Investing in West Texas Hunting Land
Today we are not going to talk about bass fishing but about hunting and investment. Five years ago I sent a very similar letter to our clients and some of our clients participated in the joint venture and are really glad they invested.
Here is the story…. Five years ago I decided to start back hunting after a 15 year absence from this wonderful sport. One day in my office I was talking to a land owner in Coleman, Texas about leasing his property for hunting. While I was on the phone, Mark Ferrel walked in and overheard my conversation. I had coached Mark in high school football and he has made me look pretty good as he is now a deacon in our local Baptist church. Mark told me when I finished the call “Coach, you don’t want to lease land for hunting.” He said he and a group of hunters from Athens, Texas had been buying land for the past 20 years in West Texas. They would immediately re-list the property for sale, marking the price up $150 an acre over what they paid for it.
Sometimes it would take maybe 2 to 3 years to sell the property and the investors would get to hunt the property until it sold. The object was to get free hunting and to make some money in the process. The profit was not that large but was more than they could make in the money market or bonds or the risky stock market.
Mark took me out to West Texas to a ranch they had just just bought near Robert Lee, Texas. There were 10 investors buying 3,000 acres and the joint venture was full. No room for me, so we looked around the area and found a 1320 acre tract I liked very much. I payed a down payment to hold the land. In short we bought that tract and then put together a group of 4 other investors and we bought 1000 acres. The land in this area was just increasing in value almost every month.
Then about one year later a 3000 acre tract came up for sale. I put another another group made up of fishing clients, friends, and family. This venture had 10 partners and we paid $395 per acre. I did these joint ventures different than Mark and his buddies did on their land investment. I decided up front that we would hold the properties for 5 years and then put them up for sale.
The first property of 1320 acres I sold 1 month ago for $1060 per acre and this brought a net profit before tax of $1,400,000 in only 5 years. The other two tracts we still own as the partners want $1450 per acre plus retain 50% of the wind royalty. We turned down $1000 per acre 2 years ago. If we had sold it at that time each partner would have received over $200,000 in profit before tax. This gain would have come on an investment of only $17,000 each member. That is a gain of 200% gross profit in only 3 years. The annual payments are averaging about $7000 per year.
This has been such a wonderful investment making money even during bad economic times that I have decided to put another joint venture together and buy more land. I believe this land market will continue to escalate in price for another 10 years before it is all bought up just like South Texas did 20 years ago. Today, if you can find good hunting property in South Texas it will cost between $2000 and $3,000 per acre. West Texas is following the same identical pattern as South Texas did 15 to 20 years ago.
I am looking for 20 investors for the next joint venture and feel that the initial investment will cost us about $20,000 to $25,000 down. Really I already have 7 signed up with most being from the group of investors on the 3,000 acre ranch so I am really looking for 13 more before I close it down.
Do I expect to make 200% profit on the next venture??? NO!!!!!!!!! I do hope to make more than we can make in any other investment and get to hunt the property for 5 years. At this time I don’t see any risk as the land continues to increase. It certainly is a much safer investment than the stock market these days. Just ask anyone who put their life savings in 401Ks.
If any of you are interested in being a ranch owner in West Texas, please call me at 800-722-0006 and I will send you some written literature plus a long list of references of current investors, bankers, etc.
Also, I am trying to help some clients who don’t have the money to invest who want to do some leasing of land for quail hunting. They want to get about 10 hunters to lease a 17,000 acre tract South of Colorado City Texas. If interested give me a call.
Next week we will go back to tips on bass fishing during the spring spawn.
HAVE FUN WITH YOUR FISHING AND WEAR THAT LIFEJACKET