My foray into timber production provided a few important investment lessons...and an opportunity.

April 26, 2023

Dear Fellow Investor,

Last month I wrote you about my “happy place” — my cabin nestled in a couple hundred acres or so of forest in southern Mississippi.

My wife and I spend every weekend we can up there, listening to the wind whisper through the trees, sitting by a campfire with hot toddies at night and generally just getting away from the rat race.

I love to hunt during the winter and fish in the bass ponds and creek scattered across the property.

Again, it’s our happy place.

But when I first bought the property in 2011, it was an absolute wilderness — mixed timberland with pine, oak, magnolia, beech and cypress trees that had been unmanaged for decades.

My first job was obvious: I had to get the trees thinned out to promote their growth and wildlife-friendly, understory habitat.

That was my first venture into timber management, and it was illuminating.

Immediately after acquiring the land, I contacted a local forester to perform a “timber cruise” that would outline the types of timber present, how much of each there was and the various soil types present.

That report showed substantial timber value...if I simply clear-cut the entire forest.

But I didn’t want that. I wanted to manage the land properly to promote wildlife, and with this goal in mind I toured the land with my forester.

As we drove across it, I noted a few big, old, heavily branched pines overhanging the trails and asked that they be preserved from cutting.

“No problem,” my forester said. “They’re not ideal for cutting anyway. All those branches mean lots of knots in the lumber.” Hmmm. “So how much would that big tree be worth in timber?”

“About $20,” he said.

Wow. I wasn’t as timber-rich as I’d imagined. And thus I began my education into the U.S. timber industry.

I got my acreage thinned, and about four acres clear-cut for a home site, and pocketed a relative pittance in timber sales.

Nine years later, the entire industry changed, however.

Everyone remembers the spike in lumber prices right after Covid hit, as so many people stuck at home undertook renovation projects.

The price of lumber, which had been depressed for years at around $500/1,000 board feet or lower, suddenly soared over three times, to over $1,600!

One would think that these soaring prices would make my timber worth a small fortune, and have loggers breaking down my door to get access to my land.

Nothing could’ve been further from the truth.

You see, decades of people planting pine forests as retirement plans had created an abundance of supply that kept prices down...and discouraged the building or expansion of lumber mills.

And when the demand and price surge hit, the few mills remaining knew that it was a temporary situation and declined to build new facilities.

In fact, with timber prices near record lows and lumber prices at record highs, they were happy to simply sit by and rake in fortunes.

Land owners were left high and dry.

So I found a way to make an end run around the mills....

As I told you last month, I recently had to get about 20 big pine trees cut from around my cabin.

We had ridden out Hurricane Ida with those pines swaying violently over our heads, and didn’t want to go through that dangerous ordeal again.

But I hated to see those big pine trees, cut and stacked into 20-foot-long logs, slowly rotting away.

So I bought a small sawmill and set about turning them into valuable lumber myself.

Now, it’s a bit more involved than that may seem, and I’ve spent more than a few weekends setting the mill up and getting everything adjusted correctly. But the early results are very encouraging....

As you can see, I can now create some spectacular pieces of lumber, from massive beams to beautiful slabs, from the trees on my land.

I’m very excited about the possibilities.

That said, I have to admit that it’s slow going. And while I can certainly sell some of this custom lumber, including those slabs that can create spectacular tables and countertops, it’s not going to produce income that will change my financial situation to any major degree.

But then I came across a way to actually realize very significant returns from timber...without any of the hassles and at prices that are among the highest in the world.

My friend Mike Cobb runs ECI Development, a group that has created fantastic retirement and “Plan B” real estate developments around the world.

I’ve always been impressed with their properties in Latin America and, most recently, Portugal, and they’ve been one of the most popular sponsors at my annual New Orleans Investment Conference.

So, given my own enthusiastic (but admittedly limited) experience in timber, I was excited when Mike recently explained the timber opportunity that they offer investors.

Far from the relatively cheap pine on my land, they offer investors a chance to own incredibly valuable teak timber.

I’m doing my own due diligence on the opportunity now, and some of the things I’ve discovered are, frankly amazing.

Consider this:

• Owning your own timber parcel means that — no matter what else happens in the world, the economy or the financial markets — your investment grows every day.

• And talk about a long-term track record: Teak timber has increased in value an average of over 5% per year for over 100 years.

• Growing your own teak is not only environmentally friendly, it benefits from the closing-off of wild teak production. Plantation-grown teak has been soaring in value.

• The very fact that it takes time to realize returns from your investment is actually a benefit for long-term financial planning. We can set up legacies for our children, confident in the knowledge that the value of this investment is growing every single day.

• The projected returns are what really turned my head — in my opinion, they’re quite rich for such a steady, hands-off investment.

There are many other aspects that are equally exciting and that deserve exploration (including the benefits of owning the land).

As I said, I’m doing my own due diligence on this opportunity now, and I urge you to come along with me to see if owning teak timber is right for you.

Just click the link below to get a free report from ECI Development providing all the details behind this opportunity.

All the best,

Brien Lundin
Editor, Gold Newsletter
CEO, the New Orleans Investment Conference