Cheyenne, WY. - Anyone know this market?

[Mike D.]

Hello, BP cohorts! 

I posted a similar request on the Wyoming board but haven't received a response in several weeks so I thought I'd pop in here for advice.

I live in northern Colorado but have been looking in Cheyenne, WY for my next SFR or Townhouse purchase as investment/rental. From what research I've done the Cap Rate and cash flow seem much better than Colorado...however, what I have yet to be able to find is solid information on what condition the market of Cheyenne is in. I understand basic stats; average rent, homes on market, etc, but I'm looking for real on-the-ground thoughts on how solid Cheyenne is for investing in property. Rental vacancy rates, appreciation, is the city too dependent on energy with too much risk of vacancy if markets crash. Etc.

Is there anyone out in BP land who can offer any thoughts, experience or opinions on Cheyenne, WY?

Greatly appreciated.

~Mike

[Bill S.]

@Mike D. There was a meetup happening there on an irregular basis. Not sure of the status this year. I just did a quick search and see that there was some discussion about this in the Cheyenne forum. 

My 2 cents on Cheyenne. There seems to be lots of building but I'm not too sure why. State government is in a holding pattern or shrinking due to decreased energy revenue. The area saw a nice bump from the fracking a few years ago. My brother in-law works as an architect (they design projects for public facilities). He has seen a significant slow down. They are now chasing single family home design projects. My step father was a higher ranking state official for many years.

I think they are over built but I don't have numbers for that. My brother-in-law told me a 300 unit residential development on the books. Everywhere you look there are multifamily homes under construction. There are some jobs coming to the area due to things like the Wal-Mart distribution warehouse and I think there are a few other similar projects underway as well. Not really the kind of jobs that support SFR purchase IMO. Not sure what other job growth there is.

The flipping business is challenging because unless you are a GC and run your own crews there aren't really GCs I found (granted I was looking during the height of the fracking boom) that would mess with a complex rehab. Many of the trades do not run crews so the project price has to support the main guy and his family and life style. Prices I was quoted were 2x what I could get locally. In addition the building department thinks it's a major metro area so within the City permits are a HUGE hassle according to the contractors I spoke with. Most preferred to work without permits.

Sure cap rates are better but I think Cheyenne is moving into a period of low growth. It could last 10 years. When I returned to the area in the mid 90s I interviewed in Casper. At that time, it had been 15 years since a new multifamily project was built. Now granted, Cheyenne is not Casper but the economies are not independent either. During tough times the state government hunkers down and doesn't spend money on capital projects or grow the payroll. 

It seems the market (rents and home prices) could level off and interest rates tick up. If your holding time frame is 20 years then you should be ok but if you have to sell next year or in 5 years you might find yourself upside down.

I would love to see data showing job creation in the area by market sectors which could give some support to the idea that the music will continue.