Alaska is a chang'in and when? (Metlakatla: 2015, foreclosures, rentals)

[pittsflyer]

I don't watch TV much its gone down hill.

Originally Posted by riceme

Wow. Your posts never cease to amaze me.

Who needs TV when you have this kind of entertainment?

[pittsflyer]

You could rep me since im providing the entertainment

Originally Posted by riceme

I have to spread some reputation around...

[Metlakatla]

Originally Posted by pittsflyer

So how does this housekeeper buy the little inn? Yes I agree with you that it might soon be possible as real estate starts to tank but the last 20 years no one could touch commercial property unless they were filthy rich or they were leveraged out to their eye balls and were one bad month away from being insolvent.


But you are right there may be some opportunities coming up, but its not honest to pretend like the little guy could get in on the action in the last 20 years because I was looking on the real estate listings and the prices were sky high.

I guess you still think I'm trying to offer advice to those who will soon be jobless or something. I'm not. I'm not claiming that every little guy can "get in on the action." Most people aren't smart enough. But here's a variation on how it's done.

The housekeeper quits Princess and gets a job that pays something other than minimum wage even if he/she has to leave the area to do it. Maybe goes to work at one of the mines. We used to beg for housekeepers. The housekeeper buys a piece of land. The housekeeper then has a small cabin built, buys a business license (the only cost the same as a couple of cases of Lone Star), and rents it to vacationers. The housekeeper continues to work smart and eventually adds another cabin. Lather, rinse, repeat.

Another -- you're young and broke, but you scrape enough money up to go to guide school and get certified to guide. You get a job guiding in Alaska. You work a few summers, get a good name, and eventually work out a deal to purchase a charter business from a guy who's retiring.

Another -- you're a teacher. You buy a house. You turn it into a bed-and-breakfast. You then add an apartment or two, maybe a beach cabin. Add more later, and put in an RV park.

I've seen all three of these scenarios several times. Now, I know you're not getting that I'm not exactly advocating that all you oil and gas people turn into innkeepers or buy fishing charters -- you've probably missed that boat. But I honestly do believe that anyone who can get their hands on a good piece of land in SE can eventually build up a good business provided they have a brain.

[Metlakatla]

Here's something someone could work with:

Island Realty LLC - Little Yellow Cottage - HARRIS RIVER - $125K

Newer construction, located in an absolutely stunning area. Qualifying for a $125 K loan isn't that hard. It could bring about $150 - $200 per night on a seasonal basis, and you'd have a waiting list of people wanting to use it.

No property taxes, not a lot of restrictions concerning what you could build. Use the first summer's proceeds to throw up a little cabin....and so on.

You could do this, rrpearso. You can surely qualify for a loan, or does being in arrears on your child support affect your credit score? Not sure how that works.

[pittsflyer]

How much did these people have to leverage themselves out when they bought this real estate?


I suppose it boils down to risk tolerance, in the last 20 years, unless you were extremely lucky, you would have to sign on to a pretty hefty loan in order to get in. That means that if you have one or 2 bad months your could be in trouble.


As I said earlier on the only way to get in on the action without leveraging yourself up to your eye balls is to be involved in something totally unrelated that pays bank then you become an "investor" and just fly into Sitka or where ever and buy properties. Its like real life monopoly at that point.


In your 3 examples I am willing to bet money that at least 2 of them were highly leveraged for 15-30 years and maybe one of them got lucky and bought something below market price. Am I too far off?

Originally Posted by Metlakatla

I guess you still think I'm trying to offer advice to those who will soon be jobless or something. I'm not. I'm not claiming that every little guy can "get in on the action." Most people aren't smart enough. But here's a variation on how it's done.

The housekeeper quits Princess and gets a job that pays something other than minimum wage even if he/she has to leave the area to do it. Maybe goes to work at one of the mines. We used to beg for housekeepers. The housekeeper buys a piece of land. The housekeeper then has a small cabin built, buys a business license (the only cost the same as a couple of cases of Lone Star), and rents it to vacationers. The housekeeper continues to work smart and eventually adds another cabin. Lather, rinse, repeat.

Another -- you're young and broke, but you scrape enough money up to go to guide school and get certified to guide. You get a job guiding in Alaska. You work a few summers, get a good name, and eventually work out a deal to purchase a charter business from a guy who's retiring.

Another -- you're a teacher. You buy a house. You turn it into a bed-and-breakfast. You then add an apartment or two, maybe a beach cabin. Add more later, and put in an RV park.

I've seen all three of these scenarios several times. Now, I know you're not getting that I'm not exactly advocating that all you oil and gas people turn into innkeepers or buy fishing charters -- you've probably missed that boat. But I honestly do believe that anyone who can get their hands on a good piece of land in SE can eventually build up a good business provided they have a brain.

[Metlakatla]

A lot of them bought raw land, had it developed and built their businesses one piece at a time. I'm not really familiar with the details of their original loans, but I will say that none of the people I thought of when writing those examples has failed. They've all prospered, actually. But again, I'm not really advocating that you go this route after you lose your oil and gas job.

ETA there was also a property in Thorne Bay that I thought would be a good starting place that someone could build from. Had power, water, septic, and small cabin. It was under 100K, and there was plenty of room to build on. I have no idea if it's still available.

[pittsflyer]

It is unlikely I will loose my job but I do like the idea of passive income. I have survived all the lay offs the last 10 years and strive to be the best I can at what I do. Oil will always be here its just a matter of what extent. I also like the idea of not having to answer to a land lord of any sort, the only way to do that is through ownership of real estate.


I have had too many bad experiences with land lords and lease holders. You have to pander and that is undignified.


Even raw land prices are high right now but I suppose someone could scrape together 100 grand and buy a large lot somewhere.


The details of what they paid for the real estate is literally everything. Outgo on a mortgage or lease is what causes business to fail or succeed. If you can subsidize yourself with some high dollar job then you are not forced to get on your knees for the public in order to stay afloat.

I am setting myself up to buy real estate as soon as the market tanks, then I have options in the future when everyone wants a first born child for a months worth of rent in anchorage.

Originally Posted by Metlakatla

A lot of them bought raw land, had it developed and built their businesses one piece at a time. I'm not really familiar with the details of their original loans, but I will say that none of the people I thought of when writing those examples has failed. They've all prospered, actually. But again, I'm not really advocating that you go this route after you lose your oil and gas job.

[Metlakatla]

Originally Posted by pittsflyer

The details of what they paid for the real estate is literally everything. Outgo on a mortgage or lease is what causes business to fail or succeed. If you can subsidize yourself with some high dollar job then you are not forced to get on your knees for the public in order to stay afloat.

Most of them did exactly that. They subsidized themselves by working at whatever jobs they had until their businesses took off. I don't think any of these people went into significant debt, and I know that at least a couple of them didn't purchase the original property with the idea of going into business. They saw a need and filled it. It seemed to work out really well for teachers because they had summers off, and that's when the sportsfishing tourism happens. I also know that a lot of them got really good deals on raw land, so I'm guessing that none of them were heavily leveraged.

The people I've seen fail seem to be the ones who buy turnkey businesses and then aren't smart enough to manage them.

I have had too many bad experiences with land lords and lease holders.

This comes as no surprise.

[pittsflyer]

Being a renter is being a position of weakness, as soon as disagreements come the last place you want to be is in a position of weakness. We are coming into a time where there should be some really good deals on raw land and equipment. The last 20 years there has been very little opportunity because the demand has been so high but I am looking forward to the market softening significantly.


I am curious how these teachers were able to clear land, pour foundations, and construct buildings. Even if you have the land the cost to develop is staggering, even if you do it yourself you have to front money for equipment on a teachers salary?

Originally Posted by Metlakatla

Most of them did exactly that. They subsidized themselves by working at whatever jobs they had until their businesses took off. I don't think any of these people went into significant debt, and I know that at least a couple of them didn't purchase the original property with the idea of going into business. They saw a need and filled it. It seemed to work out really well for teachers because they had summers off, and that's when the sportsfishing tourism happens. I also know that a lot of them got really good deals on raw land, so I'm guessing that none of them were heavily leveraged.

The people I've seen fail seem to be the ones who buy turnkey businesses and then aren't smart enough to manage them.



This comes as no surprise.

[Metlakatla]

Originally Posted by pittsflyer

Being a renter is being a position of weakness, as soon as disagreements come the last place you want to be is in a position of weakness. We are coming into a time where there should be some really good deals on raw land and equipment. The last 20 years there has been very little opportunity because the demand has been so high but I am looking forward to the market softening significantly.

Have you ever tried to evict a renter from an Alaskan property? It's an amazing experience. Stick with high-priced vacation rentals -- better class of people, usually, and no hassles about getting them out when they decide the rent can wait.

Should be some good deals coming up, but I wouldn't expect to find them on the panhandle, although Juneau may clear out some. Our economy is more tied in with Seattle than it is with the rest of the state.