All Forum Posts by: Connor Dunham

@Wes Blackwell - I don't much care for your style of blasting people that question the relevance of this topic - better to smile and move on. Moving on:

I'm a life-long Alaska resident and have been receiving "basic income" my whole life, so can add to the conversation here. We have no income tax, no state sales tax, and use the royalties from oil and gas to fund the state government. Our state and local taxes (SALT) amount to about 4% for the highest decile, and 6% for the lowest decile. Funding the government hasn't been working so great recently and the Permanent Fund Dividend (PFD) has been cut for the last three years to a much smaller amount (about $1,000) to fund the state budget.

The PFD was originally established as a way for the state to share its wealth with the people who live here. The fund was seeded with oil royalties from about 1975 to 1985. Since then, the Alaska Permanent Fund has been invested in markets around the world and is a premier member of the International Forum of Sovereign Wealth Funds. No part of the dividend is a direct royalty from the oil leases here, but many uninformed people believe it is directly from oil.

The PFD has been a really big topic because each person gets one. When you add these together, they can make a really big change in family budgets in the low-mid incomes. Can you imagine giving a family of 5 an additional $15,000 all at once? How about $60,000 if this proposed basic income becomes a reality? How often the money gets distributed will influence if it gets added to housing budgets. As a general observation, most people don’t end up putting it toward housing here. Here are my personal observations of where the dividend gets spent:

• Credit Card Bills – people will often spend in deficit here. When they receive the PFD, it will go towards the credit card balance they’ve been carrying for the last 11 months.
• Cars, Trucks, Cell phones and TVs – People that want to have the latest and greatest will use it to upgrade these or go bigger than they would have otherwise been able to afford.
• Donate it to a charity – usually people donate a small part to a charity.
• College savings – Responsible parents may choose to put their child’s dividend toward a college fund. This is what I do for my children’s income.
• Go on vacation – Many people use these to go to Hawaii in the winter, or at the very least Seattle to get some more vitamin D.

Other observations– other than save for kid’s college, people don’t really invest the money. It gets distributed, then immediately spent. Can you imagine the lines at Costco? The saddest thing about it really is that parents have full autonomy over their child’s income. Their money gets spent, but not always for their benefit. Additionally, people that need the money feel entitled and it shows in their behavior. I would rather have a population of people who work for everything, than a bunch of people dependent on this income.

My personal history of spending basic income has been: Years 1-12 - Parents spent it all. Years 13-19 Computers and video games. Years 20-present, tuition and student loans. Certainly, my personal spending of basic income got better over time, especially as I gained control over the funds. But the average high school educated person (we are a blue collar state), it will barely touch their wallets and won’t have any wealth re-distribution effect for them – which is the idea behind it correct?

O okay, sorry. This guy must be your relative or something. Same (not common) last name, same town.

Yea, I thought I recognized your name from doing title research on a foreclosure... You skipped town when you couldn't make payments and got foreclosed on.

Looking at your numbers, conventional financing wouldn't apply. You'd be looking at recreational property or RV financing with interest rates in the 6-7% range. Also, research local codes if building within city limits. By the price you mentioned, I assume this property is in the sticks somewhere. Even that comes with headaches like drilling a well, testing it with your fingers crossed, dealing with waste, and paying for a new electric service. Additionally, the price you mentioned doesn't include labor. Quite a few more factors than you're figuring in your numbers. I would assume 70-100 thousand as a bare minimum to purchase something on land with utilities hooked up.

@Benjamin Sutton Single or Multi family... Hmm... Yep, there's a lot out there right now. Appreciation is likely going to be low for little while so make sure you get a good cap rate, using rents that are reasonable to slightly below market. PM if you want a second opinion on neighborhood or rent pricing when you get to that stage. Best of luck on your search.

Nice fresh prince reference. So, with the construction loan, you were able to short plat before converting to conventional. Interesting...

Hey, Thought I'd join the conversation now.

I have an appreciation factor in my valuation model. There could be depreciation, but it all depends on what your investment time horizon is. I just have a flat rate since I'm comfortable with a 20-30 year trend. There are other huge nationwide factors that come into play such as what the FED is doing, but the local effects all come back to demographics. How well does the Anchorage market do in retaining businesses and individuals who generate capital, build businesses and start families? What does the migration look like? What does the birth rate look like? Etc. What you’ll find is we do pretty good on birth rate and pretty bad on retaining talent and valuable contributors. This is the brain drain people talk about. There’s still a lot of work that needs to be done to provide housing and urban recreation for the 18-30 year old demographic so we can retain more. I’m interested to hear what other thoughts people have along these lines.

@Jamie Rose thanks for the reminder to get back to this thread. 

@Or D. Yea, most people don't decide to retire here, but some do. There's been plenty of discussion of our market on here if you key-word-search it and how we're still in a recession. Certainly, there are abundant outdoor activities with a 30-minute drive. I think Soldotna is a great location as prices aren't as high, there's still fishing, and it's half the drive. The views aren't nearly as spectacular as in Homer though.

Hi @Or D. , Homer is a unique market. End of the road where fishermen, artists, homesteaders, and hippie's all meet. I know a couple of people that do vacation rentals down there and also know that the hospital employs a good portion of the town. I make the 4 and half - 5 hour drive from ANC once or twice a summer but am far from having local knowledge. The electricity rates aren't great and LNG isn't available for most places yet. Just some considerations when you're factoring in costs. Why Homer?

If you want to avoid disclosing you're the owner to the prior owner's mortgage servicer, just pay it off and make sure the lien is released, then go through with the refinance. you should be able to get that amount unsecured no problem (though secured would be cheaper).