Investing in a Small Town

[Mav Larson]

Hey All, Everything I read recommends investing in places where jobs are moving to, population is increasing, infrastructure is great. It’s true - these are all great recommendations. 

But counterintuitive to all that advice is a small, mountain town where the population is hovering at 2,500. The town is close to ski resorts and the redevelopment agency has just started investing a lot in the downtown area. The buildings in this downtown are currently a lot less than comparable buildings in surrounding towns. Because of the high mountains, nature, and skiing, most of the towns rely on tourism. 

Helping this small town rise up seems appealing but on the flip side, it also seems very risky. 

The plan: I’d buy a building, do much of the renovations and buildout including a residence, and then find someone who wants to open a brewery in the building.

Has anyone invested in small towns like this? I’m a buy-and-hold with everything so far so I usually look for solid buildings with long term cash flow.

Any input or thoughts would be greatly appreciated. Thanks.

[Bob Langworthy]

I bought an office building in a smallish town of 20,000. It needed some work and there was already a lot of office space in town, but it has worked nicely for me. The key for me, however, was having an anchor tenant (my accounting practice) in place before I bought the building. Here are some thoughts:

1) I would start talking with potential tenants in advance and look at doing the build out to their specs. 

2) How long will the micro-brew fad last? Remember when Curves was everywhere?

3) If it's a micro-brewery, then it is a very small business that may or may not be run well.

4) Does the town need a brewery?

5) What about nice, clean office space for an accountant, attorney, financial adviser, insurance agent, mortgage broker, etc.? 

Hope this helps,