that it consists of are commodities, and the value of those are greatly affected by supply and demand. As such, you want your timber investment to be located in an area with a high concentration of mills that compete for the product classes your timberland will produce, generally within a 60+/- mile hauling distance of that market area (commonly referred to as your “wood basket”.) If you purchase timberland in an area with only a single or few mills, demand for your timber will likely be low and local supply will be high, so the timber prices paid will generally be dictated and depressed rather than driven up by market competition, which negatively effects your returns in both the short and long term. And, once it’s time, it’s harder to sell timberland in an area with consistently low timber prices.

In the past, I’ve elaborated on the importance of site index, site prep and planting, and the many tax advantages of owning timberland vs. other investments, such as basis depletion, a multitude of deductible capital expenditures, long term capital gains treatment, and conservation easements. But, one of my favorite attributes of timberland is how tangible it is vs non-land investments. Timberland is an investment with roots than run deep, providing an opportunity for you to manage your timberland in a way that allows you to spend time with your friends and family outdoors, teaching them about the blessings bestowed upon as land stewards, and the ability to leave a legacy behind that your loved ones can benefit from for generations to come. That kind of return is beyond measure.

This post is part of the 2019 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners. For more posts like this, click here

 About The Author: Clint FlowersALC is a top producer with National Land Realty, a member of the REALTORS Land Institute of Alabama, and a member of the 2018 Future Leaders Committee.  He was a NLR Top Producer Nationwide in 2016 and 2017. He also won the 2017 APEX National Broker of the Year award for Timberland.

 

land real estate agent

What You Need To Know About Choosing The Right Real Estate Agent!

Whether you are buying a house or selling land, it is one of the biggest things you will ever do in your lifetime. Therefore, choosing the right real estate agent is crucial. You may ask, “How do I choose the right real estate agent?” Here are some things to look for or consider when making that selection.

  • Trustworthy: First and foremost, you need to feel completely comfortable talking with your real estate agent. Choose someone you can relate to because you will be spending a lot of time with them. Make sure they feel real to you and most importantly, trustworthy. You want someone who is experienced, ignore all the flattery and promises. Finding a trustworthy agent can go a long way in ensuring your property sells at top dollar or that you’re buying at the best price in the market. Don’t go with an agent who promises you the highest price for your property, find one that has a proven track record of success and the skills needed to get you the highest price. Don’t ever be afraid to ask agents for testimonials or referrals from their past clients to make sure they check out.

  • Expertise: People use the terms REALTOR® and real estate agent interchangeably, but they are not the same. Not every real estate agent is a REALTOR®. REALTORS® are members of the National Association of REALTORS® (NAR) and subscribe to the REALTORS® Code of Ethics. This Code is strictly enforced by local real estate boards. The standards that they uphold and adhere to are much more restrictive and confining to conduct than those state guidelines governing agents who simply hold a real estate license.

Take it a step further and choose a REALTOR® who is a member of the REALTORS® Land Institute (RLI) as they are experienced professionals that specialize in land transactions. If you want the best of the best in the land real estate business then you need to choose an Accredited Land Consultant (ALC). They aren’t just land sales professionals, they are the most prestigious, experienced and highest performing land sales experts in the country. They have a proven track record of success in completing land transactions and are certified to have completed over 104 hours of education courses in conducting land transactions.

  • Connections: Having a good network of other agents in the industry can help sell a property faster. They can also help provide their clients additional value because they may know an expert in everything from conducting 1031 Tax Deferred Exchanges to conservation easements. If they are not exactly sure about something, they have a national network of land agents they can easily reach out and connect with to help make sure their clients are getting the best value out of their property.
  • Tech Savvy: Technology advancements in the industry have provided more tools for real estate agents to remain connected while on the go, which is especially important in fast-paced market places. At the same time, these changes have also raised the bar for what it means to be a good agent. It’s no longer about possession of information, but about being able to translate that information into useful insights for buyers and sellers.

Looking back 15 years ago, the real estate market was a different animal, information-wise. It could take hours trying to find old documents and records that were buried in folders. It put buyers in a much different place than they are today. Not only do you get answers to simple questions much faster, but you can also get any document sent to your email without leaving the comforts of your home. With today’s technology, you can access detailed property records right from your smartphone. There is more transparency for consumers, making them feel empowered during a real estate transaction.

Technology enables agents to deliver more value through new and innovative ways to connect and communicate with their clients. Having software, along with apps and tools at their disposal gives them an edge in today’s market. These tools take the “grunt work” off the agent’s plate so they can spend more time building relationships with their clients.

Make sure to also take a close look at how the agent is marketing other properties and ask how they plan to market your property. Are they using a website, social media, and digital ads? Do they have brochures or information packets available? Is there an MLS listing? Drone footage? Property maps? Is there signage clean and up to date? Using the latest technologies to market a property can help decrease days on market and increase the final sale price.

Finding the right agent takes balancing credentials and interaction. You want to choose someone you like. Keep in mind, not all real estate licensees are qualified to assist you in buying or selling land. Their license may make it permissible to practice, but their inexperience in land transactions could be costing you thousands of dollars and potentially getting you or themselves into legal trouble. Do your research, ask for referrals, talk with the agents’ recent clients, and do some interviews before choosing the best agent for your particular real estate needs. Don’t forget to check for license and disciplinary actions with your state’s Real Estate Commission. All agents are not all created equal. If it feels right after doing your research, vetting against the above considerations, and meeting with them, then they just might be the guy or gal for the job!

Looking for a land professional in your area? Use the REALTORS® Land Institute Find A Land Consultant search tool to find an agent in your area that specializes in conducting land transactions.

This post is part of the 2019 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners. For more posts like this, click here

About the Author: Wendy Forthun, ALC, is an Accredited Land Consultant with 1 Stop Realty Inc in Kasson MN. She specializes in farmland sales, management and 1031 Tax Deferred Exchanges.

Knowing The Difference Between 1031 Versus 1033s in Land Real Estate

As real estate professionals, we have a fiduciary responsibility to help our clients achieve their goals relating to real property. Often times, these goals revolve around maximizing the return the client will achieve either during the acquisition or disposition of their real estate assets. A valuable tool in this process is the like-kind exchange. This tool could permit non-recognition of a gain for tax purposes, allowing our clients to invest ALL of the proceeds from a sale into a new asset.

As land professionals, many of us encounter owners of raw land assets that generate very little cash flow, or worse, don’t have potential to generate income. The ability to sell this passive asset without any tax exposure and exchange into a cash flow asset such as an apartment building or net leased shopping center is a power motivator that can in many cases, substantially increase our client’s income and positively impact their lives.

As investors, it is imperative that you seek the guidance of your tax advisor, a Qualified Intermediary (QI), and a real estate professional well before considering a disposition or acquisition to ensure the transaction is structured appropriately to achieve your overall financial goals.

What is a 1031 Exchange?

Since 1921, Internal Revenue Code (IRC) Section 1031 provides for the opportunity to defer payment of capital gains tax liability by reinvesting the proceeds from the sale of a relinquished property into another similar asset. There are many nuances to the code but generally, to exchange from one asset to another, the proceeds of a sale must be reinvested into a “like-kind” property. “Like-kind” refers to the character of the asset, not the quality. For example, property purchased and held for investment purposes may be exchanged for another investment property. The properties can be land, apartments, or different so long as they are both held for investment. Conversely, a primary residence being sold and exchange into an investment asset would NOT qualify. So long as the process is followed, the taxes are not eliminated but payment of the taxes is delayed until such time as the gain is realized when the acquired asset is sold, without being exchanged further.

This does not require an investor to trade their real estate straight across or sell their relinquished property and acquire a replacement property at the same time.  By using a QI, investors are given a certain period of time to complete the acquisition of their replacement property.

What is a 1033 Exchange?

Similar to IRC Section 1031, Section 1033 provides for non-recognition of gains and deferral of the tax liability. The primary difference is that a 1033 exchange can be used only when the property is being relinquished through a “forced-conversion.” Examples of “forced-conversion” would be taking by eminent domain or loss from a natural disaster, even if insurance proceeds are received.

While similar, there are distinct differences between the two.  Below are highlights of some of the rules and how they differ between the 1031 and 1033 exchange.

 

  1031 1033
Use Exchange of real property held for productive use in a trade or business or for investment. Exchange of property compulsorily or involuntarily converted as a result of eminent domain, destruction, or theft.
“Even and Up Rule” – Equity Equity in the replacement property must be even to or greater than the net equity of the relinquished property.

 

Equity cannot be replaced with additional debt.

Cost of the replacement property must be even to or greater than the net proceeds received.

 

Equity can be replaced with additional debt.

“Even and Up Rule” – Debt The amount of debt on the replacement property must be even to or greater than the amount of debt relieved on the relinquished property.

 

Debt can be replaced with additional equity (i.e. cash).

The value of debt on the replacement property must be even to or greater than the value of debt relieved on the property converted.

 

Debt can be replaced with additional equity (i.e. cash).

Replacement Property Criteria Like-Kind Similar or related in service or use
Notification Period Within 45 days of the disposition, must notify the Qualified Intermediary of the potential replacement properties. Identification of potential replacement properties is not required.
Timing Within 180 days of disposition, escrow must close on all replacement property. Within 2 years from the end of the first tax year in which gain is realized, escrow must close on all replacement properties. Special rules extend this period to 3 or 4 years.
Vesting The same taxpayer that sold the relinquished property must purchase the replacement property. The same taxpayer that sold the relinquished property must purchase the replacement property.
Improvements Exchange funds cannot be used to improve land already owned. Conversion proceeds can be used to improve land already owned.
Related Parties In most cases, the replacement property cannot be acquired from a related entity. In most cases, the replacement property cannot be acquired from a related entity.


Reverse 1031 Exchange

On September 15, 2000, the Internal Revenue Service issued Revenue Procedure 2000-37. This explains how to complete a “Reverse 1031 Exchange,” a scenario where an investor acquires the replacement property prior to selling the relinquished property. In this scenario, a QI (through a special purpose entity) will act as the Exchange Accommodation Titleholder, acquire and hold or “park” legal title to either the relinquished property or the like-kind replacement property during the exchange.  This structure is more expensive and complex than a traditional exchange and should be reviewed with a tax advisor to ensure the investor’s specific situation warrants use of this structure.

Tax Cuts and Jobs Act

Signed into law on December 22, 2017 The Tax Cut and Jobs Act took effect on January 1, 2018 and substantially modified the IRC. Specific to Section 1031, the act eliminated personal property exchanges, limiting the ability to exchange assets to only real estate. It is now titled, “Exchange of real property held for productive use or investment.” However, certain exchanges of mutual ditch, reservoir or irrigation stock are still eligible for non-recognition of gain as like-kind exchanges, if considered to be real property under applicable state law. 

State specifics and claw-back provisions

Particular care should be given to exchanges involving relinquished property and replacement property in different states. Many states have withholding requirements applicable to non-residents. Although most states allow investors to sell property in that state and exchange into property in another state and defer state taxes, some states have claw-back laws. Claw-back laws permit a state to recapture the state income tax when the out of state replacement property is sold.  To avoid potential double taxation, it is critical for an investor to research how the states they are dealing with treat these transactions.

This article is intended to be a primer on like-kind exchanges and highlight some of the nuances and considerations needed to successfully complete these transactions.  Nothing in this article should be considered tax or legal advice and any investor interested in learning more about exchanges should speak with their tax adviser and a Qualified Intermediary. 

About the Author: Matt Davis is a real estate broker with Cushman & Wakefield. He is based in San Diego, CA and assists clients with the disposition and acquisition of investment grade agricultural and transitional land assets. He is also founding member of the company’s Land Advisory Group and Agribusiness Solutions Team. Matt is a member of RLI and serves on their 2019 Future Leaders Committee.

Do These Old Land Rules Hold Up?

The business of buying and selling land is one of the oldest known to man. Over time, certain rules and sayings were established as the keys to success in the land industry. Some of those rules about land have stood the test of time, and some have not. For all the new land agents in the industry, we’re going to look at some of the most popular rules in the land industry to see if they still hold up years later.

1. Land Is Always A Good Investment

Yes – But Only For Smart Investors  

Investing in land has always been a great way to diversify your portfolio. Plots of land are often passed down generation to generation as a reliable investment. There are lots of great investment options depending on your level of risk and timeline, such as the “buy and hold” method or . Vacant land can give huge returns if held onto for the right period of time or improved.

However, investing in land is not risk-free, especially for people that aren’t land experts. There are more factors impacting land value (such as international trade, , and new land laws) than ever before. Unlike other investment options, land is not guaranteed to earn interest. If the land isn’t transitioned to its highest and best use or is not in high demand when it comes time to sell, you will lose money.

Many old rules about land investing, such as the importance of timing and being familiar with the market, still apply. There is a lot to take into consideration with investing in land, such as zoning, topography, taxes, etc. If you are not a land expert, be sure to work with a land professional before investing.

2. In-Person Networking Is Key To Success

Yes – But It Doesn’t Always Have to Be In-Person  

Nothing can replace in-person contact. As Jonathan Goode, ALC, with Southeastern Land Group said in his article Ten Lessons For Land Agents From A Decade In The Dirt, “20% of what we do is about land, and the other 80% is dealing with people.” In an industry where trust and people skills are the backbone of success, networking remains as important as ever.

However, for the first time in history, technology allows us to network, socialize, and promote ourselves without leaving the house. Social media has made it easier than ever to connect with people from the comfort of your couch. Platforms like Facebook, LinkedIn, and Twitter let you meet other professionals, advertise to potential and current clients, and learn about the latest land news. In-person networking might still be essential to success in the land industry, but social media allows us to stay connected as well.

 3. Timber Is A Good Option for Retirement

Yes and No

While many people generally agree on the benefits and drawbacks of investing in land in general, the rules of land surrounding investing in timberland have been much less sure. A Washington Post article called “Thousands of Southerners Planted Trees for Retirement. It Didn’t Work” sparked a debate within the land industry. The article follows a farm owner who diversifies his family farm by planting pine trees. He lost millions when the 2009 housing crash hit and resulted in the decline in pine prices.

Some read this article as a declaration of the death of timberland investing. Others argued that the article ignored the fact that the recovery of the economy resulted in lumber prices returning to their pre-crash values.

In his article “Is Pine Timberland Still A Good Investment?”, Jonathan Goode, ALC, wrote that both sides had good points. He notes the glut of timber in parts of the Southeast and that people did lose significant money, but that no investment is foolproof. People that invested in the stock market around the housing crash would have also lost a ton of money. He mentioned that even in the worst market, there is room to make money off of timber.

“The good news for small to medium-sized investors is that you can avoid some of the problems that have plagued institutional buyers,” says Goode. “Timberland Investment Management Organizations (TIMO’s) are given the difficult task of going and Finding a large package of timberland to Purchase on behalf of their client, Manage the fund for 10-15 years, and then sell with guaranteed returns.”

The meat of the Washington Post story is less about the history of timber and more about the unpredictability of the market. There are things you can do to make sure your land is safe, such as and , but there is little you can do about the market. With any investment in land or other asset, there will always be risk.

 4. Working With An ALC Is The Best Way To Buy And Sell Land 

Yes!

A lot of things change in the land industry, but some things never do. Working with an Accredited Land Consultant ensures that you are working with the best in the industry. They are land experts with an incredible network of other professionals, years of experience, top-notch education, and some of the hardest working people you’ll ever meet.  The ALC Designation has been around for decades (under several different names) and has served generations of land experts with the tools for success in the land industry.

As years pass, even the most trusted rules about land can crumble and be replaced by new ones. However, some other land rules have stayed the same for centuries. Only time will tell which rules about land from today will still hold up tomorrow.

Interested in becoming an Accredited Land Consultant? Sign up for LANDU Education Week in Denver, CO, for the chance to complete the Education Requirement portion of the designation.

About the Author: Laura Barker is a freelance writer based out of California for the REALTORS® Land Institute. She has been with RLI since October 2017.

New Farm Bill Legalizes Hemp in Land Real Estate Industry

By now, most people know that hemp became legal in America after the 2018 Farm Bill was signed on December 20th, 2018. However, there’s a lot more to the new law and legal hemp itself than meets the eye. Let’s take a look at hemp, its benefits, and the details of its current legal status under the 2018 Farm Bill.

What Is Hemp?

For those of you that are green (no pun intended!), hemp is the non-psychoactive variety of the Cannabis Sativa plant. Hemp gets confused frequently with marijuana. The biggest difference is that hemp has a very low THC (0.3% or less) while marijuana contains concentrations between 15%-40%, a much more potent dose that lets users have that “high” feeling.

What Makes Hemp Stand Out?

Hemp is used for fuel, fabrics, oil, plastics, animals feed, building materials, paper, and more. You can even eat it, although the taste is unpleasant. In fact, there are over 25,000 known uses for hemp!

Hemp is a fast growing, low maintenance crop. The plant requires less water, fertilizer, and herbicides than many common crops, making it a great option for farmers looking to save a little money or reduce their carbon footprint.

Hemp is green in more than one way. Hemp takes in more CO2 as it grows and naturally rids the soil of toxins, making it an excellent crop for bioremediation. After the harvest, the remains break down into rich nutrients for the soil.

What is the current ruling?

The Hemp Farming Act of 2018 (whose provisions were included in the 2018 Farm Bill) let hemp farmers apply for federal agricultural grants, own crop insurance for the plant, and have access to the national banking system (an issue for marijuana in states even where it is legal). The 2018 Farm Bill removed a lot of hoops that hemp growers used to need to jump through. Removing the gray areas surrounding the plant and allowing hemp farmers access to the same tools as other farmers will make it easier and more profitable for people to grow hemp. 

Just because hemp is legal doesn’t mean everything is cut and dried surrounding the plant. While the 2018 Farm Bill removed hemp and products made from hemp from the Schedule 1 Drug List, the FDA still has regulatory authority over all CDB in food and drugs. Testing protocols surrounding how much THC and CBD is in each plant is still up for debate, as different testing methods can sometimes produce different results.

A recent report from the Brightfield Group expects that the United States CBD market will be worth $22 billion by 2022. If you’re considering branching out into new crops, hemp might be a great option for you.

Be sure to tune in to the Industrial Hemp- Impacts to Real Estate non-LANDU course being held by the RLI Oklahoma Chapter on May 9th with facilitator Kirk Goble, ALC.

About the Author: Laura Barker is a freelance writer based out of California for the REALTORS® Land Institute. She has been with RLI since October 2017.

ALCs from 2018 LANDU Week at NLC19 receiving their pins

LANDU Education Week Attendees Awarded ALC Pins At NLC19

Once a year, the REALTORS® Land Institute (RLI) offers land professionals the opportunity to greatly enhance their expertise by taking all six courses needed to earn RLI’s elite Accredited Land Consultant (ALC) Designation in one place, at one time: LANDU Education Week. Every year, a dedicated group of agents attend that take full advantage of this opportunity, complete all the courses, and go on to proudly receive their ALC pin. Many of those who received their pin after attending LANDU Week were also named top-producing agents as award recipients as part of RLI’s esteemed APEX Awards Program.

ALCs from 2018 LANDU Week at NLC19 receiving their pins

Left to right: Geoff Hurdle, ALC; Walter Hatchett, ALC; Eric Frickle, ALC; Clayton Pilgrim, ALC; Michael Murphy, ALC; Clay McCullar, ALC; Justin Osborn, ALC; Dan Murphy, ALC; Brent Lyday, ALC; and Joey Burns, ALC.

The coveted ALC Designation pin is awarded each year in March at RLI’s National Land Conference. This year’s recipients received their pins from 2018-19 RLI National President Jeramy Stephens, ALC, on March 5th in Albuquerque, NM. Of those in attendance who were invited to the stage to accept their pin, ten of them had attended the 2018 LANDU Education Week that took place in Arlington, TX, the previous June. RLI is proud to recognize these professionals and all of the elite agents that dedicated themselves to the earning the designation in 2018.

Eric Frickle, ALC

Eric Frickle, ALC, receiving his ALC pin from RLI National President Jeramy Stephens, ALC, at the 2019 National Land Conference.

Of those receiving their pin at conference was Eric C. Frickle, ALC, CCIM, with Eric Conrad Frickle Commercial Realty in California who was also awarded the RLI APEX 2018 Broker of the Year in Commercial Land Sales. When later asked about the value that the week provided, he stated “RLI’s LANDU Education Week was a great experience. It afforded me the opportunity to complete all of the courses I needed for designation in a classroom environment. This provided a great opportunity for building relationships with fellow classmates… and it was great to see them all again at NLC!”

Michael Murphy, ALC, receiving his ALC pin from RLI National President Jeramy Stephens, ALC, at the 2019 National Land Conference.

Also receiving their pins in Albuquerque were Dan Murphy, ALC, and Michael Murphy, ALC, Broker/Owners of the M4 Ranch Group in Colorado. If their names sound familiar it’s likely because they tied to be named the RLI APEX 2017 Top National Producer, the program’s most coveted and prestigious award, at NLC17. When discussing his experience at the 2018 LANDU Education Week, he recalled “We attended LANDU Week in 2018 and this is by far the best way to complete a majority of the ALC classes and make connections for life. Great classes and great instructors but the friendships created were a perfect bonus!”

Dan Murphy, ALC

Dan Murphy, ALC, receiving his ALC pin from RLI National President Jeramy Stephens, ALC, at the 2019 National Land Conference.

His brother Dan also raved about the week saying “LANDU is the best way to accomplish the goal of attaining the highly coveted ALC Designation. The best part is surrounding yourself with the true professionals in our industry. While the education and convenience of LANDU is outstanding on its own, the contacts and friendships greatly outweigh the learning.”

Geoff Hurdle, ALC

Geoff Hurdle, ALC, receiving his ALC pin from RLI National President Jeramy Stephens, ALC, at the 2019 National Land Conference.

The star-studded line up of ALCs that were handed their pins in Albuquerque doesn’t end there. The RLI 2018 APEX Wrangler Award winner also spoke about what an honor it was to receive his pin after having completed the courses at the 2018 LANDU Education Week. Geoff Hurdle, ALC, of Hurdle Land & Realty in Tennessee with the APEX 2018 Wrangler Award for largest number of transactions closed in 2018; Geoff had over 181 closed transaction sides in 2018! Reflecting on the experience he mentioned “I knew that LANDU Week was the only way I was going to get in the education requirements for my ALC without it taking me years to complete. To have done that all at once sounds like a time-suck but, in actuality, it was a time-saver! LANDU Week also saved me money from a lot of travel. I am so, so thankful for LANDU and how it all worked out! I highly recommend LANDU Education Week. Besides, you meet a bunch of people after the same thing that become great friends!”

Walter Hatchett, ALC

Walter Hatchett, ALC, receiving his ALC pin from RLI National President Jeramy Stephens, ALC, at the 2019 National Land Conference.

On connecting with one other 2018 LANDU Education Week attendee that went on to get his pin at the 2019 National Land Conference, Walter Hatchett, ALC, of Kohler & Associates in Georgia said “Having the opportunity to attend the 2018 LANDU Week in Dallas and listen to and learn from top land real estate professionals was a great experience for me. The networking and knowledge gained was priceless, as well as making friendships that will last a lifetime. It was truly worth the investment, to me, to have all the classes needed in one location and timeframe to assist in obtaining my ALC Designation.” Walter was also recognized as part of the RLI APEX Awards Program as a RLI 2018 APEX Top Twenty Producer.

If you are thinking about earning the elite Accredited Land Consultant (ALC) Designation, make sure to check out the 2019 LANDU Education Week taking place in Denver, CO, from June 2-10. We hope to see you receiving your ALC pin at the 2020 National Land Conference (NLC20) in San Antonio, TX, from March 29 – April 1 — and maybe even receiving one of our esteemed RLI APEX Awards after all that expertise makes you a top producer!

Jessa Friedrich, Marketing Manager, REALTORS Land InstituteAbout the Author: Jessa Friedrich, MBA, is the Marketing Manager for the REALTORS® Land Institute. She has served in her current role in the land real estate industry since March 2015 overseeing all matters pertaining to the organization’s marketing and communications.

Real Estate Buyer Online Research Trends To Leverage In 2019

“Know your customer:” This rule is more than just a requirement for financial institutions, it also simply makes good business sense. While banks are required to heed this old adage, there is benefit to be found from all business in taking this simple phrase of advice to heart, and it is certainly relevant to the modern-day real estate industry. Where your next client comes from may be the key to selling your land listing, and leaving it to chance that they might drive by your listing and see your yard sign, or possibly drop in during floor hours limits the scope of landing that next client. As the US becomes more digital in every faction, the start of 2019 is a great time to review your virtual footprint and evaluate the impact of your online marketing efforts. If you truly ‘know your customer’, you won’t have to wait to find them – they will find you.

The Statistics

In an effort to better understand your future clientele, it would be wise to first look at how they prefer to interact with the industry. In their 2018 report: “Real Estate in a Digital Age” the National Association of REALTORS® Research Group notes the following statistics:

  1. “In 1981, 22% of home buyers read newspaper ads to find a home…in 2018, 44% looked for properties online first.”
  2. “In 2018, buyers worked with an agent 87% of the time…”
  3. “The typical buyer used a mobile device to search for properties online. S/he looked at websites with photos, home listings, and information about the home buying process. S/he then contacted an agent…”
  4. 93% [of buyers] used an online website, 73% used mobile website or app, 53% attended an open house, and 46% were introduced via a yard sign
  5. 87% [of buyers] found photos very useful, 85% found detailed property info useful
  6. 56% of all generations of buyers listed ‘finding the right property’ as the most difficult step in home buying

So what do these statics mean in finding your next client? Thankfully, it is all good news for the REALTOR®, as buyers vastly still prefer to work with an agent to close the deal. However, it is important to note that whereas previous generations appeared to have starting working with an agent as the first step in the buying process, current buyers are trending more towards researching properties online first. This does not necessarily mean the buyer pool is failing to reach out to an agent. It does however imply that by the time they do reach out to you, the buyer may have already formulated a viewpoint as to the current condition of the market, and might have also made an opinion on the agents representing the market and which may best serve their needs as a potential buyer. What this should signal to all land agents is that online first impressions are key in attracting the largest pool of potential clients, and the clients that do filter through to you are more knowledgeable, better researched, and more tech-savvy than generations of buyers in the past.

A Modern Day Application

Luckily, taking advantage of these statistics to your benefit is simple, and should be a process in every agent’s yearly marketing effort review. Even though these statistics were quoted from the broader real estate industry, their lessons are still applicable to the specialty of land real estate markets throughout the country. Knowing that 9 out 10 of buyers used a website, with 7 out of 10 researching properties via a mobile device, any good agent should ensure their web presence matches these up-and-coming trends and they are maximizing the extent of their online influence with websites, aggregations tools, and social media. Greater than 8 in 10 buyers found photos and detailed property information the most important considerations in their research, meaning agents should focus on spending time and resources ensuring their property photos and online descriptions are high quality, impactful and thorough.

Finally, with over half of all buyers noting that ‘finding the right property’ was one of the most difficult steps in the real estate process, there is vast opportunity for any agent to capitalize on reaching these future clients. Focusing on creating a carefully curated and dedicated online presence of their own, an agent can ensure that future clients find the right property not on their own – but in collaboration with your knowledge, guidance and assistance from the start of the process, all the way through the closing.

Here are some quick, actionable how-to tips for agents looking to capitalize on their online influence review – ensuring you get the most benefit from the time and money you chose to invest:

  1. Find Yourself

Conduct a digital audit on your current listings from the buyer’s perspective. Pretend you are the ideal buyer for your property – try to search online for your listings and see how easy they are to find, navigate to, and engage with. Do the same for your name and area of real estate expertise. This will allow you to better understand and empathize with a prospective buyer’s experience in finding and engaging with you and your business.

2. Consider Social Media

It’s time to hit social media and build your brand – Focus on Facebook and Instagram, but make sure you dedicate yourself to those platforms. It takes consistent content posts and updates to stay engaged with your audience. Also, don’t forget to respond in a timely manner. Many users choose to engage solely via social media, and if you allow for comments or posts on your accounts, your audience will be waiting for, and expecting, your response.

     3. Competition Analysis

While conducting your digital audit on yourself and your business, look at what competitors are showing up in the search results ahead of you. Actively consider what you can do to increase your brand reach and recognition; from search engine optimization to listing aggregation management, to move yourself up on the search result list. If you can experience a buyer’s perspective in finding your competition, you might try to emulate that experience on your own business. Take a page from their playbook to put yourself in a more competitive position to win future clientele.

For information about building up your online influence, both the RLI and your local chapters have helpful information and toolkits available to their members.

Now that you have a better idea of who your customer is in 2019 and beyond, it’s time to get online, introduce yourself to the virtual buyer world, and get to know them better. Because if you’re doing it right – they already know all about you!

Cited Works: “Real Estate in a Digital Age”, National Association of Realtors®, 2018 https://www.nar.realtor/research-and-statistics/research-reports/real-estate-in-a-digital-age

 

Author: Chris Noonan, RPL, MSc, is the President and Co-founder of White River Ranch Marketing LLC. An AAPL Registered Professional Landman, Chris is lending his decade plus of experience in land contracts, ranch buying, mapping and land use affairs to the farm and ranchland real estate industry via his startup, WRRM – designed to expand the virtual impact of land brokers and their listings throughout the US. Chris is an affiliate member of the REALTORS® Land Institute and his company has listed an exclusive offer a part of RLI’s Member Advantage Program (MAP).

 

What Does the Future of Agriculture Look Like?

What will the farms of 2100 look like? Will they be completely unrecognizable from the farms of today? Will they be autonomous? Will the type of crops farmers grow be similar to those we grow in 2019 or can we expect brand-new grains and vegetables to feed the ever-growing population? There’s no way to know for certain, but in this article, we take a look at current trends in farming and technology to hazard a guess about the future of agriculture.

Wired in

Technology already plays a huge part in agriculture and its role on the farm will only continue to grow. Drones, telematics, crop sensors, and precision agriculture technologies all help farmers increase productivity on their land while cutting back on physical labor. Although it seems like these land technologies are already a staple on many farms, the technology is still relatively new. Much like the computer or telephone, we can expect to see better, faster, and more affordable versions of these technologies in the future.

Precision agriculture technology has been extremely popular in the past few years. This technology can do everything from monitoring, giving each plant in a crop individualized care, and efficiently dispensing water and fertilizer. Precision agriculture technology is key to reducing food waste, which may be why the industry is expected to grow to $2.42 billion by 2020. You can expect precision agriculture technologies to play a huge part in the farms of tomorrow.

Another technology we can expect in the farms of the future is swarms of tiny robots. The University of Applied Sciences in Germany is already exploring a concept called MARS, which stands for Mobile Agricultural Robot Swarms. Groups of anywhere from five to one hundred bots would plant and tend each seed’s need. This specialized care can cut down on food waste and create healthier crops.

More Mouths to Feed

According to the United Nations Department of Economic and Social Affairs, the world population is expected to boom to 9.8 billion in 2050 and 11.2 billion in 2100. This means that food production is going to need to increase dramatically. With demand high, we might see an increase in people joining agriculture or large investments in farm technology to help make enough food to feed the masses.

The Changing Consumer

The American diet is evolving. Compared to the 1970s, people in modern day eat much more grains, oils, and sugars, and have cut back on dairy products, vegetables, and eggs. Just as the farmers of today had to adjust their crops for the changing times, the farmers of tomorrow will do the same.

graph pulled from the Pew Research Center

We can predict what the consumers of tomorrow will want based off the consumers of today. The demand for organic food has steadily risen for the past decade, as well as the demand for farm to table. The consumers of today are more health-conscious than ever before and the farms of tomorrow will have to accommodate for that.

Better Fake Meat

A few years ago, fake meat looked like limp tofu “hot-dogs” that no one touched at the barbeque. Nowadays, fake meat like the Impossible Burger are similar to meat in texture and taste. As more companies compete to create a more realistic plant-based burger, we can expect more and better-tasting fake meat products.

This could create a huge shift not only in raising real meat, but also in corn and soybean production (much of which is used to feed crops).

Don’t panic, beef farmers – the number of vegetarians and vegans actually hasn’t increased much over the past few decades. This means that at least in the near future, there is still a market for real meat. The current legal battle surrounding what can and cannot be called meat could help preserve a consumer base that demands real meat.

A New Kind of Farm

Vertical farms, a type of farm where crops are grown on vertically stacked structures, may be a staple for the future of agriculture. With the population expected to boom, the ability for vertical farms to take up less room than a traditional farm could make them more popular.

They also used a tiny amount of water compared to the great outdoors.

There is no surefire way to predict the future of agriculture. We have no idea what laws, natural disasters, cultural shifts, and new technology are waiting just around the corner. However, there are plenty of clues in the farms of today that can help us predict the future of agriculture.

No matter what decade you are in, land education is key for knowing the ins and outs of the land industry. Check out RLI’s upcoming courses to stay educated and ahead of the curve when it comes to future land trends you need to know.

About the Author: Laura Barker is a freelance writer based out of California for the REALTORS® Land Institute. She has been with RLI since October 2017.

land real estate

Land Brokerage Relationships You Need

Land and decisions about its ownership or stewardship of it, have been a defining factor in the history of the United States. The promise of having a stake in the land brought so many to our shores. LAND, that one asset, is highly diverse, uniquely fixed, and limited in supply… 

“Land is the only thing in the world that amounts to anything, for ‘tis the only thing that lasts, and don’t you be forgetting it! ‘Tis the only thing worth working for, worth fighting for, worth dying for…”  –  Gerald O’Hara to Katie Scarlet, GONE WITH THE WIND

RELATIONSHIPS ARE KEY IN LAND BROKERAGE

As you establish yourself as a Land Broker, one of a select group of people who are willing to brave the elements and ford the streams, my best advice to you centers around RELATIONSHIPS. These important associations will help you today and over the years in your career of land brokerage. The depth they will provide to your practice will help you establish yourself as a Land Expert. Build this team and be loyal to them, and demand loyalty back! If you cannot call them when it may be inconvenient to them from time to time, find someone else to work with. As with most businesses, team effort is essential.

There follows a list of members you would do well to identify for your team in the land brokerage business. Try to find three folks you can work with in each category, but be sure to find at least one. These contacts will help you to know your market and the players in it.

LAND APPRAISER. Identify and meet with and interview this important member of your team. Talk with him or her about the average sales prices of lots and acreages. Keep track of this as you continue to keep in touch with this individual and chart it.  This information is all-important as you evaluate land in your market. This information can support that you obtain from your local MLS system (if you have one). Be sure to use the MLS to chart the land currently on the market, too. Also ask your land bankers, they know about deals that didn’t go on the market!

LAND BANK. The land bank is very important in the land business. Here’s why: Down payments and interest rates. Any property over five (5) acres (with or without a home on it) is considered “non-conforming”. Conventional lending services will make a loan on vacant land, however they want 20 to 50% down. On the other hand, the Land Bank asks 15% down on a 20-year program. (This program is based upon demographics, so your market area may not apply.) Note: Most Land Banks have in-house Appraisers. Check with your local Farm Credit and get to know those loan officers. They are a wealth of knowledge.

investment

ATTORNEY. Who can do business without a good attorney these days? Interview as many as you can find who specialize in land transactions. Talk with them about land, what they think about it, what brought them to specialize in land transactions, and how available they can be for you and your clients.

Try to identify at least three (3) attorneys you can work with and recommend to your clients. Remember, a land attorney should be very knowledgeable in subdivision laws, easements, timber contracts, mineral rights, extensive title searches, and land financing. There are definite nuances in the land business and your attorney needs to know about them and be available for consultation, even at night.

CPA/ TAX ACCOUNTANT/FINANCIAL PLANNER.   There may be tax consequences in all land contracts. These professionals can help you identify them and can be a valuable resource to you and your clients especially if they specialize in 1031 Like-Kind Exchange work. They can explain how to figure the “tax basis” in your transactions.

SURVEYOR. A surveyor is a big help in determining the “highest and best use” of a property. Do the same thing with surveyors as you did with other team members. Take the time to interview and select as those you enjoy working with and can recommend to your clients.

Be sure the surveyor is up-to-date on zoning and subdivision laws in your market area. Find at least one who not only is available, but will work with you. That is important. I call my surveyor at night if I need to.

land surveyor

ENVIRONMENTAL PROFESSIONALS. Take the time to get to know your environmental health department professionals. Be sure to meet and spend time with the Health Department Director and Staff. At a minimum, learn from them:

  1. How to set up a septic system
  2. How to fill out septic applications; and
  3. How to understand and fill out well permits.

In addition, 1) learn how to do your own soil analysis, 2) know how to get a water sample if a property has existing well or wells, and 3) get copies of soil maps and system application forms so you will have them handy when needed. In a rural land transaction, the septic permit is all you need to close. Remember, the septic permit may take 2 to 4 (or sometimes more) weeks to obtain, so be sure to start the process as soon as you are under contract.

SOIL SCIENTIST. Soil scientists are an invaluable asset to your team because they can approve sites that a Health Department cannot. They can suggest alternative systems (probably considerably more expensive) and even override a Health Department decision.  Most counties do NOT have a soil scientist on staff, so you will need to do some detective work to find and establish a relationship with at least one. A soil scientist can teach you how to evaluate soil, a lesson well worth learning.

ALC Shadow over dirt

SEPTIC SYSTEM INSTALLER. In the land business, where septic systems are common, what would your team be without at least one reliable septic system installer on board? Identify and interview several and select those you can work with and refer to clients.  From your contacts, learn the different types of systems, their costs and how they are laid out. Go to an installation site and observe for yourself first-hand how the system is installed. Support your own research with a collection of information and brochures from various manufacturers whom your installer can recommend.

WELL DRILLER/CONTRACTOR. A poorly built or maintained well can allow pollutants to enter water directly. The closer the well is to sources of pollution, the more likely the well will become polluted. For instance, if the well casing is cracked and pesticides that are being mixed near the well are spilled, the pesticides can easily leak into the well and pollute your drinking water, so it is essential to take the time to get to know a certified well-driller in your area. A good place to start to look for a well driller is your State Division of Water Quality.  Once you locate reliable resources, and identify those you will want to work with, find out about their pricing structure (most charge by the foot) and get basic knowledge like the typical depth of a well in your area, and now to chlorinate a well.

Your regional DENR Groundwater Section office, county health department or local Cooperative Extension Center can be a valuable source of information on the following topics: New well or spring construction and site selection,  well inspection and maintenance, Certified well drillers, Unused well abandonment, Construction records for existing wells ,Well water testing including— – Advice on appropriate tests to run, – List of certified testing laboratories, – Assistance interpreting test results, – Health risks. Your local Cooperative Extension Center can also provide information on:  Backflow prevention, Water pollution and health risks, Water treatment devices, Groundwater.

COUNTY/CITY PLANNING BOARDS.  Attend meetings of your local board. You will gain invaluable knowledge and insight which you can share with your clients. Get current copies of zoning laws, subdivision laws, zoning maps, flood plain maps, and other information that will be of help to you. Know of plans for the future including zoning changes and annexations, as this will help you anticipate the market. Learn how to establish a new street name and address.

MAPPING STAFF. Get to know the mapping staff in your county. They can help you to identify property, property owners, provide tax maps, topographical (topo) maps, and aerials of property. (Most counties now have GIS systems.) The mapping staff can teach you how to use these tools if you take the time to establish a relationship with them.

REGISTRAR OF DEEDS STAFF. Get to know the folks at the Registrar of Deeds Office. They will help you do your own title search and do the research to discover anything that may affect the title or value of the property including: any type of easement, encumbrances, mineral rights, timber rights, and so forth. Remember: ALWAYS get a copy of the Deed or deeds involved as you do your research. Do not rely on the attorney to do this for you. You are the expert and responsible.

TAX ASSESSMENT OFFICER.  Take time to go to meet the tax assessment officer. Such individuals are helpful in understanding what has sold and trends in sales beyond MLS date.  My agent furnishes me leads from time to time. This member of your team can be an excellent resource and most Realtors do not use them, so you can stand apart if you do.

TIMBER EXPERT. Professional Forestry services can help you as you identify the “highest and best use of the land” and a timber expert is an excellent addition to your team. That person can help you remember which tree is which, learn how to identify prized trees, learn how to “cruise” timber, provide a “certified cruise” and basically learn how the timber market works. You need to know about or how to figure board feet, how a timber contract works, and how to auction timber. TIMBER IS CASH. Your client actually can buy land with a timber contract, cut the timber, and still own the land with no out-of-pocket money. Being able to evaluate timber will help you price land.

timberland real estate

ROAD BUILDER. The construction business has become a more complicated one as environmental and safety rules proliferate and methods and equipment become more sophisticated. The increased complexity of the field makes planning jobs even tougher than before Road construction, grading, concrete work, retaining wall construction and taking preventative measures, which are cheaper than curative ones, can reduce the risks of landslides and increased soil and water erosion. Your road builder can tell you about the importance of aligning a road along a ridge, especially with a south-west aspect, and how it helps to avoid water drainage problems, avoids exposure to excess moisture and frost, and uses sunlight to keep roads dry. Ask him or her about phased construction, such as gradually increasing the width of the track, avoids having to manage large amounts of excavated material and allows for the natural compaction of earthwork by rain.  Road building is a complicated effort and you will want to add a seasoned road builder (or more) to your team. They can let you know the cost of putting in basic access roads to state-specified built roads. This will also help you on a break-up evaluation.

CORPS OF ENGINEERS/SOIL & WATER/ENVIRONMENTAL PROTECTION AGENCIES. All these government agencies are resources for you and may well be involved in any land development project in which you are involved. Get to know them and what services they provide.

LAND CONSERVATORY. Identify the local Land Conservatory decision-makers. They may be aware of purchase programs and incentives that may purchase your listing or a part of it. Tax benefits at the Federal and State level may aid in your sale.

UTILITIES PROVIDERS. Contact the utilities providers in your area including telephone, power and cable. Know who they are, what their service area is, how they work in terms of applications and so forth, what their charges are (if any) for new service, or moving a pole or poles and possibly create a hand-out with this information you can supply to your clients.

utilities

LAND BROKERAGE TOOL KIT

These are must items to help you become a LAND EXPERT if you use them.

  • 300’ tape
  • Surveyor’s flagging tape
  • 4’ surveyor’s stakes
  • Small hand sledgehammer
  • A handful of 10-penny nail (Who is holding the dumb end of the tape?)
  • Machete
  • Really good walking/hiking shoes
  • Beverage container you can wear
  • Insect repellant
  • Professional compass
  • Hand auger
  • Scale ruler
  • Digital camera w/ extra disc
  • GPS locator
  • Calculator
  • Area maps
  • Topographical maps/ aerial maps of subject and adjoining properties
  • Septic/well permits application forms
  • Think about what else you may want to add to this list!

You also may want to contact Ted Turner.  He is the true lover of land. He now is the largest private owner of land in the United States.  He owns over 2,000,000 acres of land.  Does he know something we should know?

Now you are ready.  Happy land brokerage and good luck!

© Lou Jewell, Accredited Land Consultant 2004

Lou Jewell, ALCAbout the Author: Lou Jewell, ALC, has for over twenty-five years has provided expert experience in rural markets in Western Piedmont North Carolina and Southern Virginia. He has over 1,000 successful transactions and has developed over sixty rural subdivisions. A member of the Realtors® Land Institute since 1998, he achieved the prestigious Accredited Land Consultant (ALC) Designation in 2004 and is one of less than 500 ALCs in the United States.