All Forum Posts by: Bryce Allen

Simply put you’re priced out of Big Sky with little hope of ever purchasing. Some inventory will be coming online up there but it’s going to get snatched up quick. “The billionaires are pricing out the millionaires.” IMO save and look at Four Corners. It’s going to see growth and included in that is “affordable housing”. It’s not going to happen overnight but it is happening. 

In November I spent the day with the CFO of the group that owns/is developing everything in BS. There’s going to be a continued sever lack of workforce housing on the mountain. Their development plans are gigantic. The YC already can’t house all of their employees, they have them in Bozeman at hotels and are building in BS and at the GGI to house them. 

Workforce housing makes zero sense on the mountain due to the value of the land. They’re going to build some token housing, but you’d have better luck with a lottery ticket than snatching one of those units. Four Corners isn’t the prettiest area, but it cuts down the drive by at least 20min from BOZ. 

IMHO adjust your expectations, accept you can’t afford to live on the mountain, find the next best thing, and focus on that. Good luck! 

@Patrick McGowen sorry I missed this. Hopefully I can make the next one.

@Daniel Hyman Bozeman is adding, on average, four people a day. The housing market there hasn’t slowed down one bit in this nonsense. There is a divide in Bozeman, IME, between people that have recently moved there and people who have lived there 20+ years. It’s not bad but it lets one know migration patterns. Bozeman has a great location and a robust economy, so it is a very viable option.

My opinion that that there will be more people moving to ID and MT using social arbitrage to become “wealthier”. So yes, I think there is going to be more growth to come out of this.

No it is not a “necessary” evil. From an economic standpoint it leads to deadweight loss (DWL), so market inefficiencies. In addition, there’s no guarantee that the people who actually need it will get it.

When they say “you’re crazy”, say, “no, I’m not”, and then proceed with your plan. Who cares what other people think?

I have two NavyFed loans and have had the same experience. Ive had to get the loan officer's boss on the phone and chastise them. Poor communication would be an understatement. However, for a little work I have two loans at 3.75% and a HELOC, so meh. I have experienced the same with a few other loan officers that I ended up firing. In the end business is booming so if you fall off the earth they don't care.

@Alma Mills they may do a HELOC on non-OO but they would not lend to me because I have more than four rental properties, something to be aware of depending on one's portfolio.

There is lots of good advice here for and against a refi. The things I would think about are, your appreciation isn’t realized until you refi or sell. If you sell and the market continues to appreciate you lose that additional equity. If you don’t refi and there is a market down turn you lose out on the equity.

I am in the for refi camp, with the caveat that you'd have to move that money to a market where you will cash flow a good amount to cover both properties. I have one SFR on the coast of CA. It barley cash flows but it's no hassle and I can't beat the appreciation. I refied last year, took that equity, and bought 5 units in the Midwest cash. Now that those units have appreciated and I'm pulling out cash out in a refi and buying more. I will have four units (sold one already) that cash flow, and almost none of my own equity in those now four units. One thing I believe in is safety in numbers. It is very unlikely all of my units will go vacant or need major repairs.

The final thing I’d consider is where your market is in the real estate cycle. Historically the RE cycle lasts 18 yrs. Every city is in different stages so it is incumbent on you to know where your city is. Is your city still in the expansion phase or moving to hyper supply? I see a lot of talk about the market is blah, blah, blah. The bottom line is every market can be in a different part of the cycle, and a different part within a phase. Ask the people who sold in Denver in 2014/15 and then bought back in at a higher price.

@Jonathan Hulen you make a great point and I'm not debating it. However, the colliery is the appreciation you're missing out on. The South Bay isn't going to suddenly become in less demand in the near or long term. I know the South Bay will appreciate over $16,500 yoy. So while it would ruin your DTI long term buy and hold on the CA coast is rarely a bad idea. Just food for thought.

To answer the OP's question, it depends, mostly on your age. I typically take out loans as to not tie up my cash and pay off my debt early. I'm currently using the GI Bill so I got into a $550k property for $40k (no PMI). With the appreciation I hope to refi into a conventional in the Spring with a limited amount of capital out of pocket. In that situation it makes sense not to pay cash. However, if I was older the safety of having a property paid for would be very appealing. So, it depends.

Investment Info:

Large multi-family (5+ units) buy & hold investment in West Allis.

Purchase price: $294,500
Cash invested: $144,000

This was my first commercial MF and off market deal. My agent brought this deal to me and I jumped on it. The previous owner took exceedingly good care of the building and there was nothing that need to be done except to raise the rents. This purchase exemplifies the commit and then figure it out philosophy. I got the building under contract and then figured out financing.

What made you interested in investing in this type of deal?

I wanted to get my feet wet in the commercial space as I look to grow my portfolio and negate risk with more units.

How did you finance this deal?

I originally used liquidity from a refi, HELOC, and a personal LOC to make the purchase and then refi'd that money out after closing.

How did you add value to the deal?

There was not much of a chance to value add to this deal. I will be raising rents after closing.

Lessons learned? Challenges?

Commit and then figure it out. Believe in yourself and stay the course.