October 2017 – Knowledge Banking

October 12, 2017November 2, 2017

Authentic Boomtowns

An authentic boomtown also thrives largely on its local business base, not primarily on commuters.

Mammoth Lake’s Paul Oster said the town and mountain business community solved many of the issues plaguing most ultra affluent resorts.

An excerpt from Book Five in “The Knowledge Path Series” dedicated to helping you find the place of your dreams in the Sierra Mountain resorts.

Part Four in a 4-Part Series.

Part One: You

Part Two: Taking Calculated Risks

Part Three: Plug In Dreams

Mammoth Lakes appeals to a healthy mix of residents.

The affluent lifestyles are drawn to its quality of life.
And, the “immigration nation community” and service workers like lift operators, ski and snowboard instructors, restaurant servers and bartenders.

Mammoth Lake’s Paul Oster said the town and mountain business community solved many of the issues plaguing most ultra affluent resorts.

As the lessons of the Great Recession made clear and evolution of Mammoth’s lifestyles and real estate market illustrate, Dent cautions.

Although smaller boomtowns will exhibit a clear tendency to attract the kinds of businesses that support a specific lifestyle, you want to look for business diversity.

Is there a hidden, festering problem that will potentially trigger an economic disaster?

If the area is sustained by one key business, say tourism, and the weather patterns change, as in the cases of Mammoth Lakes and Lake Tahoe, the local economy – your business – and the value of your property will take financial hits.

Isolated small towns, like Silverton, Colorado struggled during its transition from a gold mining town to a tourist town.

And the legacy toxic tailings from the area’s gold mining operations and a cyclical history of “blow outs” are gifts that just keep on giving.

But, not in good way.

Just ask Durango, Colorado residents.

And Animas River businesses like “Wet and Wild” devastated by the giant orange sludge flowing through town at the peak of the summer tourist season in 2015.

Yellow Sludge Filled the Animas River Starting in Silverton

How can you prevent those kinds of losses?

Choose wisely.

If there are different kinds of businesses in the area, the decline of one is likely to have a more limited effect on property values.
Consider both the short- and the long-term value of your real estate investment when evaluating the local businesses.

You don’t want to keep potentially attractive boomtowns on your bucket list, if like in Santa Barbara, California traffic clogs the main artery.

An authentic boomtown also thrives largely on its local business base, not primarily on commuters.

This gives the town stability in growth.

It represents the lifestyle it is catering to.

Not simply making it available to people who earn their incomes elsewhere.

It also indicates that this boomtown supports the ideal of a quality lifestyle that offers enough leisure time to enjoy your family, your friends and your new community.

Ask around.

Find out where they live and work.

Observe.

Look at the traffic patterns during rush hour to determine if most people are commuting to a nearby city or suburban area.
If they are, think twice about investing in this boomtown!

Steps:

(8) Sit down with your spouse, partner or friends and write-up your bucket list of places.

(21) Spend the time to find the best places to live and invest. It will be worth your while. The great thing about living where others spend their vacation is the year round quality-of-life.

October 5, 2017

Plug In Dreams

What if you knew those Wireless Resort profiles that attracted you?

For example, cappuccino shops and hip cafes give a different signal than a Wal-Mart or McDonalds.

An excerpt from Book Five in “The Knowledge Path Series” dedicated to helping you find the place of your dreams in the Sierra Mountain resorts.

Part Three in a 4-Part Series.

Part One: You

Part Two: Taking Calculated Risks

What if you used Nielsen’s MyBestSegments and plugged in any of the Wireless Resorter lifestyle profiles, could you find you dream neighborhoods?

You couldn’t except by trial and error.

Searching Claritas One Zip Code at a Time

Find the zip code for the town on your short list.
Plug it into Nielsen’s MyBestSegments online database and find out if it was.
Or in the majority of cases – not.

What if you knew those Wireless Resort profiles that attracted you.

Or those higher status and income profiles?
Or those age and life stage profiles?
You couldn’t simply plug them in and find the town or your dreams.

But, being a “What If” guy I reverse engineered the process.

And lived to write a book about it.

Following Harry Dent’s logic – the more affluent people always seek the best areas and the number of these areas is limited.

Therefore, such areas will see the most money chasing the fewest properties.

In the simple math of supply and demand, that adds up to the best real estate appreciation and, for some people, to the highest quality of life.

Luckily, he included a list of Western resort towns that fit his criteria to begin with.

Each one included a mix of lifestyles.
I painstakingly plugged zip codes of potential towns on my bucket list and compared them to Dent’s originals.
Over time patterns emerged.

And with enough patience a workable knowledge bank provided what I wanted.

An easy way to search on 09M1T1 and identify a subset of all the Western towns and a way to group them into geographical travel itineraries for vacations.

Get out and smell the wildflowers.
Become entranced with waterfalls
Feel the cool breeze blowing through the golden aspen leaves.
And take note about the bucket list town’s amenities.
Whether or not it’s making substantial investments in its public facilities.

More specifically Dent offers a short list

Is it expanding the airport, improving public transportation, and building sports complexes, schools, cultural facilities, convention and meeting centers?

What kinds of tourist attractions and family entertainment facilities is the city building or improving, and what do you think of them?

How about the community’s attitude towards an influx of new people?

If it is creating an environment to attract more, this is another sure sign that the town is expanding and planning for more expansion.

Remember the online feud over chickens as pets in Bishop?

“It is obvious that you are a young, smart-a– who probably moved from LA to Mammoth, couldn’t afford to live there and ended up here.”

“I was born here. You’re obviously a hypocrite.”

“Go back to Metropolis, where superman protects you from all the big, scary and stinky farm animals.

Bishop will be ok without one more flatlander type.”

A quick rule of thumb isn’t one universally appreciated by the locals, either.

Franchises are moving in.
Franchises such as Starbuck’s Coffee, McDonalds and Wal-Mart.

These companies do extensive demographic and lifestyle analysis before moving to an area and they don’t make such an investment unless they are convinced that there is strong growth potential.

An important side note.

You’ll recall as a ‘Preneur, after weighing the pros and cons of buying a business or a franchise, investing in a franchise may also provide you with a proven business system and an established local customer base.

Growth by itself, however, is not the only factor to evaluate for keeping your bucket list town on the shortlist, and later when you set up shop.

Dent says to …

Consider what types of businesses are moving in, what kinds are already present, and determine whether or not they reflect and support the kind of lifestyle you’re seeking.

Maybe just as important, you’ll get a feel for what types of people you can expect to move into the area in the near and longterm future.

For example, cappuccino shops and hip cafes give a different signal than a Wal-Mart or McDonalds.

The high-end businesses suggest you may be walking down Main Street of the next Aspen, whereas a Wal-Mart probably indicates another low-cost business town or an exurb that eventually will look more like an extended suburb.

In reality, you’ll find both in your bucket list town.

Steps:

(8) Sit down with your spouse, partner or friends and write-up your bucket list of places.

(21) Spend the time to find the best places to live and invest. It will be worth your while. The great thing about living where others spend their vacation is the year round quality-of-life.

October 1, 2017October 1, 2017

Taking Calculated Risks

As a real estate investor you’re looking for the equivalent of a stock market mantra, “Buy low, sell high.”

Well off empty nest 45 – 65-year-old couples and successful midlife 30 – 44-year-old couples signal the transition to higher appreciation in real estate.

An excerpt from Book Five in “The Knowledge Path Series” dedicated to helping you find the place of your dreams in the Sierra Mountain resorts.

Part Two in a 4-Part Series.

Part One: You

Look for a real estate market just taking off or, as in the Lake Tahoe market, accelerating again after a consolidation or drop in prices.

Contact local brokers for property price statistics and discuss vacancy rates for the town

Falling vacancy rates indicate demand is outstripping supply.
And that translates into enduring price appreciation.
Another quantitative variable to check is any factor that would limit the amount of land available for development.

Harry Dent advises you to look for any clues

These would include environmental constraints, water shortages, adjacent hills and lakes that count towards the acreage totals but cannot be developed, zoning laws, and so on.

As a real estate investor you’re looking for the equivalent of a stock market mantra, “Buy low, sell high.”
Or in retail, “Location, location, location”
A limited supply of suitable land plus growth equals appreciation.
Explosive Las Vegas Growth

Dent turns to Nevada, Florida and Colorado for examples.

In Las Vegas at the time of his report had been growing by 14% every year, exactly the kind of statistic you’d want to find.
But with so much cheap land surrounding the gambling and entertainment mecca housing supply easily kept ahead of demand.

This is why, for example, Las Vegas is growing at an astonishing rate of 14% per year but homeowners are enjoying only modest appreciation.

Here’s the contrarian position.

When “timing is everything.”
There is a physical limit after all.

Mountain Range Halting Limitless Expansion

But Las Vegas is approaching the limits set by the surrounding mountain ranges. As a result, it may see more substantial price appreciation in the future.

What about Florida, an irresistible magnet for snowbirds and retirees?

High population growth rates?

Check.

But, Dent says to consider two anti-appreciation factors.

Lots of flat land suitable for development and plenty of water have kept the price appreciation in most areas relatively modest.

Look for pro-appreciation factors at work.

Limitations which limit growth (supply) while the attraction (demand) drives population growth.

California’s priciest areas limit growth by geographical, think Pacific Ocean, and ecological limitations.
Finally, at the top of our bucket list, Telluride, Colorado, is surrounded by mountain walls.
Canyon Surrounding Telluride

The appreciation in such areas due to a growing population has been phenomenal.

The idea for this book germinated from a simple question my son asked on the porch of Tom’s Place.

He pointed to the houses, cabins and vacation homes perched on the winding terrace lots.

“How to live in one of those while doing what I want to do.”

My quest to build my knowledge bank came from Dent’s insight.

The final piece of quantitative data that can give us insight into a potential boomtown tells us about the local lifestyles, known as psychographics.

Without having to visit each and every boomtown you can first filter a long “Birds-of-a-Feather” bucket list down to a more manageable regional itinerary.

Then visits to your short list you can confirm what lifestyle profiles suggest.
Take extended vacations in both the summer and winter test the fit, get a “feel” for the place and check out what’s going on.
You can correlate numerous measurable demographic factors with specific lifestyle preferences as we’ve shown beginning in Whitefish, Montana and ending with Mammoth Lakes, California.

A lifestyle analysis of any city, town, zip code, or neighborhood …

can help you identify a new town that is attracting people like you whom you’d enjoy as neighbors.

It is also important to use such data to identify which towns are attracting the trend setting lifestyles of the more affluent sectors of the population.

The towns with Wireless Resorter profiles attract trend setting lifestyles.

Over time Mammoth Lakes shifted from a Maturing Resort lifestyle magnet – informal, bluejeans unpretentious – to a growing Premier Resort attraction over the years we tracked them.
The appearance of both the 09M1T1 and 25Y1T1 profiles — well off empty nest 45 – 65-year-old couples and successful midlife 30 – 44-year-old couples signal the transition to higher appreciation in real estate.

Dent originally wrote …

If a Claritas (now Nielsen PRIZM Segmentation) report on the town you are researching shows a significant or growing influx of any of these lifestyle segments, then it confirms that you have selected a boomtown.

But if it didn’t, how could you find Wireless Resort profiles?

Steps:

22) Selectively evaluate the best quality-of-life communities to live in and weigh the tradeoffs of risk and rewards for accruing real estate appreciation along a progression of rural and small towns that meet what your pocket books can afford.

An authentic boomtown also thrives largely on its local business base, not primarily on commuters.

Mammoth Lake’s Paul Oster said the town and mountain business community solved many of the issues plaguing most ultra affluent resorts.

Share this:

What if you knew those Wireless Resort profiles that attracted you?

For example, cappuccino shops and hip cafes give a different signal than a Wal-Mart or McDonalds.

Share this:

As a real estate investor you’re looking for the equivalent of a stock market mantra, “Buy low, sell high.”

Well off empty nest 45 – 65-year-old couples and successful midlife 30 – 44-year-old couples signal the transition to higher appreciation in real estate.

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