Our blog will help keep you informed about news and information related to the farm, ranch and rural real estate markets. If you share our desire for wide open spaces and investment in the land, we hope you will subscribe, read and discuss the stories we find and develop here. More than just an investment, ranch, farm and rural real estate evokes a type of lifestyle that was born over a century ago and still provides a certain romance and passion for those who embrace the pioneering spirit from those days gone by.

Buying a Ranch vs. Resort Life

By: Jim Taylor

This is the classic dilemma for a family looking to make an investment that will double as a place for the family to convene. How often does one hear from members of families that have had family retreats of one kind or another “we loved it” “we went every year” “everyone in the family came”. These are places where memories are made and they often represent the “glue” that holds a family together.

So, do you buy a place in a private residential community/resort or do you buy a family ranch? If you opt for a classy resort like the Yellowstone Club, Aspen or Jackson, the cost is likely to be about the same even though the ranch might have hundreds or thousands of acres for every acre one buys in the resort.

yellowstone-club-golf-course-hole-4

Put very simply, a resort is a place where one goes to be entertained. A ranch is a venue where one can entertain oneself.  The resort is the easy answer because there is something there for everyone, from a latte to all forms of cultural and social entertainment. In this day and age of people having the ability to be instantly gratified, it is difficult to sell anyone on the concept that there is value in waiting and working for one’s gratification – much less selling the entire family on the concept.

Every successful development has been forced to become family friendly – to serve all the generations. Family offices set up to service the needs of extended families are proliferating and are reported to have over $4 Trillion in investable assets. Family offices are the obvious home for these types of investments and they tend to impose an important discipline on the process of making the resort versus ranch decision.

jhmr_tram_04__large

The bottom line we would contend is that the resort “investment” choice is hardly an investment. The bulk of any resort property is generally tied up in a structure which tends to either depreciate or require a high level of maintenance. All expenses related to ownership are not business expenses – rather they come out of after tax income. The real difficulty is that during periods when the families’ use of the property is limited, the maintenance goes on.

bull-mountain-028

A family ranch, on the other hand, is a true investment in itself. The family is buying a piece of land at its lowest use that, quite apart from being loaded with wildlife, is being operated as a cattle ranch. Land of this type is in increasingly short supply and there is growing demand for the high-quality protein it produces. These factors cause it to have a high probability of increasing in value. The fact that it is beautiful and might have a trout stream passing through it is simply an added bonus that allows its owners to derive a lot of pleasure from being on it.

motherwell-099

The benefits for the coming generations of children to appreciate nature and experience the ranching life style is impossible to calculate. And, if there is a period when the family does not use it, a ranch has a productive life of its own. In fact, there is really no comparison between ranch life and resort life. While compelling and stimulating, resort life is not real.

eagle-creek-111

 

Mineral Rights as They Relate to Your Property

A basic understanding of mineral rights can be important to evaluating your property.  One common source of confusion when buyers or landowners contemplate value is the concept of the split estate.  “Split estate” refers to the separation of surface and mineral ownership, whereby two or more individuals own separate rights in the same land.  Split estates are quite common throughout the American West, and many landowners do not even realize that their homes, businesses, or ranches are subject to the mineral rights of third parties.  Understanding the relative rights of split estate owners, knowing where mineral ownership may be uncovered, and understanding how to investigate the likelihood of mineral development, can help landowners negotiate risks and properly assess land values.

best-time-to-visit-napa-valley-1170x506

Split estates come in several forms.  With regard to private lands, split estates commonly result from a prior owner’s reservation of mineral interests or prior transfer of rights to a third party. Such transfers or reservations occur in deeds, leases, royalty carve-outs, assignments, or other documentation throughout the chain of title.  These can generally be found at the office of the local county clerk and recorder.  While surface ownership may usually be verified by simply looking up tax records or visiting the possessor of the property, determinations of mineral ownership require a much deeper investigation.  It should also be noted that under most state laws the mineral estate is considered dominant over the surface estate, which means that once a mining project or oil and gas operation is properly permitted, the rights of the mineral owner may take precedence over the surface owner’s operations or use of that land.  The rights of private surface owners relative to those of mineral and royalty holders has been a topic of much discussion and litigation over the years.

N Bar Elk027

Another form of split estate ownership occurs when minerals have been retained by the federal government. Many lands in western states were previously transferred into private ownership through patents.  These patents were issued under congressional acts like the Stock-Raising Homestead Act of 1916.  Some of these historic laws and patents reserved mineral rights to the federal government.  As a result, Stock-Raising Homestead Act lands, for example, are subject to the location of mining claims by third parties.  These lands may also be subject to the possibility of leases if the government grants leasehold rights to third parties. Determining whether your property was patented under the Stock-Raising Homestead Act, or some other law whereby the federal government reserved mineral rights, would be advisable prior to committing substantial investment in surface operations. The Stock-Raising Homestead Act provides specific protections to surface owners, but those who are unaware of these provisions may find themselves at a disadvantage in the event of mineral entry or development.  Master title plats and federal patents can reveal whether the federal government holds mineral rights to your particular piece of property.  These may be obtained from the Bureau of Land Management for review.

lucky-star-117

As a general rule, title policies and commitments from title insurance companies do not insure surface owners against possible mineral development.  Some title companies are still willing to run mineral ownership reports which is one way of finding out who owns the mineral estate. However, these reports come with no guarantees and virtually all title companies specifically list mineral ownership and mineral rights as an exclusion to their insurance coverage. Another way to determine mineral title and evaluate ownership risks would be to hire a landman or a title lawyer who can assist with a review of public title records.  Title opinions issued by a law firm are supported by that firm’s malpractice insurance, and landmen often have extensive experience reviewing and interpreting mineral ownership issues in the county records.  Their reports are usually quite comprehensive and dependable.

One way to evaluate your property and understand the possibility of mineral development is to retain the services of a geologist, mining engineer or other mineral resource specialist. These professionals, trained in geologic mapping and mineral identification, can evaluate your land to identify likely mineral deposits beneath the surface and the possibility of future mineral development.

IX_PN Hunt27

It is not uncommon, in split estate situations, for both the surface and mineral owner to fully enjoy their property rights without interference from the other.  New technologies and advancements in the mineral extraction industry benefit many who might otherwise be adversely affected.  As just one example, most horizontal drilling, currently taking place in North Dakota, extends up to two miles underground.  The result of this development is that surface lands are rarely disturbed even though petroleum products are being drained from beneath the surface.  Similar types of accommodations are often made by mining companies.  Knowing that these accommodations exist is helpful when a landowner is approached by a developer of the mineral estate.

bull-creek-037

It should also be noted that just because lands were once mined or disturbed by mineral operations does not mean those lands are useless.  Strict reclamation and permitting requirements imposed by both state and federal governments require mineral developers to fully restore lands to their original condition.  In some respects, surface owners may also have the opportunity to participate directly in this reclamation process.  Depending on the natural state of the land, and the commodity mined, it is possible to fully mine a valuable deposit and subsequently develop other valuable resources within the mined area.  Some examples where this has occurred include Lake Oswego, Oregon where a former iron mine was transformed into an area of high-value real estate.  Other examples include the Butchart Gardens in Victoria, British Columbia and the Quarry Amphitheater on the campus of the University of California, at Santa Cruz, both of which were originally limestone quarries.

_-4

In short, most lands throughout the West consist of split estates. Prudent buyers and owners today begin with an assessment of whether there is potential for mineral development in the area of their property. If there is that potential, then one needs to undertake the analysis outlined above to determine mineral ownership and what the impacts might be.  The existence of a mineral deposit beneath your property does not necessarily mean your land cannot be fully enjoyed.  It is important to keep in mind that mineral developers are generally required by law to pay damages, and these can be significant. Also useful roads and water development can be beneficial to ongoing agricultural operations.

By John Childs
Childs Geoscience Inc.
1700 West Koch Street, Bozeman, MT 59715
&
Joshua Cook
Crowley Fleck PLLP
490 N 31st Street, #500
Billings, MT 59101

Motherwell Ranch Profiled by Fly Fisherman Magazine

A couple years back Motherwell Ranch, a newly listed Colorado ranch for sale, was profiled by Fly Fisherman magazine in a story titled “Colorado Fishing Motherwell Ranch.” The ranch raises the bar as Colorado’s foremost multidimensional mountain ranch. Spanning an enormous block of contiguous deeded land, this 10,350+/- acre sporting paradise is distinguished by its unmatched combination of exceptional privacy, diverse landscape, abundant water, plentiful wildlife and ideal location.  Here are some excerpts from the story:

Atop the mountainous terrain that forms the horizon sits one of the country’s most luxurious fishing lodges. Right out its front door—at an altitude of 8,400 feet—is one of two superb trout lakes, the crown jewels of the 6,500-acre Motherwell Ranch. The ranch also has other smaller lakes and beaver ponds, and a 31/2-mile section of the Williams Fork of the Yampa River.

motherwell-074

Dream Lake (near the lodge front door) is a 20-acre lake stocked with brown, rainbow, cutthroat, and brook trout ranging from 18 to 24 inches. These thick trout eat adult damselflies in July, traveling sedges in August, and Callibaetis and midges on most ice-free afternoons. In late summer they cruise the grassy north and east shorelines looking for errant grasshoppers.

With so much food at or near the surface, these fish are extremely surface-oriented. Even when nothing appears to be going on, a Parachute Adams, Dave’s Hopper, or small Stimulator will pick up fish regularly. When the hatches are heavy, the normally calm surface of the lake boils with fish, and a more exact hatch-matching pattern can bring a strike on almost every cast.

Lake dusk cropped web

The real brutes of Motherwell Ranch are less than a mile away in the 30-acre East Lake. While drys will take fish at East Lake, most of the big fish are taken with subsurface patterns. This lake is filled with minnows and olive scuds, and obese rainbow trout weighing over five pounds are a common daily catch. Eight-pound trout will hardly raise an eyebrow. Woolly Buggers, Clouser Minnows, and olive scuds are the preferred patterns, and every boat is stocked with them.

Motherwell lake pano

 

While you can wade the shorelines at Motherwell Ranch and cast to rising fish, most of the fishing is done from 12-foot prams with electric trolling motors. Guides give on-the-water casting lessons to those who need them, as well as operate the boats, tie on flies, and direct your casts.

The fishing is not difficult on the lakes, and even novice anglers can succeed with short casts and attractor drys, or by trolling a Woolly Bugger. It’s a good place to learn fly fishing, and the lodge has quality tackle to outfit guests.

motherwell-099

The Williams Fork of the Yampa River is a small stream (about 30 feet across) that flows through the ranch and has rainbows and Colorado River cutthroats from 14 to 22 inches long that ambush an Elk-hair Caddis or Turk’s Tarantula in river corners and riffles. The stream fishing is more difficult, but the fish are just as willing. The best time to fish the stream is after July 4, when snowmelt runoff subsides.While the Motherwell Ranch has excellent trout fishing, what sets it apart from other destinations is the service and accommodations. The ranch is one of many owned by Las Vegas construction tycoon Wes Adams—one of the biggest landowners in the West—and he spared no expense in building the ranch’s log cabins.

motherwell-092 The log-and-stone lodge has a great room, three deluxe suites, complete wet bar, dining area, game room, and TV area. While outside is a wild, sportsman’s paradise, the inside is almost too posh to be called a lodge. The daily cuisine is prepared by an experienced chef. The Grand Suite has a 50-square-foot shower built with imported Italian marble, a cast-iron bath, and two private balconies. The cabins have views of 100 miles to the north and east, and no lights can be seen after dark.

Motherwell front gate evening webmotherwell-072

For nonfishing guests, there is horseback riding, hiking, mountain biking, and sporting clays. More than 1,000 elk gather in the meadows below the lodge. In the fall, the ranch offers trophy elk hunts.

motherwell-085

The Value of Land Leases on Private Property

Leases on private property come in a variety of shapes and forms. These can include but are not limited to agriculture, livestock/grazing, oil & gas pad sites and pipelines, wind turbines, cell towers, power transmission stations and lines and of course hunting and fishing leases. For many landowners, especially new landowners and/or absentee landowners and estate executors the details of lease development, management and administration is not their specialty. In this situation, not only can money be left on the table but security regarding how the property will truly be used/taken care of is skeptical.

151007181935-waggoner-tractors-farming-super-169

If negotiated and managed correctly, leases can be a valuable source of income and assist in maintaining and/or increasing the value of the property. For example, separating a recreational lease into four distinct leases (deer/turkey, quail, fishing, waterfowl) creates more income than a single all-inclusive lease. Leases should be a win-win, if at all possible but a general lack of knowledge by one party can lead to a continued state of discontent. Poorly negotiated and developed leases can lead to many years of headaches for a landowner and loss of property value.

Outstanding in your field-1

Issues can arise at not only the pertinent locations of work but also along the routes traffic utilizes to access those locations. In addition, poor on-site “use” policy and adherence to agreed upon rules by the lessee or contractors often creates tension and lack of appropriate onsite supervision can lead things astray quickly.

A major concern, especially to rangelands is the accidental introduction of non-native vegetative species of forbs, grasses and brush that can be detrimental to the native terrestrial and aquatic sites. The improper reclamation of soils, especially around pad sites and pipelines can greatly decrease the value of those locations; which for pipelines can extend for many miles impacting large amounts of acreage. Likewise overharvesting of game species and rangeland grasses will negatively impact a property while poorly chosen locations for new roads, pad sites, pipelines and powerlines can unfortunately be detrimental to beautiful views, the health of streams/creeks/ponds and cleanliness of the property. Even simple items such as who is responsible for maintaining fences, barns and roads or what happens if a wildfire occurs on the property or the property is sold during the term of the lease all need to be negotiated.

IMG_1825

Fortunately, there are companies such as Hall and Hall that can provide a team with a diverse knowledge base regarding all facets of leases. A knowledgeable team understands how to look beyond the scope of the project itself and understand the bigger picture and how a lease and its expanding footprint may impact the ranch as a whole. A good team also understand how and when to “give and take” during negotiations, what hills are worth fighting for and which ones are not, in order to meet the goals of the property representative.

grass-fed-beef-from-flickr

Scott Shuman Named 69th National Auctioneers Association President

Scott Shuman, CAI, of Eaton, CO, and head of Hall and Hall Auctions will serve as President of the the National Auctioneers Association (NAA). After serving one year as NAA Vice President,  Shuman formally accepted office as NAA President on Thursday, July 13, during the NAA International Auctioneers Conference and Show.

Shuman - President

Thirty-two previous NAA presidents lined up at the sold out President’s Gala to officially pass the ceremonial gavel to Shuman. In fact, it was passed hand by hand along the line of previous presidents until it reached the hands of its newest recipient. Shuman described the ceremonial welcome as one of the best moments of his life.

In addition to Shuman’s accomplishments, Hall and Hall won three USA TODAY marketing awards at the conference.  Thank you to Krista and the rest of the Hall and Hall marketing team for their exceptional efforts.

Ranch Broker Road Trips

By: Tim Murphy

Each year Hall and Hall travels nearly a million miles in pickup trucks, small aircraft, helicopters and ATV’s.  I don’t know a single one of us that has to refer to a map to know where we are going.  To each of us on our own regional turf, this is familiar territory and nobody does road trips better than we do.  Our partners, management staff, appraisers and lenders all have depth in this industry far beyond our collective colleagues and countless miles and hours behind the wheel.  It’s what makes us effective at what we do and valuable to our clientele.  Our opinions are generally quite calculated because we have “been there” many times before.

BN-NM638_0414HE_J_20160411172646

A million miles sounds like something only a trucking company could accomplish.  It’s a daunting number to think about, but consider what we do and where we go.  We are extremely fortunate to live and work in one of the most beautiful places in the world and sell unique and at times massive assets within this market.  Driving thousands of miles to me is not something I dread, rather I cherish it.  On any given year I discover a new canyon or secret trout stream that most people are not aware of.  We see the best and worst of all seasons as they roll in and out.  Through the windshields we often see things that few other do.  Truthfully, I never tire of this and often take the time to pull over and photograph something interesting.

miller-lake-094

Photography dovetails perfectly with our careers. I have been fortunate to work with many incredible professionals such as Kenton Rowe and Craig Hergert who are masters of the art.  One thing that I never knew about the hobby is that it ultimately causes you to look at everything differently.  Primarily, you see how light reacts to certain subjects.  For better or worse (I think better), you never look at anything the same ever again.  You appreciate beautiful landscapes just a little bit more than the norm.

dancing-wind-253

The best opportunities are often the ones you don’t see coming.  Upon completing a multi-day tour with clients in the Cody, Wyoming region, I was blessed with an opportunity to take a personal adventure home across the Beartooth Plateau.  The plateau is located on the east side of Yellowstone Park.  A primitive highway ascends to 11,000 feet extending for nearly 70 miles above tree line connecting the communities of Red Lodge, Cooke City and Cody via spurs of this road.  It rightfully is claimed to be one of the most scenic byways in North America, potentially in the world.

That day, I could not have timed better as the high-country was just out of winter slumber coming a bit late as parts of the region received 200% snow pack.  At 10,700 feet my thermometer read an exceptionally pleasant 64 degrees contrasted to the predicted 94 at Red Lodge below at lower elevation.  Thick wedges of snow and ice still dotted the landscape and I stopped at the Gardiner Headwall to watch skiers descend off a cornice and into a cirque to the lake below.  A short distance later I spotted a band of mountain goats 100 yards or so off the road.

_N8A6126

There was a place to pull over so I parked, grabbed my camera and walked downslope a bit to take a few images of them.  The light was high in the sky so I was not hopeful on any sort of quality but the ground was a complete carpet of wildflowers, the air was fresh and I was having a moment just happy to be alive and sitting in that location.  The goats were feeding towards me so I stayed put and watched as several very young kids fed and played amongst the nannies.  The kids were snow white and just starting to figure out how to forage.

_N8A6199

The band continued coming closer, and closer and closer. They leveled off at 10 feet and literally fed right through me.  They knew I was there but did not feel threatened despite me aiming a large camera at them and snapping 220 images hoping/praying one would turn out.  I think a few did indeed and you can see the culled photos in this gallery link- Beartooth Goat Gallery.    I found it amusing to stand up after 45 minutes to find a crowd of people had gathered above me many of whom were commenting that they were taking photos of me taking photos of the goats!  I was pretty neat from my vantage point, I am sure it was from theirs as well. This was a solo experience, and I rather enjoyed it.  It is often that we are fortunate to share these experiences with clients.  It’s a rewarding part of the process for all of us.

_N8A6156-Pano