Aggregate Mining Property Due Diligence
We are considering investing in a property that has a large deposit of sand and gravel available for mining. Several cement companies are interested in purchasing or leasing the property from us.
Is there a checklist available to guide us through the due diligence process?
Do you have any war stories to share with us?
Is this property between San Diego and Temecula?
How large is the deposit (prove it)
what will people pay for the product
evironment permit
are some biggies.
Great, Thanks.
Determining our residual environmental liability after the sand and gravel is removed by the leasee is a big concern for our investors. Insurance policy?
We are interviewing aggregate companies in our area, however, they are not too cooperative (too busy?)
It should be simple, but the legal questions keep coming. Thanks again!
As soon as you start dealing with State/Federal permits, you will have to at least prepare an environmental assessment ($20k-$50k) and unless you ge a finding of no significant impact, a full blown EIS ($30k-$???). Hopefully there is no water on the project parcel, as water is often associated with sand/gravel deposits (and full blown Environmental Impact Statements...)
Chris
Thanks Chris, I will put some wording relative to the EIS in my Letter of Interest. I think you will agree that contengencies and who will ultimately pay for them are all part of a final offering price.
We are syndicating this investment and need to identify all possible scenarios.
Unless they have done them already, good luck getting the seller to pay.
Also from a due diligence perspective, do you "trust" the data they dive you?
Thanks! The property is zoned for intended use, is next to a wind mill farm, therefore, the noise from mining activity will be not heard from nearby neighbors. You brought up some good points, thank you again. We will probably convert he acreage to a solar panel field once the mining is completed. The power grid is nearby due to the windmills.
We are always seeking investors for our alternative energy and land investments.
Check with www.pickensplan.com since there are lots of interested people on that site who may be interested in providing capital. Just follow state/federal laws regarding your activities....
Yes - Very interesting and very profitable if done right.
How many acres ? where about ? How far from big city ? transportation cost ? Since you mentioned --cement companies interested--why are they not buying ? Do not do LOI --if possible do an Option for six months and perform detailed due deligence- specially EIS-- and estimate Quantity of sand / gravel --as well as demand -- for excavated products --either cement company or contractors- So you knwo what will be its worth as Operating Quarry -
Will this be surface mining ?? at end --after 20 or 30 years --can it be developed ? or can be sold to a waste management company for Construction/debris Landfill --
MONEY WILL NOT BE PROBLEM -If right info developed and favorable --California is different.
I have a project 50 acre --closed Quarry --buying cheap and developing -- will sell for $20 million in three years - have $1.7 million Private Fudning --100 % -- approved.
Please stay in touch --like to know more about project
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Compared to bond, I would go for this deal. Bonds are subject to lot more risk factors then this property. Although GE is a super company so was lehman brothers. In addition, considering the appreciation , and equity repayment potential, this may match 8% with you having total control.
I know I am a bit late in this, and not giving anything of value to the initial poster, but...
Kid, could you elaborate a little on what you have in mind for the multiple properties for this investment amount?
Local to NoVa/Md?
Property Management?
Loans to cover rentals? Who/How/What
Plus anything else pertinent to your thinking of purchasing 10-12 properties for a higher return.
Thank you!
Ce
It is clear everyone has their own ideas about investment strategies. Ultimately it is a risk vs. reward decision by the principal in the transaction... and without knowing their overall portfolio plan and their context it is difficult to definitively say one investment vehicle is "better" than another.
I think the gist of this thread is that there is no right answer, but there are lots of alternatives.
did you end up doing this deal?
My offer was actually made in 2008 if you can believe that?...right before the crash. I closed on it last fall of 2009. I appreciate all the feedback I have gotten on this board. The two biggest challenges were evaluating the property and staying the course on the offer through the recession. Each property is truly unique in this business, you just have to know what you want.
Yes- I knew it -when I read you were so convicned and determined that you want to buy this proeprty --Howeevr, honestly it is not a good deal -- I do Commercial Mortagges -and good deal is when you buy at good price- average Cap rate to buy is 10 % or higher --Of course --you are near DC area and amy be differnet - I rather buy several houses or small apartment building --or a mixed use building --other suggestion is to get a partner-doctor or other friend and reduce down payment and increase leverage --loan is also not good -- 15 year straight is better -- or 10/25 -- not sure how old you are --but first think about cash flow and immediate income not retiremnt --you can flip three houses and make over $50,000 in one year --without any problem --also there are companies--give 8% to 12 % return --you can buy mortagge notes too at 12 % yield --Yes many options --one has to decide what he wants --oops one more thing --how many tennats ? you can convert to Individual Condo and double your money in 12 to 18 months
whenever you are analyzing a deal it is important to consider every small factor. The deal decided should be appropriate and duly acceptable for both the sides.