Angel Investors

[Scribner's Mountain Maple]

Alright, I may be dreaming, but I was wondering if anyone knows of investors looking to get into the Maple industry?

I am sure my story is similar to others, but I have a huge opportunity at my fingertips, and of course, money is the roadblock. My neighbor is selling a large track of land. It is actually a timber company and they would be willing to break off a chunk for me, 300 acres. It is prime maple land with 150-200 maples per acre in places. I try to be conservative with estimates, but think there is 10-15k taps easy. Add in the 180 acres I already tap and my other neighbors 300 acres and I have a huge bowl that I sit in the bottom of to tap. Maybe total 20-30K taps.

I only have 2K taps now.

I have tried Farm credit, and other types. They aren't interested in buying land.

Thanks for any ideas, or connections.

Ben

[madmapler]

There are investment groups out there who are looking for investment opportunities. I have only heard rumors of some as I have been looking into ways to expand my other business. I personally am holding off going that route. Short term investments can be appealing to those with the cash because interest rates are so bad. Sounds like you need to make this work!

[Spanielslovesappin]

I am sure i am stating the obvious but try to get them to bite on selling whatever you can currently afford/finance through full build out (land + tubing system), expand your tap count (10 Acres = 1-2000 taps) which will improve your cash position to the bank and make it more attractive for them to finance.

Be carful with outside investors, they are in it for the ROI not the love of maple. Bang a road through and sub-divide into 5 acre home sites will always look better to a financier. Once you invite the fox into the hen house all bets are off no matter the original stated intentions.

[optionguru]

What kind of numbers are you talking about? Spaniels is right, when it matters it will all come down to the numbers. When you talk about venture capitalists at any level they care about the most productive use of their money. The returns have to be better or more assured than the other investments they're looking at. I'm a financial advisor by trade, if you need some free advice or help with the numbers feel free to email me. wetownh@gmail.com

[maplestudent]

would a lease arrangement with option to buy on that 300 acres be a consideration?

[jmayerl]

That is exactly what farm credit does. I'm sure if you have some money to kick in they would be more than happy to help. At the amount of taps you are already at you should be making money. You need a thorough business plan with real numbers and then you can approach somebody.

[Scribner's Mountain Maple]

Thanks for the replys, I like the Fox in the Hen house warning. This 300 acres is part of 1200 that is being sold. A gem really. But they want 1.5M. Or like $1225 per acre. For the 300 acres, I would think they would give real consideration to $250K or in that ball park. maybe even a little less. It really isn't convenient to get to as there aren't roads into it. It is just above my sugarwoods, so I have the only access.

For ROI, a conservative estimate is 10,000 taps. It costs 50K to set that up, and should produce conservatively 3K gal of syrup, with a wholesale value of around 90K. That pays for the tubing investment and holding tank, sugarhouse upgrades, etc in the first year.

I sent a request for a lease option purchase. Haven't heard back. Go big or go home!!!

[tuckermtn]

I am surprised you did not get a favorable reply or interest from Farm Credit East - that seems right up their ally. Have you tried your local bank? With land as collateral, it might be of interest.

[Amber Gold]

I wouldn't paint too rosy of a picture. 80 taps per acre is a more reasonable estimate...maybe 100 taps per acre if it's steeply sloped. Also, I think the rule of thumb is $10/tap just to set the woods up and this doesn't include the sugarhouse costs...say $100k in the woods, but there may be some economies of scale because of the number of taps you're putting in. I think 3000 gal of syrup is a conservative estimate and with $90k in gross income. Sugar house costs for that number of taps will be substantial.

[Scribner's Mountain Maple]

Since I do most everything myself, or with little help, the cost per tap is closer to $5 for me. The sugar house costs will be substaintial, but not as bad as it could be. I have a 6*16, w steam away and a large enough sugar house. Would need more storage, and 2400 GPH RO. And barrels, lots of barrels.
I think I need to wake up from this dream. The sad thing is that the land will be sold and my chance to tap it could be gone forever.
That's how the cookie crumbles.

[heus]

Don't give up on your dream! Keep trying. Someday you will regret not pursuing this further.

[Spanielslovesappin]

I think you should exhaust every possible angle to get your hands as much of this gem as you can even if its only an acre! One of my co-workers aunts puts it best... " i don't want to own all the land, just all of it that touches mine"

While the land itself is has great value most lending institutions want you have guilded credit and make you put up at least 20% to make sure you have skin in the game and they can walk away whole. I think you just need to buy what you can afford of it if you cannot work out a lease to own. Like my tax man always says... "the pig gets fat, the hog gets slaughtered"

Dreaming is exactly how you end up owning a mountain or at least how the mountain ends up owning you... neither of which are bad.

[Scribner's Mountain Maple]

Alright, I sent them a lease option for 100 acre. A big part of this dream is this land used to be part my great grandfathers 1200 acres when he was a logger. He had 11 kids, it was divided and my grandfather was the only one to hold onto his 100 acres. And Now I seem to be the only one of my generation to give a hoot about it either.

[not_for_sale]

With the $5 per tap you are short changing yourself? Your work is worth something? If not, how do you expect to have someone invest if you expect out of them what you do to yourself? Here is the reality: if I have the 250 to buy the land, I have multiple opportunities to make money. At a very low 10% cost of capital for near risk free investments I would expect you to pay me $25000 back each year. If I take on any risk, it would have to be more.

[not_for_sale]

Btw, that is just the capital expense. It would not pay down the principal. Can you make such an arrangement work and take on all the risk?

[325abn]

Doing all the work on 1000 taps is one thing, do all the work on 20000 taps is another.

[maple maniac65]

farm bill?

[markct]

Alot of small costs your missing like the 20K bucks of barrels it takes to hold that much syrup

[doocat]

Are they trying to sell any other cut off portions? I'll buy one>>>

Craig

[Hop Kiln Road]

Ben Private capital will only flow into land like that as an inflation hedge. Simple equity financing is out the question since the maple industry is a notoriously poor investment because effective distribution networks are non-existent. Right now many of the big players are for sale. The cost of developing distribution networks - syrup storage, bottling lines and chain store receivables - is just staggering yet this has been the choke point for the industry. Farm Credit East, a cooperative, has been financing some of the distribution development. With their dividend back to their borrowing members the interest rate has been below 2%, but it is not fixed. These rates, suppressed by gov't policy, can and probably will triple or quadruple very quickly. I got a look at some of the numbers and they are astounding in terms of $ volume but low in terms of profitability. Buying in a 1m gal in bulk syrup at $25 a gal is $25m @ 2.5% interest is $625,000... a year. And that doesn't take in the bottling and distribution capital, labor and carrying costs. Just double the interest rate and you get a stomach knot. Thus the big players looking for buyers and the production end, you, can't expand.

[madmapler]

I still say to consider an investor if nothing else works. These guys are painting a bleak worst case scenario and I'm not saying they're lying but my experience has been far different. Lease to own is a better option if no lender will consider it but when all else fails, there are people with money laying around who are'nt getting much for their dollar. I mentioned investment groups and the one I was in touch with would have lended the money short term with interest, no talk at all about taking over or running my business or anything like that. My investment situation is a real no-brainer with little risk involved. You have to be confident about your project. Develop a business plan and sell it. Do you know someone who has money, who knows you and can see the potential? I would talk to them. A lot of people still let their money sit in the bank. Its an opportunity for them to increase their wealth as well. You can pay back a short term pretty quick with that many taps. Offer to pay 10%. The people I did this with were definately interested. I just decided to hold off for a while to see if I could do it myself. Where there is a will there "is" a way. You really have to put yourself out there though. Negative thinking will kill it for sure. My opinion is that if you fail at least you know you did what you could and you're bound to learn a few things besides. If its a good deal, people will see it.

[happy thoughts]

Ben, this might be dangerous ground and something you should consider carefully before you offer it, and definitely consult a lawyer before you take action, but you mention there is no access to the parcels except through your property. Might you consider granting a right of way via your access road? You might be able to barter for a chunk of the parcel you want or negotiate a much lower price.

[325abn]

There is a company in Charlestown, NH (Landmark Land Sales) that buys and finances raw land without any banks involved. I have had good experience with them.

[theguywiththename]

family is sometimes the best investors

[Maplemonkey]

maybe you need an active partner rather than an investor. This type of production would seem to require shared risk and the efforts of several individuals. Also, I would guess that an active partner who loves the thought of this type of business rather than a venture capitalist who just wants to squeexze maximumprofits as fast as possible would make more sense if this is a long term deal. What are your strengths? and Weaknesses? Maybe finding a complementary active partner is the way to go here? (note: i do not have experience in large scale maple but in small to medium organizational development.) a partner will have a desire to succeed hopefully as much as you will and their sweat equity combined with yours would increase the chances of financial success.

[stoweski]

How far is this land from Moose Meadow Lodge? Are you the sugarmaker that taps their trees?

Absolutely beautiful land up there. Wish I had the $$ to go after something like that.

[Scribner's Mountain Maple]

Thanks for the all the information and opinions. They are all helpful. I will check out Landmark Reality. That would be perfect.

I have to agree with Monkey on this, that in Investor/Partner would be better situation over Venture Capital. VC funding wants two things, a big return, and fast.

Stoweski, A good friend taps Moose Meadow. I am just over the hill from him. It is a nice area. Just close enough to the world to be involved and just far enough away where it is hard for people to find you.

I hope to make some progress this week and will report back if anything breaks.
Thanks,
Ben

[Dill]

How is the conservation market in your area? I've seen plenty of deals worked out with farm credit hinging on selling the development rights as part of the payment.

[325abn]

Did ya talk to landmark?

[BAP]

Seriously look for any conservation programs for forest land. That is a good source of money. Also, check with FSA (farm service agency) to see if there is any USDA money available in the form of grants or loans. www.fsa.usda.gov Check out there website lots of information. They sometimes have money available that people do not realize. They have beginning farmer loans and some conservation programs. Sometimes Farm Credit can be a little difficult to work with. It seems to vary a lot from office to office and makes a big difference on the loan officer. I wouldn't give up on them, it just might take more work. Like others have said, the most important thing for you to do before sitting down with any of these people, put down on paper, some sort of business plan and what your current operations finances are. Loan officers like to see that over somebody just asking to borrow money. Be prepared for a long haul, most likely you will have to have everything appraised both what you currently have for collateral, and what you propose to buy. Good Luck, sounds like a great opportunity.