Investors in Montana!

[Jack McWatters]

HELLO ALL!!!

I am new to the real estate business I actually live in California right now but my favorite state by far is MONTANA That is why I want to give back to the beautiful state and the occupants! I Love everything about the state of Montana and I would love to invest! If you love to invest in Montana please message me and let’s get to know each other!!

I am a welder by trade and I would love to have a side income on top of my main job! I really hope to be financially free and be free to weld as much as I want. I hope to move to Billings or Bozeman within the next few months or so once I finish up school here!

[Michael Rutkowski]

Originally posted by @Alissa Engel:

@Michael Rutkowski

Flipping and getting stuck with long term properties are two different things. It DID crash hard during that time frame....I lived it. I bought May 2007 for $165K (that sounds like an amazing deal now) and by May 2009 that same property (condo) was selling for $90K. I also owned several properties in Great Falls during that time. They decreased MAYBE $10K.

Now let’s talk rents: I was renting that Bozeman condo for $1100 in 2007. I renovated it, and by 2009-2010 I was only renting it for $775. The Bozeman market was so saturated with rentals from new builds that didn’t sell when the market tanked or properties that people couldn’t sell and were forced to rent when they lost jobs. Rents stayed the same through the recession in Great Falls.

That Bozeman Condo took about 8 years to come back to break even. It took 10 years before it profited. We sold it 10 years later for a descent profit. But it wasn’t worth years of stress. Bozeman is a volatile market. It appreciates big but it also tanks big. Now, do I wish I’d bought 10 of those condos in 2010? Yes, I do. But I was reeling from what that market was doing. Flipping probably was a good idea at that time, but good luck getting cash flow there as a newbie now, so that means it’s a risky move for an out-of-state newbie.

Does Great Falls, Billings, Helena, Butte have the appreciation like Bozeman? No, but they are much more stable. I still wouldn’t touch Bozeman right now, but I’m not a risk taker. 

Well, I will agree to disagree. First, there are two basic ways to invest in real estate. One is for rental income, which it seems as if what your strategy is, and the second, which is my strategy, is equity investing. Bozeman is not for most rental income investors, especially fix and flip investors, and it is indeed hard to find properties which cashflow here. 

But compared to the rest of the country's markets in 2008-2010, Bozeman's market was very healthy. When you say the word "condo" I do think that is more volatile, and I have never owned a condo before, but I do watch those markets and they traditionally have bigger dips and gains than single family and multi-family housing. That's associated with the cost of ownership of condos, ie condo fees. Also, your one data point is not representative of the market as a whole. I have been in this market as a property manager and investor since 2007, so I'm aware of what has happened in this town since then.

Here is a graph of real estate prices for SFH in Bozeman since 1996. You can see a small healthy dip around the 2008 Mortgage Crisis, from around $310k in 2008, to $280k in 2011, which is a 9.7% drop, as compared to a Nationwide average price drop of 18% (https://money.cnn.com/2008/12/...) and then a rebound, and it seems as if home prices are skyrocketing. Source: walletinvestor.com

I'm generally not a fan of these types of graphs, but I would even argue that the rebound was faster, and more intense than this graph portrays. I'm glad you found other places in Montana to invest in, and if you had held onto that condo, it would probably be selling at around $400k right now, depending on where it is... So that's why I prefer to hold onto real estate for the long term, and if it gets good rental income, that's great too.