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Newsletter from Montana - Minnesota
February 2008
My agent Bob Anderson listed a townhouse in the Red Lodge Country Club with only one common wall to the neighbor next door. Here you are just minutes from the golf course and less than a mile from downtown Red Lodge. The home is a split-level. As you come in, either from the double garage or step through the front door, you arrive at the living room with a fireplace. A few steps up and you are in the dining/kitchen area with a deck out back and overlooking the living room. It is a country kitchen with custom oak cabinets, a pantry and an island. From the dining area, a hallway leads to a guest bedroom, bath and the master bedroom with its own bath. As you come in you can also just walk a few steps downstairs where you arrive at the big family room and the hallway to the left leads to two more bedrooms, a bathroom and the laundry room. It is a real clever floor plan. There is a yard out back and a front lawn to mow. The home was built in 1996; the roof was replaced in 2005.
The automotive shop in Billings is ready to make a deal. Their net for the last three years shows $ 450,000, so it is a steal at $ 785,000 - but if you don't want the racing equipment, that would lower the price to $ 685,000 - if you do not want the tow truck business that would lower the price by $ 175,000 - If you do not want to run the automotive shop yourself, there is a mechanic in the ranks who could be made manager for $ 65,000 a year. So, if you are interested in the automotive business, step up and let's talk!
Since many of you enjoy upland bird hunting, you might be interested to know that I called 52 bird-hunting preserves around Minnesota and I did find some that might be for sale. Prices range from $ 450,000 for 300+ acres with home, shed and clay machines but no business yet (all the licenses are in place, but the course is not set up yet), to $ 800,000 and $ 930,000 for a full business with lodges, but no home and not enough to make a payment on such a place. Then we have the $ 1.5 to 2 mio price range for full fledged businesses with homes and lodges up to $ 6 million and even $ 12 million. It sure was an interesting round of phone calls. Let me know if you have an interest in running or owning a bird hunting preserve, I have some information I am happy to share. In Montana I found one outfitter near the Canadian border who would to sell his 150 acres adjacent to a 60,000 acres ranch for $ 1,100,000 - he is a guide for bear, deer, antelope and elk and seems to have a decent income, but he also runs 200 cows; 50 on his own place and the rest on the ranch next door.
Until now, the issue of whether a vacation home qualifies for tax deferral treatment under IRC §1031 was the subject of much scrutiny and uncertainty. To the delight of many tax practitioners, on February 15, 2008, the IRS eliminated that uncertainty by issuing Revenue Procedure 2008-16, effective March 10, 2008, which provides a safe harbor for exchanges of vacation homes. Now taxpayers can have a clear understanding of the circumstances under which the IRS will not challenge whether a vacation home will qualify as property "held for investment" under §1031: The home is owned by the taxpayer for at least 24 months, which has been or will be rented out for 14 days or more each year and the owner and owner's family did not/will not occupy it for more than 10% of the time of which the unit was/will be rented at fair market value. There you have it!
Now since you can exchange your vacation rental, how about exchanging into the home I have listed in Red Lodge?
It comes furnished, turnkey and according to the vacation rental management company it will net $ 30,000 to the owner during the first year.
Also the
home in Livingston would make a great vacation rental. This home could sleep twice as many people and would make twice as much money. Also turnkey!
This would also make a great corporate retreat, and could be used for re-unions and weddings with that view of the Crazies, the Yellowstone River and overlooking the lights of Livingston at night, it is so romantic up there. Just a (skilled) stone throw from Chico Hot-Springs and not far from the entrance of the Yellowstone Park.
Red Lodge received another favorable write-up, this time at Ski-Net (Last time it was the New York Times). Red Lodge was named under the "10 Next Best Places - The next best places to ski, live, invest, retire. They're uncrowded. They're affordable. They're ready to go big. These quiet mountain towns are skidom's rising stars. Red Lodge, Montana: Deep-pocketed developers recently purchased Red Lodge Mountain (70 runs, 1,600 acres, 2,400-foot vertical), which means change is in the alpine air at Red Lodge, Mont., (pop. 2,300), near the northeast entrance to Yellowstone National Park. Ski-area improvements are certainly warranted, but let's hope the downtown core (a National Historic District) retains its cowboy charm. 'feels like Park City in the 1970s.' says one local resident"
When I told you about the
spectacular acreage in Nye in one of my last newsletters, and said the five acres across the way sold for $ 200,000, I got a phone call correcting me. The five acres across the way actually sold for $ 300,000 and here I am trying to sell 45.5 acres for $ 348,000 with river access! You actually have a better view from the 45 acres than down below from the 5 acres parcels, because you are sitting a tad higher and thus have a spectacular view of the Stillwater River and the Mountains behind it.
Just over the hill from this property, is this home on 20 acres on little Rocky Creek. The house is going into foreclosure. $ 750,000 would pay the mortgage and closing fees for the seller. It will be on the auction block in April. Let me know if you have an interest.
Let's switch back to Minnesota for a minute. I found a deal south of Fergus Falls (which is a great little city with beautiful old homes, a charming downtown and big box stores in the outskirts.... and not far from Fargo). It is a completely remodeled and restored farmhouse with six bedrooms - only one bath, but the sixth bedroom upstairs is exactly above the bath downstairs and could easily be made into a bathroom. It sits on 12 acres with barns, pole sheds and grain bins for a measly $ 97,000! What an undiscovered area, and so beautiful among the rich farmland between the prairie and Lakes Country. The little farmstead is protected from the wind by its own thick tree stand. As cute as a button! If you like I can email you photos of it, let me know!
Another bargain is the land parcel James Hannon has listed. The owner just reduced the price
80 acres for $ 48,000 and 40 acres for $ 24,000 Both land parcels are farther up north in Minnesota near Karlstadt, where the big trees are and where you can catch a glimpse of the Northern Lights.
Are you looking for a business out in the country? Mike Olson listed the
Hawley Farm Supply & Mill. The owner pays himself a $ 45,000 salary plus $ 15,000 in commissions every year. This excellent commercial location along Highway 10 (connecting Fargo to Detroit Lakes) is the perfect spot to run your own farm and feed company or start something else! The property is set in the growing community of Hawley, MN (pop. approximately 2,000). Farming is a major part of the community and the surrounding area. The current owners serve clients within a 50-mile radius and provide a much needed service. $ 212,000 buys the business AND the real estate. If the business is purchased, the inventory will be sold at cost!
If you are looking for a reliable, creative mortgage broker who is responsive and works as fast as lightning, I found one: Steve McCall - Mortgage Consultant, 6040 Earle Brown Dr #200, Brooklyn Center, MN 55430
steve.mccall@firstnationalmn.com Office (763)231-3101 or toll free 866/982 7625 xt124, Fax (763)231-3102, Cell (763)242-8890 Steve does loans nationwide and he still does stated income loans whereby 90% of the lenders cannot do those anymore. He works circles around local banks and other lenders, you will be amazed. After he saved a deal for me he wrote: "Please do not hesitate to contact me anytime, day or night. I realize we do not have the traditional 9-5 job and I am available on my cell phone if and when you need. I keep normal office hours of 9-6 Monday and Wednesday. Tuesday and Thursday I am in 9-7 and Friday 9-4. I am available weekends too if needed." Steve is a mortgage broker as opposed to a mortgage lender. Because mortgage brokers deal with multiple lenders -- in a typical case, 25 to 30, sometimes more -- they can shop for the best terms available on any given day. They can also find lenders who specialize in various market niches to which lenders might not have any access. Mortgage brokers do not add any net cost to the lending process, because they perform functions that would otherwise have to be done by employees of the lender.
Last but not least if you are looking for a great gift, Lisa James does pencil portraits of homes, kids or pets from photographs. Send her an email to find out about the pricing, I thought it was quite reasonable! or call her at (901) 791-2498 or 901/624-8502 Lisa lives in Memphis and draws for folks all over the country via email and digital photo. She can also draw from architectural renderings if you provide her with building material details.
I wish you a fabulous March and everything should be green by the 17th!
:-)
Best Regards,
Dorothea Lowe, Broker
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