All Forum Posts by: Michael Rutkowski

The market is insane, and if you want to buy something, Billings is a little cheaper than Bozeman, and anywhere within 50 miles of Bozeman. But Billings has some challenges, and lower cash flow. You don't necessarily need to be in Billings to find a good investment. It is big enough of a city to where people would rather live outside of it, and commute to work in town. 

Bozeman on the other hand... People want to be in Bozeman, the Gallatin or Paradise Valleys, and the Gallatin Canyon down to Big Sky. Pricing has gone absolutely insane because of this. Let me know if you need an agent, or property manager!

I'm an investor, agent, and property manager in Bozeman, MT, and this is my 'investment destination'. I do look at other markets in the US, and all of them are tourism related, but Bozeman is the best. 

It's just got everything I need for me and my family. Excellent schools, major research university, clean air (outside of wildfire season!), clean water, millions of acres of public land to enjoy, good restaurants, lower cost of living than a coastal city, and the scenery... I have lived here for 20 years and would not consider living full time anywhere else.

Other markets we invest in, and are considering investing in, include the Big Island of Hawaii, east ID, NW WY, Southern AK, southern UT, and just outside NYC metro area. 

These forums always have some different insights, and I have a rather complicated hypothetical scenario I'd like to run by everyone. This is a question about the benefits of annexation, vs. subdividing some land. This land is outside a city, which is very fast growing, and has already annexed land similar in size and land use just to the north and east. Let's say it's about 20 acres in size, and is in a tax opportunity zone, and is currently zoned agricultural.

My thought is, what would be better? To annex this land, and get city services run to the parcel, or subdivide it up now, in a minor subdivision, and sell it off by parcel (limited to 5 lots as a minor). So there are huge advantages to both, as well as huge downsides, with huge implications to those as well.

Right off the bat, the cost to run sewer mains to the parcel is about $5.3M, but can be partly offset, by about 1/2 mile of city owned property. I believe some of that cost also includes regular special improvements like water mains, street lighting, etc as well. That would allow the parcel to be annexed, zoned R5 mixed use, and could support hundreds of units. Let's all this scenario 1. 

Scenario 2 involves doing a relatively easy minor subdivision, and total costs there would be less than $250k, with a simple unpaved road, engineering, legal fees for an HOA and bylaws, and that's basically it. The minor subdivision would take about 6 months to complete, and be limited to less than 5 lots. Similar lots, are selling for $1-2M in this area.

Something to think about when figuring this, is that if the city annexes the property, they will definitely amortize the cost over a decade or more of increased taxes of the improvements, by putting it into a special improvement district. This would negatively affect the possible equity in the property because it would greatly increase the taxes, as the city taxes are already pretty high.

So obviously scenario 1 is much more complicated, with many more hoops to jump through, but the amount of income to be generated seems to make it worth it. Scenario 2 on the other hand, would be much quicker, simpler, and also net a tidy profit for the amount of effort...

What would you do in this situation?

There are 17 states with no reciprocity, which a quick google search can elucidate, so you would need to take take ALL your education over again. Each state will want you to have the State portion of their education done too... So like $250 for 50 exams, $400 for the state portion of 50 states, and $300 for 17 states education. Then you have MLS fees which are totally variable. For example in Montana we pay about $3000 for MLS over the course of a year. And in Georgia, they take a cut from each sale. You're essentially talking about a huge waste of time and money here. Why don't you start out with one license, get some sales, and then consider a broker's license before you even decide to "branch out".

Welcome Aaron! I'm also an MSU alumni, in Microbiology (2014). You'll love it here. Check out some on campus groups and join lots of clubs. That is a great way to make friends fast and network. I used to be the on-campus liason for Montana Wilderness Association through Americorps from 2010-2014. Good times!

This forum is a great place for questions in our area, so always feel free to ask away! Take it easy.

Been working here in Bozeman for 20 years, property managing for 14 of those years, and real estate hasn't ever crashed. In 2008-2010, we saw a 9% decrease in pricing, but nationwide there was an average of 18% drop, so it seems the market here was twice as good to be in than the average market, since we had 1/2 the drop. If there is any economic turmoil which affects the National Economy, then yea, of course there will be a "crash", but I would venture to guess that we will still be better off than the vast majority of places in the country. 

If you're talking about Bozeman in the 90's, then that is just ancient history, before the town was "discovered" by REI's. I'd love to see some graph or chart showing how we have had crashed in the past. Bozeman easily has a 20% more growth in equity cap before it hits the average wage of an out-of-state "online worker". That is the demographic, in a 2 person household, which is buying up real estate in this town currently.

It's always been expensive to live here, but definitely more so now, than in the past. Our economy is more diverse here than it is in other cities in our state, and people are working online these days, so they can leverage the heck out of our market, buying up beautiful homes, in an amazing school district, with endless outdoor recreation all around... These homes are still a bargain in the eyes of this demographic. The only limitations I can think of which will inhibit growth is a dropping water table, and lack of labor force to work in the service industries.  

Hi David, so maybe I can shed some light on this. I'm an agent and PM in Bozeman, MT. We have had a huge influx of southern Californians into our market in the past 2 years or so, even before Covid. They sometimes buy sight unseen. What I am hearing from a good portion of them, is that they are liquidating assets in CA (and other west coast states) to buy real estate in Bozeman and surrounding areas. It's not just rental properties either, but also business assets in some cases, stocks, 401k's, etc. I think this has to do with our more favorable landlord/tenant laws, very low unemployment, and strength of our market. It has dramatically increased our market's pricing, and there is currently a huge turnover with many locals selling off and leaving, or just getting priced out, to put it bluntly. 

So if we are not the only market like this in the country, I would assume that is having a big impact on the S. CA markets, and other markets along the coasts. Obviously this is a very complicated issue with many facets, but essentially, I think it does in fact boil down to a few key things: rental laws, under appreciated markets, and unemployment/remote working.

Good luck! 

No, I think Belgrade and Livingston are right up there in terms of price gains, and even Ennis, Manhattan, and Three Forks are catching up. But the Gallatin, Madison, Paradise, and Shields Valleys should all be your market. There's at least a half dozen towns which are still good buys, and bedroom communities to Bozeman. In fact, people are starting to commute from Whitehall, which is in the Jefferson Valley, and also well priced. All of these areas are manageable in terms of distance. 

On the top left, click on those 3 bars, then look for notifications, then you can find them there. Set up your notifications to let you know when you get a DM, and it will send you an email as well. My number is also listed on my page on BP too.

I sent you a DM, feel free to contact me sometime. Good luck with the 4plex!