I have a challenge for you to apply your minds to. I live in Northeast Montana ( many miles from anywhere ). I am a farmer with a lot of equity and some cash available. I am interested in real estate investing. Over the course of the last year or two I just keep being drawn back to it. We have invested in a development and a large apartment complex as a minority share. I don’t want to expand my farm ( and add more work, I work hard already and enjoy what I do), and I want to diversify into RE, and have my equity and money work for me.
The challenge is this: I don’t want to leave my farm. I believe that REI is possible from here and I know that many of you invest in more areas than just your immediate vicinity. There are many who post on this site that seem quite capable of creative problem solving. I am willing to travel some and I am a hard worker and a fair manager.
If you were going to do REI from NE montana, how would you go about it? What areas would lend itself to this? Is part of the answer to have a “team” as the gurus call it on my cell phone speeddial?
I have lots of ideas, but would love to hear yours.
I happen to live in the last best place.( no one interested ina few acres of flat land far from anywhere )
Thanks for replying, though, I remember from some of your other posts that you invest far from home. Utah, isn’t it? How do you make it work? Do you have to travel a lot, or how did you get the people in place that you can trust?
like someone said, you need to kiss a lot of frogs to find a prince.
you definitely need someone competent that you can trust
when dealing far from home.
i tried to look for someone who was willing to look beyond the
obvious and go out of their way for me. after that things fell into
place. i bought 2 homes without ever going there. i’ve been there
4 times this year, but its mainly just to hang out and have a good
i had an eviction and i hired a lawyer to handle it.
i’m also working with a neighbor who’s encroached upon my
property. according to my tenants he’s anti-social and is a jerk.
they got the city to threaten him with legal action if he doesn’t
tear down the wall. i wrote him a nice letter saying it was probably
an oversight and he should call me. i fedexed it to him and he called
the same day. he sounded really nice over the phone.
so i guess it takes some trust and some faith and the ability to keep
your cool, to invest out-of-state.
Sounds like you solved the problem of long distance! If you don’t mind my asking, was this person a realtor, partner, broker? How did you actually decide to use this person, just based on phone conversation?
I really appreciate your replies, I have so much to learn, and I really need to get the education of getting something done. Nothing teaches better than having money on the table.
Anybody else have some suggestions, I would love to hear them.
If there is one piece of advice I could give it would be do nothing to put the farm In any jeopardy what so ever it is great that you have that equity. How is the apartment complex going is it providing any cash flow what so ever? In the county you live in how are the tax liens? that might be a great avenue for you to explore! I would leave your equity alone until you figure out what exactly you want to do with it. Start with a little money if that is working for you go for it all. If you were to loose the farm (no pun intended) you also loose your job. That is not a good risk to take!
Thank you for your reply, I have been reading here often lately and come to respect your insights and admire your attitude. Keep it up!
To answer your questions
I will not put myself in jeopardy of “losing the farm”. We do however have a very low debt load right now and are planning on using the equity to further invest after we learn the ropes with some smaller deals.(your advice was right on with our own thoughts.)
As far as tax leins in my county, I have studied this some and my problem is that my county seat has a pop. of 2800 men, women, kids, dogs, and goats.(reference map of NE Montana) Not a big pool, and most leins are against farm land(could be my neighbors.)
The apartment complex was an investment in new construction and will start cash flowing as soon as occupancy gets to 80%. It looks like it will be soon although a little behind schedule. We are looking at getting 7-10% cash return on our investment($300,000) as well as appreciation and principle paydown within the LLC that owns the company. It looks good if it all works as planned, and I have been really impressed with the company we are going along with.
I understand that you also do RE deals that you don’t have to go see to do. Can you do that long distance? Would you have been able to start doing what you are doing from a long distance?(without your current mountain of experience :D)
Yes that can be done long distance I own property in 3 other States that I have never seen! All I look at is the numbers…
Also let me ask you this as a off the wall thought you said if you bought tax liens in your county they might be your neighbors That could be an awesome thing! Look at it like this just because you ended up with a property on a tax lien does not mean that you have to take the property. The chances of you ending up with a property are about the same as winning the lottery. And if you did what is stopping you from going to the owner and financing him on the lien at say 12% interest over 60 months… For instance
Term of the loan: 5 Years | Loan amount: $2,000.00 | Interest rate: 12.000%
Starting date of the loan: September, 2005
Monthly mortgage payments: $44.49
Total interest paid over the life of the loan: $669.33
It would be a help your neighbor thing and where else can you make 12%
yes i spoke numerous times over the phone. the person is an agent and also an investor.
he works with builders and commits to a strict take down schedule. [meaning the bldr has to
start working on a certain number of houses every month]. this is so the bldr gets good pricing
from the developer and his sub-contractors. in return for this commitment, the bldr throws in
some incentives. the agent then uses investors to fulfill his obligation to the bldr and the
investors get incentives they normally wouldn’t have gotten. so the more people the agent
gets the higher the discounts everyone gets.[upto a certain limit, you can’t have a 100% of
homes in a subdivision that are bought by investors.usually no more than 20%]
so, simply put, find an area. get a yellow page listing of realtors, start calling frogs until you think you might have a prince. Ask enough questions and when you think you might have someone you can work with, take the big step and trust them with a deal or two. then go from there. Probably my biggest hurdle is going to be learning to trust someone on the other end while I am going through the initial learning curve.
Thanks again for your example of how it can be done,
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After you understand the basic principals begin your search for “a real estate prince.” Cookie-cutter real estate and real estate professionals are not going to cut it in future markets.