Cadiz, OH Considers Offer to “Flip” Royalty Rights for $11K/Acre

calculatorThis story is almost a month old, but somehow it missed our otherwise good radar. It involves landowners who want to sell their already-leased acreage royalty rights to investors–“flipping” the rights to royalties they may or may not get at some future point for money on the barrel head now. In this case, the landowner considering doing the flipping is the Village of Cadiz (Harrison County), OH, and the company that wants to buy their royalty rights is Flatiron Financial. Flatiron, you may recall, recently purchased a bunch of leases from some of Ohio’s Amish farmers (see OH Amish Flip Royalty Rights for Tax-Free Lump Sum Payment). Seems the flipping business is good and Flatiron is turning on the pressure in Cadiz, telling village officials they don’t have long to make a decision. The hand is slowly leaving the table…better act now! Right.

So what is Flatiron offering? Cash now for potential future royalties–and the cash is on the order of $11,000-$12,000 per acre. Note: This is not a one-time lease payment, it is signing over all future royalties (for decades to come) for a lump sum payment now. It becomes a game of poker, estimating your odds of whether you’ll get more “down the road” if you wait for monthly or quarterly royalty checks, or just take it all now–“bird in the hand” thinking. Tough call. What will the village leaders do? The clock is ticking…

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