Have you ever wondered how the best land brokers got to the top of their game? “Confessions of a Land Pro,” a new series from the REALTORS Land Institute’s Future Leaders Committee, aims to answer that question. Featuring interviews with top producers from various regions and markets, “Confessions of a Land Pro” uncovers the journey to the apex of an ever-changing industry.
Our first installment features Bill Eshenbaugh, ALC, founder and president of Eshenbaugh Land Company in Tampa, Florida in conversation with guest interviewer Ryan Sampson, ALC, Principal of Eshenbaugh Land Company. Bill began his brokerage nearly 30 years ago, and since then has sold tens of thousands of acres and done more than $1 billion in land sales.
Watch or listen to the episode & learn about the ups and downs of Bill’s highly successful career in land. Whether you’re just getting started in land real estate or you’re a seasoned agent with years of experience, we hope you can gather some nuggets of wisdom from “Confessions of a Land Pro.”
The Economic Opportunity of Land Resources for Real Estate Agents
Land real estate agents can earn significant income by marketing land resources which increase the value and revenue potential of land. These land resources can oftentimes exceed the traditional real estate land values and create exciting opportunities for agents. Some of the key questions agents are asking include: How do you know if the land has valuable mineral, solar, or wind resources? How much are these resources worth? How do you market land resources for the true market value given the complexity of land resource valuations? The reality is that land resources can be worth anywhere from two to ten times the value of the surface land real estate. In certain parts of the country, minerals alone have sold as high as $100,000 per acre and landowners have received as little as $250 per acre for their minerals in the same location.
Land Resource Market: $5 Trillion Per Year
Based on data before the Covid-19 pandemic, the total US residential real estate market was around $9 trillion per year. The land real estate market was estimated to be a $500 billion market. The market of land resources associated with land is around $5 trillion per year. As the demand for energy continues to grow, the land resource market will continue to increase. Land resources are a large market but due to the complex process of evaluation, the market has only been accessible to resource companies with the capacity to value these assets. Sellers and their agents have fallen prey to land resource flippers and small sale prices due to their lack of information.
Continuous Opportunities After a Sale
Real estate agents may think once they sell a property to a buyer, their work is done. But in fact, the buyer (new landowner) has additional options to lease certain property rights to resource companies, providing an additional way for agents to monetize the same property they just sold.
Challenge: Comparable Sales Misleading in a Flippers’ Market
Resource companies commonly send multiple offers from subsidiaries to create a false sense of market value. Some comparable sales data from resource companies is relevant, most isn’t. Resource companies always use the income approach to value acreage by risking future cash flows, the same exact way financial analysts value assets and companies.
Land resource valuations are extremely complex because there is a string of data points, calculations, and forecasting involved. To determine the acreage value, a resource company calculates the resource availability, extraction, commodity sale price, forecasted revenue generation, installation cost, operational costs, capital costs, taxes, incentives, and much more. These complex calculations leave agents and landowners at a disadvantage and in a position where they must rely on the developer to offer fair terms, which is rarely the case.
The result is that middlemen come into the market, commonly known as flippers. These flippers know that they can lease these rights to resource companies for up to ten times what they paid for it. Another scenario is that landowners enter into long-term agreements with a wind or solar developer leaving significant money on the table, or agreeing to unfavorable terms. Landowners and agents rarely achieve alone the best deals without land resource experts supporting them.
Most online mineral marketplaces do not provide valuations because they lack the technical expertise but also because they get paid by mineral buyers to capture great properties for cheap. Agents also need to be careful partnering with any land resource marketplace since some of them charge fees to both buyers and sellers which creates legal challenges.
Solution: Transparent Marketplace with Land Resource Experts’ Help
The only way to fix this market deficiency is to properly assess the full economic value of the land resources. Negotiations always involve exchanging ownership information, negotiation, economic valuation exchanges, complex lease negotiations, title verification, and closing. Companies like LandGate have land experts who solve this market deficiency and do all of the work for the agent making it easy for them. LandGate and other companies provide data intelligence and land experts who help calculate land resource value the way that resource companies would, making the subsequent considerations easy for land agents to understand.
Challenge: Buyers are Specialized and Transactions are Complicated
Another challenge in land resource marketing is that the process involves contacting buyers specific to each land resource. Within a resource type, most the buyers that landowners will be able to contact are likely to be middlemen. Even within a single segment, such as oil and gas minerals, specific top buyers change frequently depending on funding availability. Just in the past four years, oil and gas buyers have transitioned from public exploration and production companies, to private equity, to private investors and family offices as being the primary buyer class today.
Solution: Land Resource Experts Critical to Negotiate
Given the ever changing market, it is essential that agents work with land resource experts who know these buyer segments. LandGate, as an example, has over 30,000 buyers of land resources. Work has been done with oil and gas, solar, and wind developers so that the language used in these transactions is industry standard and results in the best deals for agents. The following are a few specific examples of the more common resources that landowners and agents often overlook when considering an acreage transaction. Land resource deals are very complex: true market value, reasonable terms, and expectations. It is very important for agents to find experts who are able to assist them with these transactions: valuation, title, negotiations, terms, and closing.
This post will be continued.
About the Authors
Eric Thompson is the Vice President of Business Development at LandGate, an online marketplace for land resources. Since entering the oil and gas industry in 2015, he has handled over $300 million in asset transactions. Eric holds both graduate and undergraduate degrees and lives in Houston, Texas.
Dan McCue is Vice President Land at LandGate. He has been a successful Oil and Gas Land Professional for 40 years. He is an adjunct professor and twice-published author with The University of Texas at Austin’s Petroleum Extension (PETEX).
Yoann Hispa is CEO and co-founder of LandGate. Yoann has 17 years of experience in the energy industry doing billions of dollars in valuations, acquisitions, divestitures, and development projects in leadership and technical roles. Yoann holds an Executive MBA, three Masters in Engineering and Geoscience, and a BSc in Math.
Read a vacation rental listing for a rural area and you’ll sometimes see “no internet access” promoted as a plus point. Such marketing chutzpah may work for a weekend break but for people looking for a permanent home, rural internet access in the form of fast and reliable broadband is a deal breaker. That’s even true after a year when remote working was put to the test like never before.
We’ve written before about the absence of broadband services in rural areas, including those relatively close to major cities. Fixed-line expansion is still a pipedream for rural internet access in many places but wireless services are increasingly looking like an answer. That could be tremendous news for landowners and investors.
Barriers To Rural Internet Access
Federal government programs to expand rural internet access through wired broadband are proving big on ambition and slow in reality. Earlier this year the Federal Communications Commission launched a $20.4 billion “Rural Digital Opportunity Fund” program to bring broadband to areas currently without access. However, a controversial decision means none of that money will go to areas that have already had any funding from a similar program by the Department of Agriculture or from state programs, even if that funding proves inadequate.
Throw in ongoing disputes about the accuracy of maps showing which areas have adequate broadband and it’s a recipe for confusion, particularly given the likely political changes in the FCC’s management in the coming years. Perhaps the most important conclusion is that residential development land in those areas which do get funding will become far more attractive.
Some had placed their hopes on Google’s programs combining fiber services and localized Wi-Fi. That’s proven a disappointment for rural internet access, however. Rather than reach places with little existing infrastructure, Google has concentrated on targeting more densely populated areas where the problem is a lack of competition rather than availability.
Mobile Broadband Options
Instead, it’s mobile broadband that could really make a difference outside of the cities and suburbs. 5G is the big topic of debate for rural provision, though some have questioned whether it will be a real game-changer.
The good news is that the FCC has made a couple of moves to increase the likelihood of 5G reaching underserved areas. The first is cutting the bureaucracy involved in upgrading a 4G tower to the new technology. The seconds is the removal of government fees imposed on carriers building 5G networks in major cities. In theory at least this money could instead go towards expanding service to less populated areas.
5G has some significant limitations, notably that it uses a shorter wavelength than 4G. While that’s what allows for faster data speeds, it means the range of a relay station is considerably shorter. The answer is likely to be different locations having a different trade-off between speed and range.
Given the economics of serving a less densely populated area, that could mean 5G services in rural areas are little faster than a good 4G signal today. That said, such speeds will likely be enough for many users and what really matters is getting an affordable and reliable connection in the first place.
Satellite Internet The Next Big Thing?
Satellite internet is the other big hope for rural internet access. Previously it’s been a service that sounds great in theory but hasn’t live up to the hype. Not only has it been prohibitively expensive, but upload speeds have been cripplingly slow, with lag also a major problem. That’s a measure not of how quickly data transfers, but how quickly devices can respond to a request and begin the transfer. Too much lag and increasingly popular services such as video conferencing become frustratingly ineffective.
The big tech firms are on the case, though. Google’s sister company Loon is trialing a technology that uses high-altitude balloons to build a network of relay stations in the sky accessible through existing LTE technology in smartphones and laptop dongles. After nearly a decade of development it’s now being used for real in Peru and will soon be available to consumers in Kenya. The next step will be discovering if it’s financially viable as a commercial service before rolling it out worldwide. It would also likely require Federal Aviation Authority approval if launched in the US.
Perhaps the most exciting option is Starlink, a fleet of low-altitude satellites operated by SpaceX, the same company that runs commercial flights to the International Space Station. It’s running commercial tests with customers in the US who’ve paid $499 to buy receiver equipment and a $99 monthly service fee for unlimited access. One tester in an Idaho national forest with no access to cellular service reported downloads of 120 Mbps and uploads of 12 Mbps with no significant lag.
Which of these mobile technologies proves viable in the long run remains to be seen, but it’s worth exploring current and future availability in a location when assessing land value. A rural setting with city-like communications could be the dream scenario for potential residents, making location more important than ever.
You’ve found the perfect parcel of land, but the lack of a fence means you may have to purchase some fencing to enclose your property. Or perhaps you’re looking to sell some rural land, and are worried that potential buyers may be turned off by the lack of a fence.
Either way, there are plenty of options for land fencing you can choose from. And, in addition to attracting potential buyers in an increasingly competitive land market, many of the following fencing options can also help to increase land value as well. Consider the following land fencing options and choose one that best suits your needs.
Corral panels are ideal if you are just seeking to put some no-nonsense fencing around your land. The panels are easy to put up and connect, and often don’t even require you to dig any postholes. However, they can be quite costly — an average price for a 12-foot panel is $100. Using corral panels to fence a small area is more feasible in cost, but not very practical for larger areas,
Flex rail is often chosen as an alternative to solid vinyl rails. They are pretty solid when attached to fence posts but have just enough flexibility enough to make them a practical choice for horse owners. They are also pretty maintenance free and some styles look like real wood fencing.
Simple and practical, stock panels are a low-cost option for those just seeking to land fencing without worrying about how nice it looks.
Typically chosen more for looks, this is a decent option if you just want to make the fencing around your land look nice, but they aren’t a practical choice for horse owners, since rails can easily be knocked out of place. Other than that, they are easy to insert into posts, and don’t need staining or painting.
Continuous steel rail
A good choice for putting land fencing around larger areas, continuous steel rail is connected to wooden posts, making a seamless fence line. The one drawback to these sturdy panels is that they can be costly, even more than corral panels.
Obviously a good choice for those with horses on the property, horse fencing is comprised of woven wire integrated with a tight mesh. It enables a horse to walk near the fence without the risk of the horse’s hooves getting caught in traditional fencing or rails. It is also affordable, and can be attached to fenceposts to improve the sturdiness. As an added bonus, this type of fencing can look attractive, increasing land value. It is best installed by a professional though, since it takes some skill and experience to stretch the woven wire fencing properly from post to post.
Coated wire fencing is often chosen as an alternative to cable fencing, and is constructed from electric fence wire that has been wrapped in a polymer coating. It’s a rather simple type of fence, ideal for those who simply want some sort of land fencing. It is stronger than a traditional wire fence and the polymer coating offers more visibility as well. Some varieties of coated wire can also be electrified.
Not very attractive but definitely low-cost, barbed wire fencing is suitable for people with livestock, but not necessarily horses, as they can be injured by the fencing. Handling barbed wire fencing is obviously not without difficulty and requires careful patience and lots of durable gloves. Barbed wire fencing usually requires some maintenance as the wire strands tend to loosen over time and will need to be re-tightened.
Electric fencing is easy to construct around a a large piece of land and is relatively low-cost as well. However, many people usually use electric fencing as a temporary solution to other types of land fencing, unless there is livestock on the land, in which case it is more practical. Otherwise, the fencing can often be quite fragile, and the low visibility makes it an issue for some. Overall, it’s a convenient solution for temporary fencing but requires constant maintenance to ensure the strands don’t become loose and remain functional.
Natural fence always looks rather attractive and there are certainly a wide range of styles to choose from. Any one of them can help to increase land value, but prices can vary based on style, height, and of course, how much land fencing is required. For large areas of land, natural wood fencing can be very costly depending upon the style. Additionally, natural fencing often requires postholes, as well as regular painting or treated every so often. Large amounts of natural fence can become quite labor-intensive, so many land owners shy away from this type of fencing option based on that factor alone.
When considering your fencing options, it might be best to talk to a fencing expert. He or she will take into consideration what your land is used for and how large a parcel it is, and make the best recommendation based on your needs and budget.
We’re living in the digital age where more and more people are turning to technology for solutions. In the last ten years, social media has grown into so much more than a way to stay connected with friends and family. It’s quickly become a medium for brands to connect with and promote services to their audience.
However, as new platforms and features have developed over the last few years, many organizations can’t keep up with what all there is to offer.
What is Social Media Management?
The overarching idea of social media management is exactly as it sounds— it’s the process of managing your presence on social media platforms like Facebook, Instagram, Twitter, LinkedIn, YouTube, Vimeo, Pinterest, TikTok, Snapchat, and more.
Depending on your industry and business goals, your social media manager may only use certain platforms. Apart from monitoring your online presence and reputation, your social media manager will set up and optimize your social media accounts, create and analyze content and audience reactions, increase followers, manage advertising, and put forth content that’s tailored to connect you with your target audience. Most firms will also provide monthly progress reports showing the results of their efforts to interact or engage with customers on your various social pages.
How Social Media Management Can Help Your Business
Social media is an ever-evolving force that is relevant to business growth, and if you don’t currently have someone managing your business’ social media, you could be missing out on tons of opportunities.
Regardless of business size and budget, social media is an effective tool to achieve business goals. Here are some of the ways that social media management can benefit your business.
- Drive Traffic to Your Site: Social media allows you an opportunity to post content and ads that drive traffic to your website. For example, if your website already has a blog section, then sharing those posts to your social channels could draw in new followers and traffic. Additionally, they can generate leads through advertising that direct users to a specific landing page on your website.
- Increase Sales: Social media is an important part of your sales funnel and provides an outlet for product search and e-commerce to thrive. Nearly 4 billion people are on social media as of January 2020, with numbers only expected to increase due to Covid-19. With the right strategy in place, you could reach tons of potential new customers.
- Build Brand Recognition: Your target audience is likely already using social media, so use these platforms as a way to humanize your brand and build brand awareness. Engage directly with your customers and followers and post content that is likely to be shared to reach potential new customers.
- Learn About Your Audience: Social media offers a unique chance to learn more about your customers, what they think, and what they want. Most social media networks offer analytics that can give you insights into the people interacting with your account, allowing you to better connect with customers.
- Advertising on Social Media: If you’ve ever used Google Ads you already know how costly that can be. Social media platforms like LinkedIn, Facebook and Instagram, which is owned by Facebook, can drive traffic to your website for a fraction of the cost. You can also use Facebook Pixel to track conversion or remarket to people that have already taken some action on your website. Almost all platforms offer very powerful targeting and advertising programs.
Social media management is a useful and timely resource that can help businesses of every size reach their audience and make lasting connections that convert. We’ve found that Real Estate Agents can benefit most by using Facebook, Instagram, LinkedIn and YouTube, but new platforms are constantly emerging like TikTok, which has been in the news lately.
About the Author
Kevin May is the President of LandHub.com, a national land listing firm that has embraced social media since their inception. LandHub is an education partner of RLI and is currently offering discounted social media management services to their members. Kevin was recently featured on the RLI Voices of Land Podcast in a show titled How Agents Can Best Market Properties in the Digital Space. Kevin can be reached at KMay@LandHub.com.