All Forum Posts by: Account Closed

@Jeff Quinlan in your research make sure to check out supply.  I'm in Boise and talk with lots of out of state investors who want to buy and upgrade older apartment stock.  You can do it in Boise, but there is nowhere near the supply of potential properties as in a market like Phoenix.  Boise just didn't have that many apartments 30 years ago.  We are finding that we can build brand new for cheaper than buying and fixing all the deferred maintenance, upgrading, etc.

Thanks @Corby Goade!

This is the June 2019 set of news clippings that I've collected and send to our investors - I hope you find it useful.

Our little company doesn't usually look to make the local news, but we've broken ground on our two homes in Eagle and one large home in Nampa/Caldwell.  All three are spec builds for investors.  We also received design approval from Caldwell for our 24-unit building in downtown Caldwell and have another Caldwell site under evaluation which looks like it will yield 39 total units in 4 buildings.

June 2019 News:

A 2,000-home master planned community breaks ground on the south side of Boise. https://boisedev.com/news/2019/05/31/construction-starts-on-large-2000-home-boise-development-with-new-name/

913-home subdivision is up for approval on the western edge of Eagle. https://www.idahostatesman.com/news/local/community/west-ada/article231044388.html

Caldwell approves 187-home subdivision. https://www.idahopress.com/news/local/caldwell-approves--home-subdivision-off-marble-front-road/article_7c828edb-5954-5a48-92c1-045bdea4f4a8.html

Nampa is raising funds to add momentum to their downtown redevelopment efforts. https://boisedev.com/news/2019/06/07/new-fund-to-help-make-over-nampas-main-street-area/

Micron, one of Boise’s largest employers, has been cutting staff recently. https://www.idahopress.com/news/local/past-and-current-micron-employees-report-job-cuts-micron-silent/article_532e02a8-40ac-5cb3-9a87-7fde69714dc8.html

Downtown to get a new “jewel” office project. https://boisedev.com/news/2019/06/10/11th-and-idaho/

Boise approves changes to Accessory Dwelling Unit (ADU) regulations to allow larger units, but keeps the requirement that the owner live on-site. They will continue to look to other ways to add residential to existing neighborhoods. https://www.idahopress.com/news/local/boise-city-council-reduces-regulations-on-mother-in-law-suites/article_af524d2d-8bd7-5479-818b-c2ea3c67dc7f.html

A new hotel (Fairfield Inn) is planned on the northwest side of Boise Towne Square mall. https://www.idahostatesman.com/news/business/article231432183.html

Jerry’s Market on 27th street is being torn down for a new housing project near downtown Boise. https://www.idahostatesman.com/news/business/article231443793.html

Ada County home prices set another record last month. The median price for a single-family home is $342,990 – up $8,000 (2.4%) from the prior month’s record price of $335,000. This is a 12.5% increase over last May. https://www.idahostatesman.com/news/business/article231477538.html#storylink=mainstage_card3

Another out-of-state developer looking to Boise. This one is converting an old hotel into apartments in downtown. https://www.idahostatesman.com/news/business/article231558938.html

In the not so good news column, Fitch Ratings is estimating that home prices in Idaho are overvalued by 20% or more. It looks to be a factor of home prices rising faster than wages. I’m not so sure that the supply/demand dynamics locally are accurately captured in their analysis but only time will tell. https://www.idahostatesman.com/news/business/article231529863.html

A hearing for a major mixed-use development on 52-acres at the I-84 / Eagle Road intersection. This includes Boise’s first “Top Golf like” facility. https://boisedev.com/news/2019/06/18/eagle-view-landing/

Another downtown Boise apartment building planned. This one is targeting young professionals at rents the developer calls “attainable”. https://www.idahopress.com/news/local/story-apartment-building-going-next-to-downtown-boise-winco/article_6c4fcfd1-5858-57b2-a537-38adb4e95e31.html

Downtown Caldwell is growing enough to start talking about building structured parking garages. https://www.idahopress.com/news/local/2cscoop/could-a-parking-garage-be-in-caldwell-s-future-city/article_6352821d-c669-5e5b-8115-a32c400f8807.html

Another big transaction, this time to a Seattle investment firm. Two downtown high rises have been sold. https://boisedev.com/news/2019/06/19/laird-norton-us-bank-gardner/

Construction activity in the City of Boise (just the City, not the entire metro) have hit the highest levels in 5 years. https://boisedev.com/news/2019/06/20/boise-building-permits-hit-five-year-high/

A new commercial project in Eagle is looking at a condo approach (sales of units rather than leases). https://boisedev.com/news/2019/06/20/new-project-on-the-way-to-mccall-could-add-retail-and-more-before-you-leave-town/

Idaho unemployment numbers are out and continues (for the 18th month) to be sub-3% statewide. https://www.idahopress.com/news/local/idaho-unemployment-rate-remains-under/article_8dbd1c4a-c8ea-5338-9a67-25ee4020d9f7.html

Caldwell and Nampa will “move closer” to Boise – ITD plans to widen I-84 which should significantly reduce commute times. Our opinion: With jobs also moving westward (toward Meridian and Nampa) and the lower cost of housing in Canyon County, this area is expected to see a spike in development growth. https://www.idahostatesman.com/news/local/community/canyon-county/article231805598.html

Albertson’s is adding another store in the fast growing south Meridian area. https://www.idahostatesman.com/news/local/community/west-ada/article232024977.html

@Josh Splawn it looks like some good advice above, but here are a few other items for consideration.

1) Talk to title companies in your target (buying) market.  Here in Boise, they handle most of the 1031 exchanges and are very knowledgeable on the process

2) Have your buying property lined up first.  Since your buyer is also your tenant, I assume you can work with them on the official closing date.  Strike the deal with them as to price and terms but make sure they know that closing occurs only AFTER you have a property lined up elsewhere.  One of the brokers I work with here locally has a buyer who is scrambling right now to even find deals that fit his requirements. The clock is ticking on his 1031.

@Brett Wells A10 is a commercial lender with a headquarters here but they are nationwide.  I haven't worked with them but I think they have some pretty high minimums.  If you are looking at a construction rollover to permanent loan, can I assume you are talking single-family or perhaps a duplex given the amount?

We build houses for people all the time with that type of loan.  The buyer puts in equity (usually the lot owned free-and-clear) and then the bank finances it like a home-purchase mortgage but it has an initial construction period.  You pay interest only during the construction period and then it rolls over to a traditional mortgage.

Most banks here will do this but they all have different requirements with regard to the property type, projected value, individuals guaranteeing the loan, etc.

@David Olson this is some good analysis but as you say, it can also be a hinderance.  If you want my view, there is no "perfect" market.  There are just those that fit your goals and personal situation and those that don't.  Within those that fit, it will always be difficult to find "good" deals.  

Here in Boise the market is white hot and therefore cash flow is pushed down by all-cash buyers who don't have to factor in financing, 1031 exchanges, etc..  On the plus side, the rapid growth and lack of supply is pushing up rents and pushing up prices.  This is great for appreciation (not your focus, I know).

If you want cash flow, you likely want to look to the lower-growth areas where appreciation isn't factored in by others competing for your deals.  If you want balance, places like Boise might be a fit.  The investors we work with take the approach that they want to get a minimal cash flow return as well as long-term appreciation (and mortgage pay-off from rents).

I don't know about other markets, but Boise is challenging to find deals.  The sheer number of people looking relative to the properties available makes it difficult, but people are finding deals that seem to work for them. 

@Matthew McNeil Check out the article below. Boise has officially approved changes to the code for ADUs. An ADU can now be 700 sf total and be up to 2 bedrooms (prior limit was 600 sf and 1 bedroom). The prior standard required parking - now additional parking is only required if you go to 2 bedrooms.

The downside is that they left the requirement in that the owner must reside on-site (in the main house), so it limits usability as a pure investment/flip approach.

As @Teri Feeney Styers says, it may be better to try and convert to a true duplex.  The code in Boise allows for a duplex on any lot zoned for single family (there is no need for a rezone, etc.).  The challenge is often more physical - how to split the house; do you add-on or just carve-up, and of course, is there sufficient space for all of this.

https://www.idahopress.com/news/local/boise-city-council-reduces-regulations-on-mother-in-law-suites/article_af524d2d-8bd7-5479-818b-c2ea3c67dc7f.html

@Samuel Viscio you are correct that the population growth is coming from a large influx of out-of-state folks.  The majority of those are from California but in my experience many have come to escape some of the craziness (and high cost) of the coast.  All in all, you'll find whatever niche you like here. 

On the plus side, the influx is pushing up home values.  This provides appreciation over time but also means that as people get priced out of the market they need to rent for longer before they can buy.  So not only is the population growing but the percentage of people who rent is also growing - a double boost to landlords as rental supply is not keeping up with this level of growth in demand.

@Mindy Jensen I'm trying to update and make use of the new format but I'm having difficulty.  I see the section where I can input investments but when I click on it nothing happens (no message, no pop-up box, etc.).  I can change my profile words but not add investments.

Also, possibly related, I tried to change my profile user name to match our new company name but when it doesn't "save".

Can you point me the right direction, I'm not sure who can help me figure this out.

Thanks!

Thanks @Adam Fleck and @Kory McCain.

Adam, the news this month did seem to slant toward Canyon County.  Caldwell is very hot and I'm personally big on it.  They have a new downtown that I think will draw people beyond just price point.  If you haven't checked it out you should.

With that said, the news fluctuates so I wouldn't read anything into one month.  I just grab the news articles as I see them.  The ones for Boise don't tend to be as often but they are often big developments and big subdivisions.