Let's talk about the oil boom

I’m a buy and hold investor looking to expand my portfolio. I was sitting on a plane last week with a guy who ran an equipment dealership in North Dakota and was talking about rents upwards of $3500/month in boom area where the oil rigs are. I looked and seem to be able to conform $1000/room rents in the area.

I am interested in buying a lot and moving a trailer or modular on site for quick cash flow. My worry is residual value. How should I amalyze a deal to make sense of this? My gut is that it needs to be a financed deal with 3 year payback.

What are your thoughts?

I don’t believe it. I know quite a few people who work on oil rigs and fly back and forth down to my area to visit their girlfriends and wives and kids and yes, they can make $100K a year, but everyone I spoke to that works on oil rigs live in military style camps heavily subsidized by the oil company and workers only pay a couple hundred a month for room and board. Why would they spend $1000 a room? Who’s going to rent it? The pizza guy?

This ad is by no means unique to what I could find. I believe that the company pays for the house, and many seem to be furnished.


I don’t know, that’s why I am asking. I got this information from a guy on an airplane, but it seems to be legit from what I can see. There are “man camps” renting out at $1700/month that are basically camper trailers with utilities hooked up.

I don’t know. I guess it must be a different company that charges that kind of money for the worker camps or the oil company might be subsidizing private companies that rent it out.

All I know is that a lot of these guys working on oil rigs down there send their money to my city (because my area is depressed so properties are cheap) and buy apartment buildings in my area and let their wives and girlfriends run them here while they work down there and they fly down here for a couple days once or twice a month to check up on things. One of them even tried to convince me to let a pm company run my buildings and work down there with him through his contact because he was putting $100K in his pocket after expenses. Not a single one would invest in real estate in the oil city, yet they are buying up properties down here left, right and center. Makes you wonder why they aren’t investing there if they are making that kind of money.

Yeah, good question. What city are you in?

Metro Detroit

I’ve read the same info.–starting salary at Wal-Mart in Williston, North Dakota is $17.00/hour. They were losing their workers to the oil fields.

Huge oil boom due to fracking oil shale. This has brought in bars, prostitutes, and a real housing shortage.

Somewhat the same is happening here in Hobbs, New Mexico. Housing very expensive or impossible to get. Market prices driven by the oil and fertilizer industries.

Boom towns sure beat Bust towns. There is a different energy and atmosphere when companies are bidding for workers.

Any of you unemployed out there reading this, there ARE jobs and opportunities. You just gotta get to where the getting is good.


The oil country is a good investment even though many of people from out of state feel that property is over priced. My wife and started out 10 years ago when they announced that a new Oil refinery would be built near Makoti, ND. We purchased as much as we could and spent thousands of hours remodeling and renting single family homes. A lot of the people have come to ND from places where housing has be depressed so they have sticker shock. You can still buy a decent house for 200K.

I think the individual from Detroit has the right idea. I remember looking online about 5 years ago and you could buy houses out there for $300. Thats a lot of potential for prices to go up!

I worked in the oil fields for about 5 years because I had to have a job to buy more houses. The man camps in ND are charging from $130 to $185 a day and the companies are paying it. Many of the large companies have built their own camps. Many landlords are asking and getting $1,000 per room when renting, but all those properties are typically fully furnished with all utilities paid. The companies that I rent to run background checks and do drug testing and typically take better care of the houses than the families I have rented to.

The none oil field companies are the one’s paying the $1,000 per room. Like road construction, utility construction crews. You can look on Bizmanonline.com and Craigslist and check the ads for housing they are there to verify. You have to have some knowledge to get these prices, because I have been told many time I would not get those rates yet I have about 6 houses rented to companies. People also have to know that many of these contractors pay their employee’s a perdiem of any where from $75 to $150 per day. Typically the companies who provide housing don’t pay that much.

ND has had the lowest foreclosure rates in the country and that has been going on for a number of years. Property values have been going up over 15% per year for about 5 years. I think ND is a great place to work on real estate investment. The one problem is that the banks here are very conservative and they are very conservative on the loans. Typically the want from 20-40% down on investment property. I wish that I had more banks willing to loan more money and I think that I would be retired now. Good Luck!

Any speculation on what will be happening for the next ten years?

They say that there is enough area that they will be drilling for another 15 years, of course that all depends on the price of oil. They say that if oil is above $50 a barrel they will be drilling here. North Dakota has been spending a lot of money building and improving the roads and infrastructure. The state has also been working hard to reduce and possibly eliminate property taxes. The measure to eliminate them failed last fall. The backers of the initiative in my opinion did not have a good enough game plan to replace the lost income.

They did have a ceremonial ground breaking on the Refinery about a week ago. Major construction is supposed to start this fall. I do have I lead on some lots if your interested, just send me an email. I am not presently in a position to buy right now and I several other projects in the works. My plan is to pay for everything in 5 years. Keep in mind you should do your own due diligence and come out and see what is happening. I do realize that there are other places in the country that are starting to emerge as good places to invest


I am very interested. My plan is to secure financing with a bank with 20% down and a five year note. Buy a lot and purchase a modular home to put on the lot and have it all buttoned up within two months or so. I might have to send my local contractors up there to do it, not sure.

But a modular will keep the majority of the labor at a low labor rate and only the final labor will be at the high wages in that area, like concrete and utility connections.

I have a local guy that could put in the post and pier foundations. You may want to bring your people to set them. There are three lots that I know are available, they want $20 K apiece which is high. You would have to bring water and sewer to the sight but that is near buy. The main problem is they are right next to a power substation. The last lot I bought in town was $2,500.

Jeez…lots around here are $30k-60k. 20k sounds like a bargain.

Do you mind sending me information on some lots? PM please.

I sent an email. The tax rolls only show the lots at a value of only $200 and taxes of $3 per year. It is in a small town but the location is good.

You guys need to take the specific deal off line. “The discussion forums are intended for asking and answering ONLY INFORMATIONAL questions SPECIFICALLY related to real estate investing.”



We did, and he’s not selling the lots. He’s just pointing me towards some resources to use. I don’t believe we are violating the rules.

Thanks for the reminder though.