All Forum Posts by: Joe G Rampy

Welcome to BP, @Carrie La Seur. 

Welcome to BP, @Carrie La Seur. 

This is an example of why you should get lending parameters from lenders, not sellers. I've found that lenders tend to look at the business side of things. Where sellers tend to want someone to just write them a check for whatever the seller thinks he/she can get. Ask around to find a "local" bank that specializes in real estate lending then go make friends with them.

@Bill S. As I said, I'm new to this. The "personalities" I've dealt with over the past few decades were not of the "buckaroo" genus. So, the responses I've received caught me off-foot. Learning and adjusting going forward.

Thanks for reading.

I would suggest that you check out the podcast library and listen to those which focus on MF investment strategies. MF requires a different set of skills than SFR. Be prepared to go back to school (figuratively) and become comfortable with more complex deal structure and 6-7 figure financing. Good luck.

PM me if you think I can answer any questions.

On a separate note regarding being prepared: Several years ago, before he sold The Staubach Company, I have a close personal friend who worked as one of Roger Staubach's assistants for over a decade. Through her, I learned many things about what makes an extraordinary commercial real estate enterprise. One that sticks in my mind is that in the office buildings where he and/or his team worked, he had cell phone repeaters installed in the elevator shafts of both the office buildings and the attached parking garages. He understood that a missed call or a dropped call could cost his business 7 or 8 figures on any given day. That's preparation.

@Mike Baker Hey Mike. I need to get over there for a cup of coffee soon. Share some viewpoints over some joe. I may call you early next week.

@Gilbert Dominguez I will suggest that there are a lot of MF properties on the market for an extended period of time BECAUSE the brokers do not put forth the EFFORT to LEARN how to sell/market them.

@Shelli Callan When you speak of language in listings and sales contracts, I hope you realize that Montana has a somewhat dated government/business environment. Like 19th century dated. That standard listing language probably carries the power of the law if someone wanted to make a point. The Copper Kings may not hand out cash favors on the floor of the State House and Senate anymore, but things still get written into law that wouldn't survive the light of day in most other states. From my own experience, the greatest offenders are the state realtor association, the property management association and everyone involved with alcoholic beverages. That's not to say that the farming and ranching community is asleep at the wheel. With only a million residents, a little money can buy a lot of influence. There are a lot of inbred mindsets that do nothing to aid progress.

Although I'm new to the RE business, I have over 40 years of multinational sales and marketing management background in the information technology and oilfield equipment and services business. When I encounter a broker who has had a listing for a business for almost two years and hasn't bothered putting together the most basic presentation to prove that it really is a viable business, I become physically ill. Success will always be when preparation meets opportunity. Luck is too large a variable to count on. In the particular case I referred to above, the broker would have had to sell 7 or more $400K SFH to surpass the commission she would earn if she put a little effort into being prepared to sell the MF business about which I inquired. Whose money and time is she wasting? Her own? The Seller's? Not mine, for sure, because I won't let that happen. Even in a small market like Montana, there is always another deal down the street to analyze.

In SFR sales, you're always selling features like a view, a gourmet kitchen, a garden bath, walk-in closets, etc. In MF sales, you have to prove that the property will cash flow from Day One. Maybe not always, but if I can't see where the cash flows beyond expenses; where the value-add increases my investors' return in 3-7 years. You won't see an offer from me that your seller will like.

And to address your last comment; there is no profit for the broker or the seller if there is no sale. Carpe Diem!

New to RE investment. Focusing on syndicating 20 units or larger apartment buildings. Trying to build network of brokers with knowledge of off market apartments. Loopnet is a vast wasteland in this market (Montana / Wyoming) so I'm looking on MLS until I start finding off market deals.

I'm finding properties that "might" have possibilities. Some listings have been on the market for well over a year and the listing brokers are acting stunned when I ask for financials, rent rolls, vacancies, etc. The obvious question is, "how do these people expect to make sales without being professional?" Prepared to present the property? Do the owners of these buildings think that someone is just going to show up and write a check for the asking price? Without having a clue as to whether the building is an investment or not?

Is there a best way of dealing with these 'teaching moments on two legs'?

Thanks for allowing me a little rant. It's been a frustrating few days. If this is the worst, I'm good. But, Damn!

The challenges of local government.

I'll share more via PM.

@Jerry W., when you say 70% to 80% of your local tax revenue is oil related, how is that broken out? Is it severance tax? Sales tax from industry workers? Personal property tax of workers? Business equipment tax from service and supply businesses? Real estate taxes on plants? If you are including natural gas production with the crude oil production, then you have to look at the proportions.

Secondly, are you referring to state tax revenues or local government tax revenues? Remember, the BLM owns most of the mineral rights in Wyoming. How does that affect state and local tax revenues?

In a nutshell, only the price of oil has dropped, not natural gas. Natural gas bottomed in 2009. Wyoming is a huge natural gas producer. 

Of the significant tight oil producing states in the US; Texas, North Dakota, Pennsylvania, West Virginia, and Wyoming, Wyoming will suffer less than the others. That's my humble opinion.

A really big hurt problem belongs to the banks. Over recent years the big banks have earned (booked, charged) over $31 billion in front-end fees for underwriting loans to small and medium sized oil companies that were developing tight oil formations. Now they want to participate out those loans by selling them to other banks. No one is buying. In real estate, there are also hundreds of millions of dollars that were loaned to develop housing and infrastructure in oil boom areas like North Dakota. The blood has only started to flow in the financial community.