All Forum Posts by: George N.

If the area checks out, those numbers seem solid to me. When I first started investing and researching here I was scared away by a lot of the talk about 2% etc on here. And those do help the newbies from getting in hot water but they are very specific types of investments and there is generally a trade-off on appreciation/maintenance costs/and general PIA factor as you go up. I remember being afraid to post the numbers on my first deal here as I knew I'd have people who invest in 50K houses in Toledo try to scare me off and I didn't need any extra nerves. In my experience, a 1% rule property in a good area will cash-flow with a conventional down payment. As you move up from there you're doing better and if it's indeed in a good area you stand to gain in appreciation as well. I made a couple of investments just shy of the 1% rule in a solid area but I recognized rents were well below market and bought when the market was still hurting. So I'm looking at 25%+ appreciation gains on each property, or the equivalent of many years of cash flow. And my cash flow is decent too.

The first investment is the most difficult one to make, overcoming the fear and "analysis paralysis." In my opinion, If someone hits a solid single or double on a first deal you gain experience and can aim for the fences next time from a better position. Your experience will not only help you evaluate properties better but give you credibility with brokers, sellers, lenders, wholesalers, acquaintances etc. Not to mention added confidence. It's win/win/win. Half the battle is getting in the game.   

Hi John, I'm stationed up here right now. Not an agent (though I do intend to get licensed shortly) but I can answer questions. Coming from LA up to Great Falls, I wonder what your AFSC is, might be close to home. Feel free to PM me.

GF is a pretty blue collar town. It feels more like a rust-belt town than most of MT. That said it's more affordable than many other MT cities like Bozeman or Missoula. It's a lot like a Midwestern city in that it never really boomed or busted. SIngle family rental market here is very tight. Rental market overall actually. BAH, however, is abysmal. Worst BAH to home price ratio I've ever seen. All in all, not a bad place to invest, seems like small multi-units are attainable in the 1% rule or 7-8 cap rate range at retail. I focus elsewhere, my biggest fear with Great Falls is the reliance on the base and the one trick pony nature of a missile base. If something happened to it... man. It surprises me how few people care though.

Fox Farms area is the best school district by far (Meadowlark). That's the district people angle to get in but, of course, you get less house per your dollar as a result. I live on an acreage property just outside town. Most school districts are fine, it's not like LA up here.

If I was just moving to town and intent on getting an investment property I'd probably get a 4 unit on my VA, or FHA etc. if you're using it already. That way you can take your time and be pickier about a single fam. Of course, honestly, taking base housing while you work both angles might make sense as well.

Interesting, I noticed FI was a also more demanding than BoR, they weren't gonna buy off on 80% LTV either and were definitely more thorough. But compared to Wells either is a win.

I heard people sing the praises of local banks for quite awhile and didn't pay them much mind. Closing on a MHP/apartment complex deal here soon through a local bank. What a difference from working with Wells on my quads! It's almost scary how flexible/undemanding they have been. Wells had me writing letters for every little thing and wanted everything short of a blood test! I'm getting an 80% LTV 25 year amortized loan at 5% fixed for 7. Couldn't ask for a better commercial loan and it's been so hassle free it's hard to believe.

I'm using Bank of the Rockies but they don't have a Great Falls branch though they're in Helena. I know there is a First Interstate in town here as well as a Stockman. Those aren't quite as small as BoR but probably close enough. I know FI is being aggressive right now.

I think, as others have mentioned, there is a sliding scale here and the 80/20 rule applies. 20 percent of buyers are savvy enough to not need a RE agent. And 80 percent of agents are probably only any help to buyers who are quite unsophisticated. Like anywhere else though the cream of the crop is generally valuable to everyone.

Most agents I've dealt with have been little help. But a solid agent is part marketing specialist, part experienced negotiator, part legal counselor, part market analyst, part appraiser, part well connected individuals with a contact list of solid contractors, bankers, investors, off-market properties, etc. An agent is unlikely to be an expert in every field but a solid agent is going to better than you in a number of them. And since real estate is very much a people business, networking is key.

So, yes, technology is changing the industry but the internet is hardly a new sensation anymore and the earth shattering predictions haven't come to pass. The average buyer (especially younger ones these days) seem to see the size of a commission and being used to free access to unlimited info they have a knee jerk reaction against it. But it's an over-simplistic take. I see commissions coming down perhaps as people can handle more of the leg work themselves but most people simply aren't savvy buyers and will likely want to be represented in some fashion.   

I have to disagree with @Michael Seeker on a number of points. NYC has basically the same population it had in the 70's. And the way it is replenishing it's population is through immigration as natives are fleeing the high cost/low quality of life. California is in the same boat. They aren't magnets the way Texas is, for instance. The relatively small pieces of prime real estate in places like CA in NY are obviously in high demand, as you mentioned. But there is already a high premium paid for them.

I don't know how many people dream of up and living in Texas. But it's booming because of its economy and pro-growth policies. I think a lot of places in the Midwest could benefit from a similar dynamic in the future. North Dakota is a prime example.

Omaha is a pretty nice town. I was stationed there and I'm from NYC originally. I'd take Omaha any day and I know a lot of people who liked it and stayed. There is a growing immigrant population so there are a lot of people who have a dream of making it there and in other places like it as well.

Personally I think that while small sections of places like NYC and CA will always be in high demand for a small percentage of elites the long term growth prospects of places with a low quality of life for families, anti-growth policies, and high regulation are weak. I think people will move south and inland searching for opportunity and a higher quality of life and you might very well see a rebirth in small/medium size cities in the mid-west.

Interestingly enough just came across this...

http://news.yahoo.com/census-bureau-charts-urban-boom-secrets-america-fastest-194858645.html

I have to disagree with @Michael Seeker on a number of points. NYC has basically the same population it had in the 70's. And the way it is replenishing it's population is through immigration as natives are fleeing the high cost/low quality of life. California is in the same boat. They aren't magnets the way Texas is, for instance. The relatively small pieces of prime real estate in places like CA in NY are obviously in high demand, as you mentioned. But there is already a high premium paid for them.

I don't know how many people dream of up and living in Texas. But it's booming because of its economy and pro-growth policies. I think a lot of places in the Midwest could benefit from a similar dynamic in the future. North Dakota is a prime example.

Omaha is a pretty nice town. I was stationed there and I'm from NYC originally. I'd take Omaha any day and I know a lot of people who liked it and stayed. There is a growing immigrant population so there are a lot of people who have a dream of making it there and in other places like it as well.

Personally I think that while small sections of places like NYC and CA will always be in high demand for a small percentage of elites the long term growth prospects of places with a low quality of life for families, anti-growth policies, and high regulation are weak. I think people will move south and inland searching for opportunity and a higher quality of life and you might very well see a rebirth in small/medium size cities in the mid-west and elsewhere that position themselves properly. I think there are a number of examples where this is happening already.

Great post, would be a good blog entry as mentioned. I think these are also basic life principles, not just for dealings with high net worth people. I try to do the little I can to help out low net worth people, heck, anyone. One, because I enjoy it. But hey, you never know when someone can help you out in important ways that don't require a high net worth.

Forgive? The tone of that E-mail as a first contact with that amount of time passing? Fired, without a doubt fired. Unless I had missed calls and a number of E-mails that I didn't respond to fired a thousand times over.

There was no emergency. Power could have been killed. Emergency is a gas leak or flooding etc. It was your call, not theirs. And even if it was, my PM would be burning up the phone to get with me during the emergency. And if not? Fired. And they would have a dirty negative review from me on every corner of the internet. I would be so livid I'd head out to the property to personally inspect the work done and get second opinion on it. Even if it was all legit, fired. Any property manager who fails to communicate like that and who you don't trust should be fired. But I'd have enough doubt with this situation that I'd be considering looking into the facts in case challenging the bill is on the table. Did I mention fired? Fired.

@Giovanni Isaksen,

Excellent point on the psychological aspect of the downturn. Funny, I grew up during the dotcom boom and as a 15 year old fixing computers for all my friends/family I was considered a wunderkind and always told I'd be a millionaire. There is little doubt in my mind the optimism of that time had a tremendous under-acknowledged effect on people coming of age then (myself included) and it would stand to reason that the same is true for those watching the market collapse around them while coming of age more recently. Same deal with the important point on student debt. Everything points to a future where we have more renters and when I size up investments I keep the trends we're discussing in my mind at all times.

It's sad to think about, I think young people are getting a crap deal, but there are definitely ways to angle an investment strategy to gain from the trends.