All Forum Posts by: Patrick McGowen

@Brad B. I have some stuff going in Plains, MT which is kind of Polson adjacent?

@George N. Will do, I have taken to doing a newsletter to keep the group more connected, particularly for those that are only occasional attenders, join the meetup group.  

@Alan 

@Alan Brownundefined  Consider joining us next Thursday, we would really value your experience and enthusiasm.  

Love this thread. REI Montana Mafia is gaining momentum!

Hey Shaun,

There are a few Montana folks on here, seems like a year ago I could count the BP membership (active at least) for the entire state on my fingers, but more active members every day.  There is a group of us in Bozeman that get together twice a month to discuss real estate and sometimes play cashflow game.  If you are ever in Bozeman on a Thursday evening, search meetup dot com for Bozeman cashflow club.  If you are in Bozeman at any other time, I am always up for a cup o jo and a visit with a fellow real estate investor.  

Cheers.  

No fair @bre 

@Brie Schmidtundefined I didn't know you were going to call me to task on my goals. This year I will fall pathetically short of my original goals.   

"1. I plan to turn four-plex into condos" I learned something I didn't know that a condo where one owner owned more than 12% of the association, condos don't qualify for traditional financing.  This hinders my idea of turning to condos to sell off.  I did study up on what it would take to turn into condos.  I was even working toward doing something where I would offer owner financing, I just couldn't quite make the numbers work, at least not until I had a little more cash.  Had to let this idea go, or at least put on hold until I stacked more cash.  But I learned something so don't feel bad about burnt calories.  

"2. Clear up access issues on piece of vacant land then ... tbd"  Okay, I have not done Jack squat on this.  In my defense, I have picked up a few other things I am working on that are really going to tie up my free time probably for the year.  Other goals I have picked up are as follows: Get local meet-up for investors stable with good regular attendance.  Expanding a business my son and I do by one location.  Making planned improvements to one existing rental.  Initiate work on online education/training program that could provide me some steady passive income.  

"3. Make a solid run at syndication" I attended a 3 day seminar on syndication, I read Samuel Freshman's book.  I did put together some of the draft syndication docs and made an offer.  If offer was accepted, I had a lawyer in place to help me finalize docs and had a few folks very tentatively interested in investing. Offer was not accepted.   

Summary, I will not achieve any of three goals listed, but I did make tangible effort and learned a lot.  I have done well with the other goals of "keep on doing what I have been"  I am still saving 15% earned income and all investment income, this should put me into a position to have a good down payment for another buy and hold in 2016.  I continue to study, learn and try things.  I also realized I really need to focus in on what goals will be most likely to get me to my larger goal of $5,000 per mo. passive income.  Also, I realized I need to focus on fewer things (or one thing) and push through to completion, I am kind of chasing one thing after another right now and feeling a little overwhelmed.   

Thanks for your update Brie, very cool to see someone aim big and accomplish at least most of what they shoot for.  

A common mistake that new investors make is to assume the market will continue to behave how it has in the recent past. Having many years of experience and seeing the market change over time, can inform investors making them better prepared for potential market changes. On the other hand it can get people stuck; my grandpa never invested a dime in the stock market his entire life because of what he saw his family go through during the great depression when he was a child. 

Instead of investing for decades, can we learn something by looking at other markets around the world? I recently traveled to Mongolia for my 8-5 job, and took this picture of a local bank. The top three numbers on the sign are the return on CDs for different monthly terms. 18 percent for a 12 month CD!!! Sign me up. Except that Mongolia has seen something like 20 percent inflation. Since I went two years ago, the exchange rate has changed from around 1500 Tugrik (Mongolian dollar) to 2000 Tugrik for one US dollar. The bottom three are for different loans. I think the first is unsecured, the second is business and third is auto. I can’t imagine these are annual rates, let’s assume they are monthly rate ranges depending on your financials. So if the U.S suddenly had 20 percent inflation and banks were offering rates like those below, how would this impact your portfolio? What would your new investment strategy be? If you knew this change was coming in the US what would you do to prepare, and how would you take advantage of this market shift?

@Jay Hinrichs

 or @Lynn Burson

Have opportunity to buy hangar at small airport.  I found this old post and thought maybe one or both can give advice.  There are 12 hangars in all, some around 1000 s.f some closer to 1300.  all occupied.  Land is not owned, but leased from city.  Numbers annualized are

Gross income 24k

prop tax 1700

land lease 900

utilities 430

Insurance ?  Would you get extra insurance to cover expensive planes, or make sure airtight lease requires renter to insure their stuff

Would you provide snow removal on something like this?  I assume they are only accesses occasionally.

Other costs?  Issues?  

What would you pay for something like this.  

Are there any unique lease provisions you use?  Thanks for the help.

Awesome Mike, you know I am super excited for you.  It was great to see you and Brenda continue to have hurdles and challenges come up, and just keep working through them until finally succeeding.  Great things to come.

I have two different friends that were looking at single family homes for vacation rentals, one in Kalispell MT and one in Bozeman MT.  in both cases they ran into trouble because of covenance or association requirements that limit rentals to monthly or longer.  In my area, VRBO is not a huge thing, but gaining traction so seems like more restrictions on it are coming.  So make sure you check into this for a given property and make sure it can be rented as vacation rental.  You might buy a property that the owner is currently doing vac rental, you buy it, only to find out a few months in that it is not allowed and you are stopped.  Then you go monthly rental and get half the rent and eliminate your ability to use it.  

Also make sure you get tax advice.  If you use the property (even a couple weeks a year) there are tax implications.  

Good luck  

@Anthony Kondor 

@Anthony Kondorundefined, you can do "creative financing."  All of the ideas discussed above are in Brandon Turner's book, so get and read that.  What I have found with people is that if you are not positive cashflow now (that is you are spending less then you earn and setting money aside each month to invest), that will not change as you build your portfolio and at some point you will get overextended, making your problems much bigger when you hit a rough patch.  

I believe every investor should work on their personal finances first.  Get to the point that you are setting at least a few hundred aside each month.  This guarantees success, once you get finances under control, start working on creative financing, and you will either do something with no/low money down, or you will continue to learn so that when you have tens of thousands saved up, you will put it to work that much more efficiently.  

Steve, 

welcome to BP. If you go to meetup dot com and search Bozeman cashflow club, we meet every other week. This isn't so much a BP local meetup, but a lot of the club members are on BP. I am always game to get together one-on-one for a cup o jo and talk REI, so PM me if you want to meet for a visit.

Pat

@Trent Fisher

In a lot of ways Montana is really diverse, but one common theme is low population density.  To quote a really insightful researcher "62 percent of Montanans live in 0.1 percent of the land area. In contrast, 82 percent of the land area in Montana has a population density of less than one person per square mile."  

George covered most of the high points of the diversity in his post, I wouldn't have a lot to add. For Eastern Montana, growth is fueled by .... well fuel (oil), so they are in for some swings currently, be careful.  Billings is probably more stable as it is the largest community in Montana, but the rest of Eastern Montana (Miles City etc.) is small enough that even a small change in population (say 50 oil workers move away because they lose work), can destroy a rental market.