All Forum Posts by: Michael Rutkowski

I am usually doing rounds all day as well. I am always glued to my phone lately, so you can always call me if you have any questions. Weekends are usually better for meeting up, but we work 7 days a week, with maybe a few days off here and there. You can always come to one of our properties during a turnover, and you can get to see what we actually do, and if it is something you would be interested in doing. Weekends are always busy, so that may be the time to check out one of our places.

As for hiring, I'm always hiring for construction and cleaners. I'm having to compete with huge investors up in Big Sky and Bozeman, paying $50-$75/hour, and I'm in the same boat as everyone looking for workers these days. I am trying to get a project in Bozeman permitted, this summer, and will definitely need some help on that. I've also got another project in Paradise Valley I'd like to button up this summer. I don't really have any work for things like real estate investing. That is just a hobby for me, and the actual work is in the property management and real estate side of things. Feel free to get ahold of me and we can discuss more. 

Hi Tory, The main reason water/sewer/trash is covered by landlords is because, usually in city limits in Montana, there is one water service to a building, and it is just easier for a landlord to have 1 meter, instead of multiples. You can of course have the city install a water meter, or put your own inline water meter, with a radio frequency monitor on it, to bill tenants separately. I bought one for a property and it was cheap, like $80 or so. You download an app, and it watches and graphs your water usage. And trash is a nice little bonus to throw on the utilities for the tenants. It is usually the same, low cost/ mth and the city can bill you on the same bill as water and sewer, to keep it nice and tidy for bookkeeping. I admit though, it has been almost a decade since I rented LTR. I just cover 100% of the utilities now doing STR. And of course, stay far away from covering any sort of gas/electric costs. Cable as well.

I did once go to a REI meeting in Bozeman, and they used to be held at my brokerage actually! I don't really have much time anymore to devote to the meetings, but I still meet with investors in town from time to time. Let me know if you'd ever like to catch up sometime. We are entering our busiest season, and we forecast 2021 to be pretty killer for tourism. The main issue we are focusing on is finding enough labor to keep track with the tourists and guest we service. If you ever need any help looking for property, or talking about strategies besides fix and flips, let me know. My favorite properties are land deals, and commercial properties these days. Take it easy, and enjoy this nice spring snowstorm we had! If we don't get a major storm or two in the spring, it is fire all summer long!

I'm here in Bozeman, and I can tell you that Bozeman and Big Sky may be some of the toughest markets to "get started in real estate" right now, just about anywhere. There are still markets in Montana which are very nice for investing, both for equity and cashflow. You've got to know the markets. It's not just Bozeman and Big Sky, there are many other places you can invest in around here. If you can manage your property you have an advantage, if you can build you have a HUGE advantage. Price of materials has skyrocketed, which I've been talking about since last year. Reality is really hitting some REI's home now. It will get worse before it gets better. Feel free to contact me if you want to talk about some smaller markets.

I'm over here in Bozeman, and yea it is tough. You will not find anything here off market. What is wrong with a smaller city? There are plenty of deals out in towns less than 10,000 people. You need to find the balance of price vs commute. Also, real estate investing is not solely about cashflow, but also about building equity. Again this might be tough in an inflated market, but if you can factor in some equity into a property when looking at it, they become more appealing to you. I could probably name a dozen smaller towns within 1 hour commute to Billings and Bozeman which could cash flow.

I've talked with my lender of almost 10 years, about how I would ever go about selling my own portfolio to a potential investor. It's really tough. First of all, with less than 20-25% down on a portfolio, your odds are nearly zero. So that's a big one there. If you can wrangle that much cash, maybe even 30%, you've got a much better chance. But it will be an investment/commercial loan, and your bank will want a lot of documents from you. If your business that you mentioned involves real estate investing, property management, or some kind of accommodations, then you're gold. If it has nothing to do with that type of operation, you're going to have to write them a book report on why they should lend you money. And to add more complications to this, a bank may not want to qualify these properties on STR income. In fact they may tell you, that you can only count 75% of fair market LTR rates... It's always been like that for STR. Then you need to still account for all expenses, and so your seller is going to need the PnL's for like 3 years from the current owner, showing no losses throughout Covid. You will need to be able to be below 45% debt to income on these, so a high interest loan will not be your friend here, and the commercial/investment loans are at around 5-6% for this type of property portfolio. It's not impossible, but it's not easy either.

If this was a bank appraisal, the bank may not underwrite it, or may require you to pay some points, or you can back out based on the appraisal contingency your agent hopefully set up for you in the buysell. If it is not a bank appraisal, it seems like you just have a decision to make. Buy it, or negotiate, or walk away.

I rented a home in a high end subdivision with a strict HOA. You need to find the right fit, and not just accept anyone. The way I do it in this situation is to hold an open house. I do 15 minute block showings, and hand out a LENGTHY application to anyone interested. I take notes on each person I meet with, taking names down, details, what kind of car they drive, etc. I pay special attention to those who did not pick up an application, in case they want the place later down the road... My stack of applications is usually like 6" high, and it is usually gone in a day. I tell them to fill it out completely, and follow any instruction I give in there. I have no "fee" to apply. Most PM's charge for this, I just charge for a background and credit check. In truth, I only need to really look through the best applicant's apps, which is why I don't charge. The reason I want them to fill out and initial at the bottom of each of my 10 pages, is to weed out the ones who can't read, or don't care to read, the very specific app. It is a good indicator as to who will read the lease, who will follow the lease's rules, and who won't. Once I know they have initialed it, and they send it back, I invite the prospects who I liked, and seemed "with it", back for an interview. When I have about 3-5 good prospects, who I know will not be a problem for the neighborhood, then I run the checks, and choose a tenant.

As an agent I can explain a good part of this.

Flake 1 - Zillow. I hate Zillow leads. I pay $1000/mth for 9% market share in my zipcode. 95% of my calls are people just looking. Zillow does nothing to vet these leads. So I finally cut them out of my marketing budget this year, and it feels really good! I waste so much time with them it's crazy. Your agent probably feels the same. Some zipcodes are worth it though, but in a tight or expensive market, no thanks.

Flake 2 - Owner financing. Owners don't need to finance jack these days. People are buying with cash, sight unseen. Unless you're putting 50% down, no one cares.

Flake 3 - Sounds like an average real estate agent honestly, with a combo of the owner financing I mentioned above.

Midwest Flakes - Again, the market is so hot right now, you'd be lucky to pick up a cashflowing multi-family. You've got to imagine that there are probably thousands of people like you, well qualified, and serious investors, looking to score on good property.

It's just a sign of the times. It's been like this for years, progressively getting worse. Agents are also in a bind with the lack of inventory. Homeowners are not really selling, and we are at a 1.5 million property deficit. Furthermore, the FHA has lengthened mortgage forbearance, and many markets with nothing to do with FHA are also still in forbearance. It's a historical lack of inventory. We're all feeling it.

Traditionally, I have always paid water/sewer/trash, which is common with Montana landlords. You've got to put something in the lease about leaks. I had some young college kids move in one time, and I explained about leaks. "Call me ASAP". Of course a toilet started running... for a month. The utility bill was $1,200. I kept their deposit. It is their responsibility only if you outline that in the lease.

Also, I think a landlord would be crazy to cover electric or gas in Montana. Likewise, internet is their deal. For STR, you cover ALL of it. So that's always a kicker when someone wants to do STR through the ski season.

I'm going to agree with Jay, Nathan, Brian, and others here. Your broker needs to step it up for you. This is a legally enforceable contract. You spent your time and money helping these people. It should also be the first question that the agent asks their buyer, "Have you been working with another agent? Or have you signed with another agent?" This is a business like any other, and a signed contract doesn't absolve the buyer of their duties and responsibilities in the contract. Just my 2 cents. But I would definitely go with another broker, sounds like yours is a pushover, and those brokers aren't worth working with.