Facts and Steps: Learn Before Investing in Mineral Rights
In the United States, the business of dealing with minerals is very popular for businesses big and small. As the investment can fetch 12 to 30 percent profit, small business owners are showing their interest in mineral rights even more now than ever. You can also give it a try but, to get the desired result, you need to know about the facts and norms of financial backings.
Check these points before investing in mineral rights.
Consult with a royalty specific legal adviser, like Ten31 Minerals, so that you can follow the right path.
Make sure that you have a legal entity to buy mineral rights. It can be you, your company or a partnership.
Ensure that you have enough funds to invest.
After these, when you are coming into the principal phase of investing in mineral rights, you need to understand each phase well.
You need to find out the potential sellers from whom you can buy mineral rights. You need to check whether the sellers are willing to sell you their rights or not. You can find this out from the Division Orders that will tell you about their share of royalty money. Otherwise, you can try the royalty owners’ database where you will find out the details of the owners.
The next step of investing in mineral rights is offering a price. The division orders will provide you the owner's name, address, property details and the percentage of royalty to help you send offers to them. There are three ways you can process the offer. You can send an offer with a bank draft, only the offer without a draft or a letter with neither bank draft or offer, but to discuss your interest in the property. It is better to discuss the financial sections properly before signing any legal documents.
Don’t expect you will get responses for all of the letters you send. It could be five responses for every 1000 letters or even less than that. Make sure you respond to them immediately so that you don’t lose your chance. While discussing, assure them that you are genuinely interested and that you will close within seven days by transferring the amount to their bank account.
As you are making a transaction for the first time, you should double check the authenticity of the seller. Check if they actually own the property or not. You have a limited amount of time to complete this research so that you don’t lose a authentic seller.
Once you double check everything and are satisfied with the outcome, go for the investment. Call the seller and proceed with the paperwork as soon as possible. Make sure you have an authorized legal advisor with you so that the legal documents are made without any room for complaint.
Contact Ten31 Minerals and make your investment worthwhile for your business.