All Forum Posts by: Corey Meyer

I am looking for help with Direct Mail marketing ideas to attract potential homeowners to sell to me in rural Montana for the purchase of an investment property that would be my primary residence.

I have a couple of dozen property addresses that fit my investment strategy in the Gallatin Canyon between Big Sky and Bozeman, Montana. The majority of the homeowners are seniors that have vacation cabins/cottages in the mountains of Montana.

I am looking to house-hack for the purchase of my primary residence and am seeking a 2-3bedroom/ 1-2bath home.

I have been a resident of Montana for 13 years and am actively looking for a place to call my home.

I am not a big-time investor and I think a heartfelt handwritten letter would be most effective. Thoughts?

I was also planning on slipping in a photo of me. Thoughts?

What would you write in a letter (homeowners are most likely elderly and out-of-staters with a vacation home here in Montana) asking if they would be interested in selling to a young man in his 30s looking to make a house a home?

Dear Mr. and Mrs. Smith, ??????? Thanks, Corey

For that quantity of letters:

Handwritten by a woman with decent handwriting placed in an yellow invitation style envelope with a handwritten address and a real 1st class stamp. Send to the list every 30 days kind of like this:

Hi David & Allison

My name is Corey. My Wife Michelle

and I would Like to buy your house

4213 Warbler Way

Please call me at 406-400-0000

Corey

Perfect! To the point, no fluff. I like it! Thanks John.

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Originally posted by @Michael Rutkowski:

Hey, you probably want to target a few of my clients :).

I also get these offers on my properties from time to time. Let me tell you an anecdotal story... Once I actually got a little angry over an unsolicited offer. The local investor, who may or may not be on BP, sent me a cheap little postcard mailer with some language about how they were interested in my property, and that they "know it has some deferred maintenance, and we have priced it into our offer already." This is a STR, fully furnished, with an incredible CAP, and around 400, 5 star reviews mind you. I would never sell this property, as it's my family's future. But I saw his offer, and instead of shredding the card, I sent him a counter offer of 3x the offer he sent me, and explained that at that price it still had a 6% CAP, and would sell in a few months if I listed it. Never heard back from the person, which was my intent. So if you're going to low ball, you better be ready to alienate yourself from the local investor community. They are now busy remodeling trailer homes last I saw.

I also know the Canyon inside out, and have worked in many of the homes as a contractor, and agent. This is one of the most expensive areas of Montana, and the Northern Rocky Mountains. If you're on Zillow, you will immediately notice some listings under $200k out there... Those are FS lease cabins which need to be owner occupied as a heads up, and would not qualify as FHA since they are not on foundations. Feel free to ask me anything about the Canyon.

I don't have any tips for you because these people are pretty savvy, and many are business owners, that I know. I manage an iconic home in the Canyon across from Storm Castle, and it is going up for sale for over $2M+. It has the rental income to back it up. It would be exceedingly difficult to find a home which is worth buying and justifying with CAPs in the Canyon, in Big Sky, and even Bozeman/Gateway these days. You've got to get creative. I would look at probate dockets, and start soliciting there. Usually those need to be quick sales.

Michael,

Thanks for all of this info!! Storm Castle is a great location, my real estate mentor has a place a couple of houses north of MWW right on the river. He has a mother-in-law suite that he STRs and is doing well. It's his numbers I am reading to potentially pull the trigger on a property. Ideally, one where I can both live and STR maybe my camper or an ADU. I like the thought of living halfway between Big Sky and Bozeman as the pool of ladies for an eligible bachelor is slim here in Big Sky and I am not getting any younger!

I currently own an STR in the Mountain Village and an STR in the Meadow Village (launched in 2014) and both are having their best year yet on the vacation rental market. I would like to add a Canyon property to complete my portfolio set of Big Sky Mountain, Meadow, and Canyon properties.

It's a crazy expensive and competitive market out there for a small guy like me! I wish I would have been a little savvier in 2007 when I moved to Bozeman and 2011 when I moved to Big Sky and been more hip to the real estate game. But I was still a young guy then with only student debt to my name!

So what would you recommend a 31-year-old looking to invest in more properties do here in Big Sky? My thoughts are hustle, get creative and the Gallatin Canyon..... too me has the most potential to find a diamond in the rough that will cash flow well and could potentially be in my price range. I really want a property that needs some sweat equity. I am also currently living out of my camper (see fox news article above) as I STR both my places in Big Sky.

I have a good amount of cash ready to execute on a deal if I can shake one up and I think a Direct Mail Marketing campaign might be the ticket or I straight go door knocking.

It's not easy being a little fresh fish in the big boys playground but I won't let it get my hopes down!

If you know of any deals in the area or have any advice for a guy like me, let me know!

Cheers,
Corey

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Originally posted by @Robert Bowser:

Loving this thread already. I'm in Orlando but my father-in-law just built a vacation ranch/home in Whitefish and I've spent the last 3 Octobers hunting elk in Emigrant, MT south of Bozeman. Love it out there and have been toying with the idea of building for rent housing there. Absolutely agree on doing 5 lots or less to begin with. If you can get infill, do them attached, a row of 5 townhomes with back yards for dogs and 2 car garages. Construction cost will be lower, infill means you're likely close to city utilities because like Michael wisely said above, septic can be an issue. I'm a development lawyer for several national publicly traded homebuilders as well as a several apartment and commercial developers and consultant fees are no joke when doing a big subdivision--legal alone can be eye-watering, but of course nowhere near as bad as NOT getting good legal advice. Good luck and please keep me posted, I'd love to hear more.

Thanks Robert,

Whitefish is beautiful and has a great vacation rental market. I've actually guided elk hunts just south of Emigrant near Dome Mountain in the Paradise Valley, what a beautiful space! Not a bad idea to toy with, the demand has gone through the roof for rural rental properties, especially with the linger covid, more eyes are on rural Montana than ever before. I hosted 40% more guests YoY than in 2019 here in Big Sky this summer.

There are a few signature new build developments near Emigrant that were built specifically for vacation rentals. I am looking at land in any direction from Bozeman within a 1.5-hour radius to potentially build. I am thinking of doing an A-frame design development. This company does kit style builds and I am interested in this and also other Pre-fab style homes. There are a few great companies out of Salt Lake, Jackson Hole and Idaho.

https://everywhereco.com/ayfra...

A subdivision of 3-5 homes gives me a little better grasp of what is recommended in development, especially for a beginner.

I like Big Sky best because I currently manage 10 vacation rental properties here and see actual numbers of what kind of cash flow I could anticipate with a development of my own, I also am most connected here with contractors.

I will keep you posted on my progress, good luck elk hunting if you make it back up this way in October! Bow season opened this weekend and the bulls are bugling!

Corey

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Thanks for all of the info Michael. This opened up a few more boxes for me to check up on and I have homework to do before approaching the seller. A few of the pieces I am unfamiliar with like a land use lawyer. I have touched base with a surveying company and civil engineer in the past. A friend of mine in town operates a dirt work company and handles sewer and water. I didn't think to check up on the current seller having a potential lien on the property (I will check with the title company.) I have worked with Gallatin County Zoning and Planning in the past and found them to be very helpful and hit me straight with the questions I had on another lot a few years ago that ended up being in a riparian zone with a dry creek that had a water table within 4 feet of the surface and they advised me to get an easement to put a drain field on a neighbots undeveloped lot, I asked the neighbor and they denied the idea so I passed on the lot

This lot is in the meadow village of Big Sky, it looks to be abot 2-3 acres and right off of Ousel Falls road on the way to the Yellowstone Club. There are nice homes on either side of the lot. I don't think city sewer and water extends to this zone as I believe the large Firelight Development is on its own sewer and water and not Big Sky sewer and water.

I would take the role of GC on this job. I live in Big Sky full time and really thrive at making contact to contractors and scheduling, and juggling multiple tasks.

Thanks again for all the info!

Corey

Originally posted by @Michael Rutkowski:

If you're asking for a 50/50 split, they're going to ask you to develop that for them, and will ask about your background and expertise. That's going to cost hundreds of thousands of dollars. That's if everything goes well. If you need to hook into the sewer, it will cost more. No one is going to do work for free, and you won't need an architect, unless you are building the homes, but you will need a surveyor, a civil engineer, a structural engineer, a land use lawyer, at least 10 different contracting companies, and probably much more. Keep in mind that these people are probably getting an offer every week to develop their lot, but probably can't as they have a lien or mortgage on it. This is something that you need to research on your own before even approaching them. I approached a guy in Churchill to buy out his restaurant and home. We had 2 visits, negotiations, and THEN I checked the property in the Courthouse, and saw it was being foreclosed on... So do your homework.

Some advice about development though:

Check to see where the water table is or if there's a riparian habitat nearby. Just because there's land doesn't mean it's buildable. If the water table is within 4 foot of the surface, forget about it, it will never be approved by DEQ, and will need a public connection to sewer, and Big Sky is probably going to slap you with a SID at this point, because it's infrastructure is present and being used in most places I know of.

Do not approach ANY engineer in town without a Land Use lawyer. Engineers will do what you say, but it's really not their responsibility to know whether or not your project will work out. You can finish up with them and have some colorful awesome looking plans, and then the DEQ in Bozeman will just deny it all.

Price out infrastructure like roads, lights, fire hydrants, treatment systems, before you even approach the owner. You will quickly see in most cases, it is impossible to do without some major financing.

Always try to carry the cost of water and septic to the buyers of lots. This will devalue the parcels a bit, but trust me when I tell you that a modern sand filter system at 10k gallons/day will cost over $1M. This is of course, if you can even build a septic system on the land.

Be ready for it to take years for approvals. Sometimes the DEQ will want you to dig test pits and wait a year as soil tests are done. Google "Gateway Village", and read about it. That has been over a decade in the making. You will need money for lawyers and engineers throughout that entire time. So always have a spare $50k ready for that.

Don't do a major sub, do a minor of 5 or less lots. Far less regulations, and infrastructure costs are greatly reduced.

Know your target demographic. Big Sky people are not the type who like traveling on gravel roads or living on 1 acre lots. You may want to pave and divide no smaller than 5 acres. That may not work out in most cases.

Good luck!

0 Votes

I am looking for help with Direct Mail marketing ideas to attract potential homeowners to sell to me in rural Montana for the purchase of an investment property that would be my primary residence.

I am looking to house-hack for the purchase of my primary residence and am seeking a 2-3bedroom/ 1-2bath home.

I have been a resident of Montana for 13 years and am actively looking for a place to call my home.

I am not a big-time investor and I think a heartfelt handwritten letter would be most effective. Thoughts?

I was also planning on slipping in a photo of me. Thoughts?

Dear Mr. and Mrs. Smith,

???????

Thanks,

Corey

1 Vote

My investment Portfolio is in Big Sky, Montana. I actively invest and manage STRs here and am looking to grow my portfolio. The most challenging aspect of investing here (besides high prices) is that there is very little inventory as Big Sky is one of America's newest cities. There wasn't a single home here before 1968! Since the city itself is just being built there are very few options for me to increase my portfolio of buy and hold.

I am seeing a large increase in demand for STRs here and am contemplating developing solely for the purpose of creating a perfect STR. I am not a developer but I believe it is in my wheelhouse. I have colleagues that are Architects in Bozeman, mentors in Big Sky that are developers, and I am connected to most of the pieces of the puzzle for developing a lot. However, I don't have the capital to buy a lot here, only enough to build.

There is a lot in town that is For Sale by Owner. Is there a way to pitch them a partnership long term Buy/Hold? The seller might potentially be interested in partnering and making a greater return on their investment by developing their lot....?

Thoughts? 50/50 Split?

Corey

2 Votes

Originally posted by @Rachel H.:

@Corey Meyer You may need to do more market research in the area. You can do this by networking with others in the industry such as mobile home park managers and/or owners, mobile home dealerships, local mobile home supply stores, contractors who specialize in working on mobile homes, talking to other investors who invest in mobile homes in your area, and talking to residents who own and rent mobile homes in the area.

Most of this requires you to go into the field. Take the time to meet people. Get as much information as you can. Once you have more information about the market (supply and demand), then you'll be in a better position to assess the market and make a detailed plan towards your goals.

Hope that helps!

This is exactly what I needed to hear!

1 Vote

Originally posted by @RJ Broussard:

Hi Corey, If you listen to any of the BP videos they always talk about what is the investors WHY? So in reading your post it seems like you want to hold property for the appreciation. I would suggest working the numbers backward and see what solution works. Are you willing to hold if you make $0 in cash flow. Research what the local rents are and what lot rents are. You need utilities and who pays and other expenses, taxes, maintenance (MH and land), can you pay for management. In general I usually see estimates for 50% expense if you own the MH and 30% if you just rent the lot.

gross rent - expenses = NOI - debt service = cash flow

Thanks RJ, I will work the numbers backwards. It is a goal that this investment cash flows positive initially as I don’t have the luxury to simply hold for appreciation.

The difficult part is that the price is relatively high for this type of acquisition because the lot itself already has decent value. I guess bringing a larger downpayment might be the way to get it to cash flow positive.

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Investment Info:

Other buy & hold investment in Big Sky.

Purchase price: $189,000
Cash invested: $5,000

My real estate agent/business partner sent me the listing the day it went on the MLS, at the time I was on a 12-hour bus ride heading due north out of Dehli, India bound for the remote western Himalayas. I already knew what I was looking for, I knew the numbers, as I manage several Airbnbs in this location and after looking through the photos I called my agent to put in a full price offer.

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

I have my hand in the STR cookie jar of Big Sky and had been waiting for a cookie-cutter investment deal similar to the property I already have.

How did you find this deal and how did you negotiate it?

I was on a 12-hour bus ride from Dehli, India to Kasol in the Himalayas when my agent at home in Montana emailed me the MLS listing. I scrolled through the photos and emailed her back that I was very interested. The next day she went into the unit and sent a video via fb messenger, walking through and talking about everything in the unit. I put then executed a full price offer within 24 hours of the property being listed on the MLS. The owner accepted as I arrived to the Himalaya.

How did you finance this deal?

This was the most difficult part of the deal. I put an offer in without pre-approved financing and the seller had accepted. I had been traveling for three months and my bank statements had only been drawing funds with little inflow. Bank after bank turned me away. I was nearing close without financing and had to extend the deal as I kept on the hunt. Finally, with help from a mentor, I found a local portfolio lender willing to finance the deal.

How did you add value to the deal?

As an STR investment, it was crucial that I get the property listed as quickly as possible. We were in the middle of the busy season with the ski resort running at full speed. I called up a few buddies who were able to help with the 10-day mini-renovation. We painted the unit, made some upgrades and then were out!

What was the outcome?

Guests arrived within 10 days after close and the unit had over $3,000 in bookings within the first week on Airbnb. Then Covid-19 hit, the ski resort closed and everything flatlined. Now I sit and wait. Hopefully, I have the cash to weather this storm.

Lessons learned? Challenges?

The Covid-19 crisis hit two weeks after the purchase of this property. Time will tell what this brings.

0 Votes

All Forum Posts by: Corey Meyer

Corey Meyer has started 22 posts and replied 66 times.

Post: Thoughts on Pacaso LLC co-ownership model for luxury second homes

Post: Direct Mail marketing content help for targeting Montana seniors

Post: Direct Mail marketing content help for targeting Montana seniors

Post: Strategies for working with landowners to partner on development.

Post: Strategies for working with landowners to partner on development.

Post: Direct Mail marketing content help for targeting Montana seniors

Post: Strategies for working with landowners to partner on development.

Post: Best option for mobile home on private land?

Post: Best option for mobile home on private land?

Post: Purchasing, sight unseen, from the Western Himalayas of India.