Ranch Investor Podcast

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Episode 10 | Inside the Intricacies of Stigmatized Properties: A Ranch-Value Revelation


Every property holds a unique story, capable of significantly enhancing its intrinsic value. However, these narratives can also present challenges, influencing a property’s market performance. From properties burdened with stigmatization to those spanning a wide spectrum of histories, some listings may linger on the market for an extended period, while others sell swiftly due to modern influences and strategic PR tactics.

In this insightful episode, Colter and Andy share their expertise, offering practical insights on harnessing property histories to your advantage, regardless of whether they fall on the stigmatized end or somewhere along the diverse spectrum of property narratives. They also delve into strategies for accurately assessing a property’s true value, one that aligns seamlessly with your goals and ideals in the world of real estate.

Colter DeVries: 0:01
I’m Colter DeVries, owner of Ranch Investor Advisory and Brokerage Services. As a former commercial nag banker, my main reason for doing this podcast is to simply gauge the market’s appetite for crowdsourcing investment in a Ranch real estate fund.

Ranch Investor General: 0:15
The Ranch Investor podcast, curated by subject matter experts to give you immense benefit, because we believe your time is valuable.

Colter DeVries: 0:26
Andy Ron hey Colter how are we doing?

Andy Rahn: 0:29
Welcome back.

Colter DeVries: 0:30
Thank you To the video that you used to formerly co-host.

Andy Rahn: 0:34
That’s right, I haven’t been on as many lately. You’ve been busy.

Colter DeVries: 0:38
Yeah, it’s been a busy summer Growing your tech venture. You’re a tech bro out of Billings, no longer Brosman Montana.

Andy Rahn: 0:46
Right Yep, trying to expand, trying to bring on some new tech partners.

Colter DeVries: 0:53
I want to talk about stigmatized properties today because I see in the news that the Zorro Ranch Jeffrey Epstein’s New Mexico Ranch just sold and it made me think about those crazy people in South Carolina, the Murdox. Do you remember that story about Alec Murdoch? Murdo murdered his son and, I think, his wife yeah, murdered his wife and his son and then faked his own attempted murder. There’s a Netflix documentary on it, so there’s a huge backstory. But the thing is is they had a bomb cool place in South Carolina and that recently resold because he was in such financial troubles.

Andy Rahn: 1:51
I mean, that’s usually the MO for murdering your wife or a 20 year old girlfriend, right, right, and he did not have, he comes hand in hand.

Colter DeVries: 2:03
He didn’t look like he had the 20 year old girlfriend. So he did have the liabilities and the fraud going on. But that resold. Don’t know what the price was, how that compares to quote unquote market. Same with Epstein’s Zorro Ranch that has sold Don’t know where. That can not disclose price but don’t know how it compares with the quote unquote market down there in New Mexico.

Andy Rahn: 2:30
And I’m curious, what have you seen for stigmatized so when you messaged me about this topic today, I thought you just meant properties that were stigmatized because they were on the market too long, which happens in Montana I didn’t realize we were getting into murder and fraud.

Colter DeVries: 2:45
Well, there’s probably degrees of stigmatization.

Andy Rahn: 2:48
Well, isn’t the classic example like in housing, right? Somebody dies in a house, or you’re right, or somebody’s killed, or there’s a suicide in a house, right? Doesn’t that broker have a? Now have a stigmatized property to try to market? What?

Colter DeVries: 3:01
do you? Just don’t tell anyone about it.

Andy Rahn: 3:03
Disclosure is you don’t have to disclose that, isn’t that? No, that’s not minimum disclosure.

Colter DeVries: 3:08
No, not in Montana, Really. No, you don’t have to tell anyone that someone died. That’s not adverse material information. Now, if they ask, obviously you can’t be deceitful. And I’ve been on a showing where it was just eerie, it was dark and smelled not like death but just smelled like an old house that hadn’t been taken care of and were walking around and I’m not a superstitious person, I’m not even a little stitious, so I don’t do the energies and the spirits and all that. But it gave me the chills and it gave my buyers the chills and I asked the agent. I go hey, man, has someone died in here? And he goes God, why’d you have to ask? Now I have to tell you yeah, someone died in here. Wow.

Andy Rahn: 4:00
Wow, see, there’s something to it. Yeah, the neighborhood I used to live in in Bozeman, there was a tragedy cop actually murdered his wife in front of his kids and himself murdered his wife and killed himself. A cop in Bozeman, like gosh, is this getting on? 10 years ago? So that was in my neighborhood, just down the street, and I that house sold, you know, a year or two later, and I, you know, when it was on the market, seemed like it was on the market for a while too. You know that was Bozeman’s almost always hot, you know, except for a few blips here and there. But you know you made you wonder about this high profile, right? I mean, there’s no way of not knowing that, or?

Colter DeVries: 4:38
Well, and I almost. The penultimate stigmatized properties would be Jeffrey Dahmer’s apartment, and that whole apartment complex was raised. I believe I’m pretty sure that they put a park there.

Andy Rahn: 4:53
Well, there’s enough craziness world. You got to imagine there might be a premium in a small you, just in a small sector. You just got to find that that buyer segment, they would put a premium.

Colter DeVries: 5:04
Well, yeah, there’s those weird murder museums, yeah.

Ranch Investor General: 5:07

Colter DeVries: 5:08
Serial killer museum. But then Epstein’s Island. I mean, we all kind of want to own an island, right, right. What’s it worth to you if you knew that Bill Clinton and the global elites had spent some time there With some underage? Yeah, traffic.

Andy Rahn: 5:26
Yeah, traffic. I took one of my appraisal training classes years ago and it was very interesting because it was most of my training is all land appraisal but this class had machinery appraisals, jewelry appraisers, art appraisers, so you know broader spectrum. And there was an interesting art appraiser there from Chicago and he was talking about Andy Warhol prints and apparently an intern at some point had tried to shoot him. He was, he was messing around with his interns, sleeping with his interns and one of them got jaded and tried to shoot him and this bullet went through a couple prints. He had some print racks and those pieces of art are worth exponentially more because of the cultural historical story behind it yeah. And it’s just. I mean, you look at it from nuts and bolts or you know whatever, there’s nothing inherent. You know the art itself would not garner that price, but the bullet holes.

Colter DeVries: 6:21
So what could be a stigma? So I’ve got this Warhol that is symbolic of sexual deviancy and having an affair or something. I mean that could be what it’s art, it’s up for interpretation. So that story could work in your favor, that it’s unique, it’s ultra unique, highly unique, or it’s like. I don’t like that so much. That’s kind of a negative story. I don’t want that. I don’t want to enshrine that story in my house.

Andy Rahn: 6:54
Yeah, and I’m trying to think yes, you’re asked the original question was stigmatized in properties and I don’t feel like we’ve seen a lot of that in Montana. I mean there are certain things like I mean we’ve had cults and we’ve had different things like that. You know that own property right, yeah, that then hits the market. I don’t know that. I can’t really think of an example of like some anything like approaching Epstein or Dohmer or you know anything like that. But I guess and I didn’t, like I said, I didn’t realize we were going to murder and sexual debency but more typical in the market are things like you know I thought you were angling at, you know, overpriced properties that languish on the market for years and years or overbuilt properties or things like that. A little more tame in the stigmatization.

Colter DeVries: 7:41
How can you say so? Can you put a value on stigma?

Andy Rahn: 7:46
Well, I’ve wanted to try to come up with a standard for what you could characterize as overpriced and, of course, part of that, part of the difficulties there. You don’t know it’s overpriced till the time passes. But you know, if something’s on the market for three years at a price, it’s pretty good evidence that it’s overpriced. You know, because that’s longer than the typical marketing period, exposure period in the market, and we see that a lot. I mean, there are properties on the market that have been on the market for 10 years. Well, the IAX Ranch just sold. Yep, the IAX Ranch just sold. That’s one of the more infamous.

Colter DeVries: 8:19
That was the longest listing in US history Almost, yeah, about 10 years and I mean that thing just proved right. Leave it on the market long enough and inflation in the market will catch up to the price you want.

Andy Rahn: 8:38
Yeah, yeah, I mean, that does seem to be a strategy. But yeah, I mean, like a lot of things it’s hard to prove or hard to come up with, you know, statistically verifiable, like evidence in the market. But of course a lot of it’s anecdotal. But you know, the classic scenario is overpricing a property, and I think it’s especially bad in a hot market, because in a hot market everybody expects things to move. If the property’s priced right, if the value is there, if it’s worth trading, it’s going to trade. But now here’s a property Everything else is traded in a short amount of time. There’s a property that’s outside the typical time zone and I do think buyers smell that and say, okay, wait a minute, what’s wrong?

Colter DeVries: 9:25
Well, they do, but it sounds to me like you are talking about a stagnating listing rather than a stigmatized. Stagnation To me is yeah, you got this one out there. It’s got a high price, Everyone knows it.

Andy Rahn: 9:39
But isn’t that the result? Doesn’t it then become stigmatized in the market? The buyers Sure?

Colter DeVries: 9:44
Yeah, the buyers would say we like to. We tend to believe that if the price is shit and they’re not moving on it, that either the seller is shit or the ranch is shit. There’s a reason that it’s not moving and it’s at that price, and it’s either a shitty seller or a shitty ranch.

Andy Rahn: 10:02
So then I think they’re motivated. Then there’s an inherent motivation to offer lower than they may be otherwise would. Here’s a property. It’s been on the market too long. Clearly that market price isn’t being verified, validated by the market, so I’m going to come in lower. So is that a strategy that harms the buyer or, sorry, the seller? Or if the seller went higher than they should have, or hired the market in the first place, does that work out well for them? I guess it depends on the details.

Colter DeVries: 10:31
Yeah, there’s research. I believe there’s university research about the cost, the real economic cost, of overpricing.

Andy Rahn: 10:40
a listing yes, Well, time value of money that seems to be one that gets lost on a lot of sellers.

Colter DeVries: 10:47
Certainly they have especially ranches. We’ve been on it their whole life. There is no time value money, just like there’s no opportunity cost.

Andy Rahn: 10:58
Certain economic principles just don’t apply. Yeah Well, we’ve talked about this on the podcast before sellers and expectations and yeah, no accounting for time value of money, and just you know that’s such a large asset, such a once in a lifetime asset kind of deal. They just tend to throw rules and economic principles out the window and treat it like a different category than any other economic entity.

Colter DeVries: 11:38
Well, as my father would say when I took on his listing, much to my chagrin, and we were significantly overpriced by my professional opinion, which your children and in particular your son’s professional opinion means shit to you.

Andy Rahn: 12:00
Yeah, I think Dave Ramsey calls that the powdered butt syndrome, that’s right.

Colter DeVries: 12:05
He powdered your butt back in the day, that’s right.

Andy Rahn: 12:07
You don’t have much to contribute.

Colter DeVries: 12:13
He’s like well, you only get to sell at once. Yeah, and that’s absolutely the kind of the baseline mentality is you only get one shot at creating all that wealth and capital right, or creating realization of that capital.

Andy Rahn: 12:29
Yeah, so that’s what comes to my mind. If you’re going to talk about the broad Montana market and stigmatization of properties, that’s what comes to my mind is overpricing and being on the market longer than would be expected and not creating some stigma. I mean, we’ve talked about over-improvement. I don’t know if that’s quite qualifies as a stigmatization, but I guess if you’re going to define stigmatization broadly as negative impacts on a property and its time on market and whatnot.

Colter DeVries: 13:02
Well, it sounds to me like it’s a spectrum. Stigma is a spectrum, and probably the most benign would be overpricing it, and then, as you move further into material influence or material effect, I should say it would be overbuilt. That’s not quite as bad as Jeffrey Epstein having the Prince of England out there.

Andy Rahn: 13:35
The former US president and the Prince of England.

Colter DeVries: 13:38
Yeah, Prince, something I don’t care about the monarch and royalty we kind of got rid of that too.

Ranch Investor General: 13:46
But I know there’s one he has a name.

Colter DeVries: 13:50
He’s been removed from the family, I hear. But really.

Andy Rahn: 13:54
I didn’t know that Prince Andrew isn’t it.

Colter DeVries: 13:56
Prince Andrew, yes. So anyways, we got overpricing. Not that bad. Then overbuilt, was that the next one? Over-improved, over-improved. And then, if you move into Dahmer’s apartment or Epstein’s Island or Epstein’s Ranch why we’re talking about this is.

Ranch Investor General: 14:21
Zorro Ranch.

Colter DeVries: 14:24
Those seem like more severe discounts because you’re limiting your market. Each way through this spectrum, your market becomes smaller and smaller, so there’s only so many people who are willing to buy your ranch with 12 bedrooms.

Andy Rahn: 14:40
And we need to start with the premise that it’s a pretty small market to begin with. I think sometimes people underestimate that. So it’s a small market to begin with and I’m trying to think. I can’t think of a property that I’ve ever heard of or remember hearing about in Montana that like an Epstein property or whatnot, that was stigmatized. And again there’s been some like the cold stuff like Church Universal Trembant had lands, some of which they’ve sold, and stuff like that. And I think any of this. Who knows, even with the Epstein? I mean, do you think there really is a stigma or do you think someone could come along and just say, well, that was a funky history. But I can rewrite the history on this place and I do?

Colter DeVries: 15:28
I do think that you can rebrand a place.

Andy Rahn: 15:31
I mean, I don’t know that it would put me off. I mean, if I was shopping for an island and could afford it, you know, in some ways actually, I might embrace, like well, I’m going to do something better spin.

Colter DeVries: 15:43
Yeah, it’s a spin. You would need a PR person to spin the story in your favor and say I’m going to come into the Zorro Ranch and we’re going to, we’re going to bring veterans out here and we’re going to have this feel good mission.

Andy Rahn: 15:58
As I was going to say, if you’re planning on picking up girls in town and bringing them to your ranch, that might not be the place you might have to you wouldn’t want to have a recovery ranch for teenage troubled girls.

Ranch Investor General: 16:10
No right.

Colter DeVries: 16:11
No, I don’t think that’s going to work. What do you think? Montana has a few of those for troubled teens ranchers, yeah, although that’s been on.

Andy Rahn: 16:19
That’s well. There’s a. There’s another angle on stigmatization. That whole thing has been called into question. There was legislation in the last session on that for abuse, some abuses, some lawsuits and accusation of unregulated they were highly unregulated in Montana and some criticism of that.

Colter DeVries: 16:39
Well, going back to you can rebrand a place, but I don’t. It depends on use, what you’re going to use it for. Because if you were to buy Epstein’s Island and put your best foot forward on a PR campaign and spin it, put it in the old Washington DC spin cycle that, oh, we’re going to completely twist the words in the meaning of what’s actually happened here. We’re going to completely manipulate this messaging to make us look virtuous, to make us look altruistic. You could do that. But if you’re going to have, well, if you’re going to have a kid summer camp out there, if the use is going to be a children’s summer camp, that probably ain’t going to work. But if it’s your family private retreat for you and a few friends, maybe, even it’s probably not that bad.

Andy Rahn: 17:24
And sometimes there’s a novelty premium like what about Ted Szezynski the unabomber? Like I don’t? I don’t know what happened to his little place, but didn’t this cabin kid sold or donated to museum or something? There was something about that recently because he died, you know, this summer, I think.

Colter DeVries: 17:38
Yeah, he hung himself in prison, did he? Pretty sure we need a fact checker here.

Andy Rahn: 17:46
I don’t know about that. That’s going a little far. I’m pretty sure I thought he hung himself, I thought he died of cancer, I thought he aged out. But there’s also a novelty thing right, Historic. Well, that’s the bullet hole and the war hole prints. But you know that it can go both ways.

Colter DeVries: 18:05
Yeah, I would pay a premium for the Freemans Ranch in Garfield. County, my people man.

Ranch Investor General: 18:12
Therefore, there’s no locked gates on that one, everyone’s welcome to come experience the beauty of sovereignty and vigilance.

Andy Rahn: 18:21
Yeah, yeah, but I just I haven’t seen that be much of a factor in the Montana land market. I mean we haven’t had a, you know, some kind of super, super dark. Well, it’s funny though I’m thinking back like I remember when I was a kid there were rumors of like Satan worshipers outside of town in Helena, like there was a property that catered to that or had a group like that or something, and I can remember hearing rumors like that as a kid. I never saw any of that play forward into, you know, land transaction stigmatization. But going back, to a ranch.

Colter DeVries: 18:58
I would suspect that the bottom of the, I mean, and I kind of think that Epstein’s story is just so horrific I’m not sure you could spin cycle that away, I don’t think you could PR campaign that out, that that terrible history, so, but there is a baseline value to me and I would say that’s grazing. So if it’s going to sell for, say, the cattleman who does not care he’d be like, well, every other ranch in this area is priced at 14,000 animal unit. I’ll throw in a bid at 8,000 animal unit.

Andy Rahn: 19:37
Didn’t Dennis Washington buy the Oregon Colt property? Yeah, from the Rajneeshki’s yeah, so there was a property that some shifty stuff went down on and he came and bought it as a ranch right. He just turned it back into a ranch.

Ranch Investor General: 19:52

Colter DeVries: 19:53
Well, now you bring up a point that stigma is subjective, because I think that’s cool. I would love to own a ranch that those crazy Rajneeshki’s tried to start their own nation on. I think that’s a cool story and I would gladly so. That’s the thing is subjectively. I would gladly tell that story like hey, I bought this 65,000 acre ranch from those crazy Rajneeshki’s.

Andy Rahn: 20:20
Right, right, well, I think a lot of people and I’m guessing Dennis Washington yeah, like putting an end to a story that most people, a lot of people, particularly in that neighborhood, I’m guessing. I mean, I saw the Netflix special, the neighbors the neighbors weren’t happy about that whole. That was a disruption to the neighborhood, a disruption to the culture. So it’s like it’s almost like what’s the word I’m looking for? Restorative or something like it’s bringing it back. It had a crazy chapter right In its arc of history and we’re bringing it back, we’re normalizing, we’re normalizing.

Colter DeVries: 20:57
You weren’t on the podcast when Rich Bradbury, who’s a rancher out there in Eastern Oregon, he came on. He was in here, he came out from Oregon and he talked about. He grew up around the Rajnishkees and you know in Eastern Oregon it’s a lot like Eastern Montana, it’s 50 miles to the next town of 80 people and so you know everyone pretty dang good and it, you know the Rajnishkees legitimately conducted biological terrorism and he was there part of that.

Andy Rahn: 21:29
You know, I lived in Paradise Valley 20 years ago. It was kind of at the tail end of the Church Universal Tramphant era, but that, you know, it’s funny, even growing up in Billings I don’t know, I guess this is you’re probably too young for this but like when I was a kid growing up I mean the Church Universal Tramphant, that was big news and we went to Chico a lot, my family went to Chico a lot, so we kind of had this, you know, attachment or whatever to the Paradise Valley. So it was news, you know. And then I moved there. I moved back from school in Northern California back to Montana and was renting from church people in Paradise Valley and it was the last throes of that whole thing and they had their compound. But then they had these subdivisions, which are of course still there, they don’t go away but Glastonbury North, glastonbury South, so these subdivisions full of 10 and 20 acre tracks that were populated by people that were part of the church. But the church fell apart or, you know, greatly. It’s still there but greatly diminished. And you know, some of these properties had, you know, bunkers, bunkers and so bomb shelters and stockpiling of arms and munitions were part of the part of that cult. But I don’t think any of those properties really suffered from stigmatization. I mean, when that, when they started to sell and when that became not a cut project or property and since then, right, people have just been buying and taking that over, I don’t remember any stigmatization. You know, people didn’t seem to be worried about that.

Colter DeVries: 23:09
So you’re telling me that there is a ranch in the Paradise Valley with a bunch of sheep followers congregation that has stockpiled weapons and bunkers, and they are in desperate need of a new cult leader. This sounds too good.

Andy Rahn: 23:32
You’re seeing an opportunity. Yeah, she, well, elizabeth Claire Prophet was the and she’s she has since passed. The church is still there. They, you know, they opened that new hot springs down there. That Yellowstone Hot Springs is owned by, that’s them. Yeah, that’s Church, University of Trump, and so they’re, they’re still there. They’re much, much, much diminished from their, their height and glory. But yeah, you know, they and they, they had some dramas, they. They had some diesel tanks leak, underground diesel tanks leak because they were stockpiling diesel and leaked into the aquifers. And then they tried to, they wanted to drill into some of that. You know so much hydro, hydro activity. I mean, it’s just North Yellowstone Park. So they started to and I feel like they did, I feel like they tapped, they started to tap some geothermal and they, the feds, had to shut them down. I mean they were worried. They were worried about, like, maybe that causing old faithful not to go you know that stuff. So you know they definitely had some dramas. They’re her husband, I want to say. And yeah, when I was a kid, since the mid 80s, he was busted in Seattle buying 50 caliber automatic I think it was machine guns and stuff like that and stockpiling those that back at the compound.

Colter DeVries: 24:47
So oh man yeah, I miss management Sounds like an opportunity for a turnaround guy a new CEO. Aka Colt leader.

Andy Rahn: 24:55
Yeah, yeah, but so anyway, those are a bunch of properties that potentially you would think might be stigmatized, but I just don’t think they were. I just people thought well, because I knew people that bought, you know. Well, you know, for one thing, there’s always been kind of a short. I mean you know there’s not that much housing and small tracks and stuff in that valley. I mean you know it’s been happening over time.

Colter DeVries: 25:21
Like you as the appraiser, if the courts, the government stepped in, assigned the ranch to a special master. He was in charge of marketing it for them not paying their taxes, and he asked you to do an appraisal. Sounds to me like you’re not going to put a discount on it.

Andy Rahn: 25:43
Yeah, I mean it’s interesting You’re reminding me I’m trying where I’ve come into situations where you just have to evaluate is there something unique going on? Is there market influence, market interference, even like right, like, is there something going on in this special case? I mean, sometimes it can just be a matter of volume and I wasn’t an appraiser when I lived out there, but my memory of it is is that the church was in, you know, kind of falling apart and a lot of people were moving out because this church attracted people from all over the world. I think the church, I want to say they started in Europe maybe, and then they were headquartered in California and she moved from California, the coast of California, to Paradise Valley because California was going to fall into the ocean from the San Andreas Fall and Paradise Valley was going to be oceanfront property, I believe.

Colter DeVries: 26:42
Every cult later sells a doom and gloom story. And then they. Every shepherd has to isolate his sheep.

Andy Rahn: 26:50
The irony about that is because then I, you know, I studied geology and geomorphology in school and the Paradise Valley. If you’re worried about geologic scale disaster, you know Yellowstone reactivating and sending lava flows and mud flows down the Paradise Valley is as likely as California falling into the ocean. So she just went from one geologic you know vulnerability spot to another. But my memory at that time was that a lot of these tracks were put on the market because people were pulling up and leaving them, so there might have been a bit of a saturation. So as an appraiser coming in, it’s like well, you know, a whole bunch of lots are hitting the market at a higher rate than has been in the past, blah, blah, blah. So I don’t know that there was any kind of, because I don’t think I don’t know if properties were like turned over in bankrupts or anything like that, because I think they were individually owned. I mean that was kind of counter to the how that in general, the way that cult operated was you gave all your, you gave all your assets.

Colter DeVries: 27:49
Hell, yeah, you do To the church. That’s a good call. You get them in and take everything, yeah, yeah. So I’m not, they can’t leave you.

Andy Rahn: 27:56
I might have it wrong about those tracks, whether they were owned by the church or individual. I feel like they were owned by individuals, even though that doesn’t seem to fit the, but maybe it was overflow. You know, they people that couldn’t live on the main compound for lack of space or whatever. They, you know, had these outside subdivisions. But my memory is they just hit the market and that they were received generally pretty positively. I mean, I knew some people that bought in there, but actually, now that I’m thinking it through a little bit, I think maybe it’s because they were cheap, they were affordable.

Colter DeVries: 28:27
So maybe that. Why were they cheap and affordable? Yeah right.

Andy Rahn: 28:29
So there must, maybe there was some. You know, it’s funny the gal that I know that moved that bought up there. She was my, I was the gardener at Chico Hot Springs 25 years ago or whatever, retrofitted the greenhouse to use the geothermal and stuff, and the gal that was my assistant, her and her and her husband and her family, they bought a tract up there. So and I know a few others too, so maybe I should circle back and but yeah, they were, they were affordable. I mean part of it was they were kind of they were up in the hills, they were, they were sort of hard to physically access, yeah they had rough physical access. They weren’t. I mean, you know stuff down in the valley closer to the river and on nice you know irrigated crop land was more premium.

Colter DeVries: 29:11
You’re giving me an exact, an anecdotal example. I’m curious about a market analysis and how you could actually price the perceived discount or the perceived loss of value into this, if there’s some sort of normalization to negative, negative feelings, generally negative feelings around a certain property.

Andy Rahn: 29:45
Yeah, well, that’s the trick. As an appraiser, I mean you have to find the smoking gun. You know you have to find market evidence, which can be tough to do. But presumably, like in that situation, you know those tracks were lower, you know trading at a lower rate than you know maybe other parts of the valley, and so was that because of the sort of ownership dynamic? Was there some sort of sigmentation? Is it just location and access? You know you got to tease all those things out and a lot of times, you know you don’t have a hard answer. A lot of times it’s like well, it’s kind of a combo of all the above, you know, and you know you don’t have to come up with the perfect name for it, you can just say well, these are discounted properties. I mean, the evidence shows they’re traded at X percent of tracks elsewhere.

Colter DeVries: 30:31
And we’re certainly not seeing a negative stigma. With Yellowstone erupting, People don’t seem to be concerned that the world’s largest volcano that will immediately wipe out Bozeman, you know it’s funny, elizabeth Claire Prophet.

Andy Rahn: 30:49
There was an elevation line that I mean she. You know she was a prophet to her own self self-declared and there was an there was an elevation that her followers were not allowed to live below, and I knew a woman who lived. She was excommunicated from the church because she lived below the required elevation and she was going to be wiped out by ocean water. I think was what Elizabeth Claire Prophet claimed. There’s always some really good bullshit story.

Colter DeVries: 31:17
I mean, are we?

Andy Rahn: 31:18
are we within a thousand miles of the ocean? 800 miles, 700 miles, something like that.

Colter DeVries: 31:22
Whatever we’re closest to, what Seattle?

Andy Rahn: 31:25
Yeah, it’s a lot of seawater to come our way.

Colter DeVries: 31:28
That’s a pretty big tidal wave. Yeah, I don’t know, I don’t know, it would take a big one to send that to go surfing in buildings, yeah, yeah.

Andy Rahn: 31:38
Well, I don’t know if this is off topic, but I mean it’s what comes to my mind, because you started talking about market analysis and I’ve I’ve done a lot of market analysis that a classic scenario is appraising a ranch and maybe there’s particular requests from the client to analyze development potential. So the classic scenario is like we’re answering well, we think you know, geez, we could sell us some tracks, or we could take 600 of these acres and chop it up and we’d hate to leave that money on the table kind of deal. So then they hire me to sort of do a market study of tracks and I’ve. I’m often surprised how low the absorption rate is when I roll my sleeves on that on a rural subdivision.

Colter DeVries: 32:25
Yeah, yeah, 200%.

Andy Rahn: 32:28
Yeah. So it’s like you do your research and you find out, okay, two or three of these type tracks sell a year, and that’s in a pretty hot market. So now this ranch family is thinking about creating dozens of those and putting on the market and and they’re going to be in competition with those two or three that tend to or whatever you know tend to three, two to three sell. And you know there’s probably three times that many or two, three times that many on the market, right? So you’re in competition with that for that small price and you just do those calculations and you say, well, okay, you know, in 20 years you can probably get this sucker sold out.

Colter DeVries: 33:06
Yeah, that is a longer absorption rate and that’s definitely what we see with rural subdivisions.

Andy Rahn: 33:11
But a lot of landowners think, oh, I see some, you know, boys, you know people are moving in here and wanting housing and this and that. So, you know, boy, we can just do this and snap our fingers and we’re going to get four times the ag rate, you know, or whatnot. But then you tell them, well, okay, you’re going to be, you got to be a developer. I mean, you know, you got to do the development stuff. That’s time and money and planning is cost into it, costs into it. And then you’re going to do this whole thing and you’re going to watch it. You know, take 20 years and, by the way, that’s going to ebb and flow pretty dramatically right. We’re going to have years like 2021, where you’ll sell twice as many as you expect, and then there’ll be slow years where nothing sells. So I mean, it’s a little off topic as far as stigmatization, but there’s a lot of underappreciation for factors like that. And even myself, you know, when I roll out my sleeves and do those projects, I’ve been surprised a number of times like, wow, I mean, I’ve done stuff along the Yellowstone River here. You know Billings and Laurel and Park City, and you think, well, yellowstone River tracks like that’s pretty premium, right. Who doesn’t want a nice track on the Yellowstone? It’s like well, there’s only a couple a year that tend to sell, you know.

Colter DeVries: 34:22
Alright, you have situational analysis, talking about stigmatization and influences on that value. Say, I am a landowner and I had a disagreement with my neighbor years ago and we that doesn’t sound like you. Well, this isn’t. This is not a real example. I have plenty of those. I have plenty of those.

Andy Rahn: 34:52
This one’s really asking me to stretch my imagination right now.

Colter DeVries: 34:56
This was completely fabricated. I can give you anecdotes off the record.

Andy Rahn: 35:03
I can give you anecdotes.

Colter DeVries: 35:11
You’re talking about the mask mandate thing.

Andy Rahn: 35:16
Any number.

Colter DeVries: 35:18
Oh, there’s a few, yeah, yeah. So him and I never, we never mended our fences and I go to sell this and he wants to spite me or she, and he puts up a big red sign with white lettering next to my driveway and it says I am an asshole and you’re not going to get along with me. I am a terrible neighbor. Yeah Well, you’re going to drive out there for your appraisal and you’re going to do what?

Andy Rahn: 35:51
Yeah, well, even a more realistic example is like the you know those shithole property like a really trashed Like. I remember I worked for a client that bought a really nice property in the Whitehall area and Whitehall area. You know, whitehall used to be the joke, it’s suburb of Butte, so there’s a fair kind of working class, very red neck, yeah right, mining working class red neck. And you know there was one of these properties that was just a shithole, it was just a trash accumulator. I mean the guy literally had God knows how many burnt out trailers and I mean junk like a junkyard, like a private junkyard. Just look like shit. Right, right next to this property that was a. They were restoring, you know, spring Creek fisheries, on this place they were going for. You know we were talking about Paradise Valley, chico. You know, on the way to Chico there used to be the Ted Mosier place. That was that I do recall. Yeah, and you know, in the end I don’t think Chico had to do anything. I think it was bought, you know, by someone else and they cleaned it up, but. I know there were times where Chico was like made tried to you know.

Colter DeVries: 36:59
I didn’t know that. You knew the guy’s exact name. I just recall Mosier, yeah, when I was younger, driving by to beautiful Chico and all of these out of Staters, tourists in the Paradise Valley, and this dude had a junkyard. Junkyard I think he had like a single wide upside down. Oh yeah, I think he flipped one up.

Andy Rahn: 37:21
Well, I knew him by name because I lived out there and you know, out there they have, you know, dump stations. Right, you take your trash to a to a dump station and you’d show up to be dropping off your trash and Tom Mosier was there picking stuff up.

Colter DeVries: 37:42
I did not know that backstory, but I did think that guy’s a badass.

Andy Rahn: 37:47
Well, and I again because I worked for Chico and knew the owners and stuff and I think I that’s coming back to me. I mean I think they, and I’m sure other neighbors too, right Like, tried to talk to the county committee, you know, tried to do stuff but tried to take his private property. Yeah so you have a right. You have a right to trash your property. I mean, you know it’s a accumulate junk on your property. There’s no, there’s no way to prevent that or no basis to prevent that.

Colter DeVries: 38:11
Yeah. So who’s the arbiter of what junk is? Who’s the same junk? Yeah?

Andy Rahn: 38:15
Yeah, yeah, yeah. So yeah, I mean as an appraiser, I mean I don’t, I can’t say that I’ve ever and that was a consulting thing that I’ve been talking about in Whitehall, so I didn’t, I don’t think do an actual appraisal. But that could be a tough, a tough thing. It’s like, okay, I’m appraising this property, it’s it’s next door to I mean, well, I did do a consulting job on properties adjoining gravel pits because I did this for a client who had a beautiful property in Gallatin Gateway and a gravel pit opened up next door and for a lot of it for her was just quality of life. I mean, they were, they were, they were going around the clock and running those. You know the mandated backup beepers on these massive pieces of machinery. So like the dust, the noise, the all this kind of stuff, the OSHA beepers on your heavy equipment, yeah, and this is interesting she she was getting. She had no relief with legal channels or like with the county or you know anything like that, and I was kind of somewhat of a last resort, if I recall. You know, get an appraiser to do a property diminution analysis and take that to the county, the I think the county commissioners or it wasn’t the commissioners, it was a, it was a committee of some kind, it was a board of some kind. They were kind of like, I think their stance was well, you know, we can’t do anything without some sort of verifiable impact. And she hired me and I was able, I was able to document an impact for studying properties adjacent. And when I took that to that board they said, okay, now we’re, now we got something to work with. And I don’t remember what they worked out. But the landowner was a static because she’d been dealing with this with years getting nowhere. But you know, that was a challenging project. Project because it was a mix. There were properties that I mean. There was one great, really nice property sold next to a gravel mine and the guy didn’t give a damn. He was kind of an industrial, he had an industrial background. He’s like I like this stuff, I like big machines. It’s very subjective. It’s very subjective. But to your original question, though if you’ve got a, if you’ve got a prop, if you’re adjoining a property that has an issue, there’s a term for that, there’s an appraisal term for that. It’s not externality, but when a when the environment, there’s something in the environment, there’s something outside of your property affecting your property essentially a neighbor, neighboring property, and I mean. without a doubt, that can be real Again, especially in Montana, where aesthetics and quality of life and all these things tend to be a backbone of the market, you know.

Colter DeVries: 40:53
Yeah, it depends on the market. I mean, how desperate someone is to move to Bozeman at that time, yeah, I still think, wouldn’t you believe? Or am I not far off in thinking, that, like with the Zorro Ranch, epstein kind of, the baseline value is going to be cattlemen, like if no one else wants which it sold, someone bought it. But if it’s not going, I don’t know what New Mexico, that place was doing. Let’s say, 500 bucks an acre, if that was what the neighboring places were going for and they couldn’t get it, I would think that 300 bucks an acre for the cattlemen is what they were paying. And that’s like I’ll craze this. I’m not proud of the story on that side of the ranch where that big lodge is, but this is cheap grass. This is good for my bottom line.

Andy Rahn: 41:52
Yeah, the stigmatization probably didn’t diminish the baseline value but any kind of like you know, because he obviously improved the property and tried to create a different highest and best use as kind of an executive retreat type place. Full value of that development was probably impacted. If it was not Epstein, right. If it was, you know, bill Gates or something he was there, I’m sure, right. But if it was a neutral, so to speak, or right like somebody that didn’t have a stigma attached to you know how he lived his life and what he was, you know, convicted of or I guess he never got convicted Then maybe that highest and best use, that that that upgraded, that developed highest and best use would be realized, and perhaps not in this case. Okay.

Colter DeVries: 42:49
I would I buy that you’ve earned your appraisal fee.

Andy Rahn: 42:54
Am I in compliance? Was that you? Was that use pap compliant?

Colter DeVries: 42:59
I’m not going to dicker too much with you on your feet now. All right, 15 minutes left. What’s going on today’s the end of August? Yeah, what’s going on in the ranch market?

Andy Rahn: 43:13
You know I just had a conversation with this morning who’s our buddy Chris Payton is his name with the progressive farmer.

Colter DeVries: 43:20
Yeah, yeah, so the chief policy editor yes progressive. Farmer magazine media progressive farmer progressive farmer media.

Andy Rahn: 43:31
Both you and I talked to him earlier this summer and he said he’s getting his article put together and one at one last conversation and I. So I had this conversation this morning and I keep. I keep imagining a visualization or something that I would be able to put on Montana land source. But I’m going to take a whack at this. So imagine there’s a straight line graph with quality of property and price in the market right.

Colter DeVries: 43:58
Price is the X axis and quality is the Y.

Andy Rahn: 44:01
Yeah, and just let’s just say, for say sake of simplicity, it’s a straight line, it’s a, it’s a linear relationship like higher, higher quality properties, you know, get a higher premium and it goes down from there. Right, and just say that line is at some kind of an angle. I’m, I think, in the Montana land market, when the market is hot, when the market is up, that well you could say that whole line goes up, but obviously, but it gets, it gets more level. The bottom end is what really gets lifted, and in you know, I mean the whole line gets lifted. But then times like right now, which is you know it’s, we’re not experiencing a crash, but we’re experiencing a correction, to be sure, but it doesn’t seem to be affecting the top tier properties. Top tier properties seem to be trading as strong as ever. So the but the bottom end is what’s really? Because if you look at Montana Land Source, at the stats that are on there now, you know on a across the state average or median basis, prices are down, but I don’t think that affects every segment of the market. I don’t feel comfortable saying that the market overall is because we’re seeing some pretty high sales on particularly the top properties.

Colter DeVries: 45:15
So you saying it becomes a rather than linear, becomes a U curve.

Andy Rahn: 45:20
I don’t know. I’m not even talking about the curve, I’m talking about the pitch, I’m talking about the angle. The bottom, the bottom end drops and it’s almost like you could put a pin in the steeper slope. It’s a steeper slope, yep, yep. And I really think the B and C and D and below properties are what are more volatile. Those, those, those. Right, and I mean it makes sense. You know, the good stuff always sells, the good stuff always does well, and a big part of that is there’s a shortage of that. There’s, you know, there’s always a shortage of top properties. So even in the worst parts of the market cycle. You know a truly special property comes up. It’s likely to sell at a good price, right, so that top stays preserved.

Colter DeVries: 46:03
Okay, so the slope is getting steeper, meaning the A properties are receiving a higher premium.

Andy Rahn: 46:09
Yep and the less than A properties are receiving lower premiums. And you know like, in if you watch my weekly reports, we’re seeing a lot more price reductions than than typical. So that’s reflecting this correct correction market. But I think those price corrections are, you know, I don’t want to say sub par properties, but not a plus properties, right?

Colter DeVries: 46:34
In their own minds they are.

Andy Rahn: 46:35
Yeah right.

Colter DeVries: 46:40
They’re not even on the USDA grading scale.

Ranch Investor General: 46:42
They’re not prime. They’re on the.

Colter DeVries: 46:44
Japanese A5. This is an.

Andy Rahn: 46:46
A5, wagyu Ranch. But it’s kind of interesting because in general and I you know I rail about this a lot because it just seems like sellers in Montana often are pretty unreasonable and unrealistic and have high expectations. We’ve talked about this a lot but clearly there is some recognition because the there are price reductions. So you know, I guess I’m guessing that that’s brokers successfully communicating with their clients, that Well, that’s a hard one is to go tell someone that they have a B grade property.

Colter DeVries: 47:21
Yeah, oh, you just insulted their.

Andy Rahn: 47:24

Colter DeVries: 47:25
Well, yeah.

Andy Rahn: 47:26
Yeah, yeah. And then you got guys like me that are hedging against, saying that the market is down or correcting because it’s not true across all sectors, and then landowners pick up on that.

Colter DeVries: 47:37
Yeah Well, prices are down, but not from my range, right.

Andy Rahn: 47:45
But I’ve been thinking about that visualization. I keep imagining, you know, some kind of a active visualization that shows the pitch of that line and that’s how I’m starting to see the Montana landmark it is. I mean that that line goes up uniformly because you know, land appreciates in Montana almost, almost always. But then the pitch changes and I think when the markets hotter it becomes more level and those those other way I think about it is like a water level rising right, Like a water level in a bay or something or a marina, right Like rises, all boats. So in hot market times all the boats rise right, yeah. But then when we get into correction and into more sort of normal market cycles, we see that a differentiation in the market where, and again, the top of the market always does well, always seems to appreciate, and the less than prime properties are more dramatically affected. High tide floats, all boats, Yep. So that’s what I think we’re in a correction period. It’s funny I’ve characterizes it often, Like in my weekly reports I’ve called it a pencil sharpening that the buyers are sharpening their pencil. But I talked to the broker did today and he said I don’t know how sharp the pencils are. They were talking about some, so they were part of that. They they actually thought was pretty strong, pretty high.

Colter DeVries: 49:08
I X ranch. No, you know what’s funny about me saying that is I’m wrong. Because that ranch sold for a price, presumably for a price that consensus. The majority of us out there said, oh, that’ll never happen, they’re never going to get it. It’s been on the market for 10 plus years. It’s just going to stay on the market longer until inflation continues to drive up the market around it. But we are wrong. It actually achieved some sort of premium and so that it probably will. What I’m trying to get at, andy is, I think, my rationale and my reasoning is therefore it will again. If one man pays a premium, another man will pay a premium.

Andy Rahn: 50:01
Well, and it’s you know, we need to circle back around with the brokers involved, because that property would could possibly be a case study and stigmatization, because it was on the market for so long and not everybody realizes, but, like when it first hit the market, there was a C Corp involved which is problematic in that. So that was operating assets. Yeah, so that explains part of the problem. So that I mean, you know, I I overlay this interpretation, that that’s what you know kept it, potentially, kept it from selling for a certain period of time. And then you know, my understanding of that ranch was that the owners, excuse me, wanted to stay on the place, wanted to manage the place. So it was, I don’t know that it was a standard offering. There were conditions and issues on the, on the offering, kind, of like.

Colter DeVries: 50:54
private equity Was a ranch sale is a private equity deal.

Andy Rahn: 50:57
Yeah, so I think that was part of the issue and, best I know, you know, eventually, over time, that property became more of what you would call a standard standard listing, like no it’s, it’s for sale and you take it all when you buy it, kind of thing. So that can be a case study and factors because that’s you know those. Those are the things that you would want to do and that’s you know those. Those things I outlined were stigmatization factors in the market, because most people that buy multi-billion dollar ranches want to own it outright and run it as a C fit.

Colter DeVries: 51:29
Right. So my assumption, with the limited knowledge I have around that and what you just said, is that that wasn’t valued based on a comp sale. It was more of a discounted future cash flow as a cap rate. If you’re buying management and the operating assets with it, you’re not. You’re not selling land, you’re. You’re selling an enterprise, right.

Andy Rahn: 51:51
Yeah, and I you know I’m speaking a little bit out of speculation, but I think that that was the case, that it was more complicated, at least initially, when it was first on the market.

Colter DeVries: 52:01
We’re fully allowed to talk shit and speculate on this podcast.

Andy Rahn: 52:06
That’s why we don’t have fact fact checkers.

Colter DeVries: 52:09
We’re sponsors.

Ranch Investor General: 52:13
Can’t cancel me.

Andy Rahn: 52:17
Yeah, we prize our independence.

Colter DeVries: 52:20
Well, that that is interesting and I kind of think for these bigger ranches that that is the future. I think they do sell as an operating unit.

Andy Rahn: 52:29
Well, and then I mean just getting back to the stigmatization issue, I mean that’s the problem. I think you know his, maybe the ranch, when it was initially offered, you know, just wasn’t conforming to the market in terms of being a pure offering right, it had operational issue, you know that kind of stuff. Well, that took a couple of years to sort of. But now it’s been on the market for a couple of years. Not everybody has that backstory and not everybody you know. And I do think you create a situation where, like right, I mean, if you’re, if you’re representing a buyer and let’s say the I X, you know it’s that kind of buyer, it fits, potentially fits. That buyer and you take it to him Isn’t one of the first you know, as, as you’re sharing information, and if, once you share that information, oh yeah, this thing’s been on the market five years, six years, seven years, don’t you think? Then right away that buyer says, well, now, wait a minute, yeah, tell me about that, let’s, let’s talk more about that. You’re right.

Colter DeVries: 53:20
Yeah, this isn’t. What am I missing here? What the hell is wrong with it?

Andy Rahn: 53:23
Because the you know, no one else is bought, no one else has been willing to buy it. So yeah, so I mean, I think that really spooks.

Colter DeVries: 53:30
There’s more to the story I have to do due diligence on.

Andy Rahn: 53:33
now You’re making my job harder and isn’t the other end of the spectrum on that? As far as sales perspective, hey, I got this deal. It’s just it hasn’t hit the market yet. You know, you’re the first to know about it. We got to move fast.

Colter DeVries: 53:46
I don’t do pressure sales, but doesn’t that cycle?

Andy Rahn: 53:50
I don’t hog listings either. Doesn’t that psychological get people excited? Oh, I, you know the, you know there’s a unique opportunity I got to. I got to act quick and decisively because you know versus you know. Clearly this is not a ranch that’s been on the market for a couple years. Clearly that’s not the case.

Colter DeVries: 54:08
Well, I would say you’re doing it. If, if, whoever you’re pitching that pre market opportunity to, if it checks all the boxes, then I think you’re doing your job. You’re doing a good job, you’re providing exceptional service. But if you’re just pitching them bullshit like, hey, you’re going to be first in line, that’s worth something. Huh, you’re first. Look to you.

Andy Rahn: 54:30
Well, you know, I look at like Facebook marketplace sometimes to buy, to buy something right, and something comes along and it’s like, ooh, that you know that, just that just hit yesterday or hit this week. And there’s just feeling like, oh boy, if I’m interested in that maybe I should move. But if I see, you know, they tell you how long it’s been on the market there too, and if you know, you see, oh, three months, two or three months, you’re like, oh, I don’t, you know, no rush here, yeah, and in fact, and in fact, I might want to really think hard about price. You know, well, now I got to start thinking about how much lower I’m going to offer, because clearly, if it was worth that, it would have gone.

Colter DeVries: 55:07
Oh, that bit me in the ass several times in 2020 and 2021. Yeah, because I didn’t believe that the market we were in was real and I was going from the old school, 2019, prior that these listings on the market and I had a few of them myself that had been on the market for quite a while that they were just going to stay on the market until there was a price reduction. So I mean, definitely I missed out on millions of dollars of sales because there was no sense of urgency, there was no rush, given history, but we did not know what we were in the middle of at that time right, right.

Andy Rahn: 55:50
Yeah, it really was something I Mean. You remember I got in trouble for early in that deal, putting out a little bit of a blog Saying that it might be yeah, that it might be slow. That uncertainty you know Larger economic uncertainties can harm our market. That was the day. That was the potential downside. Oh yeah, yes, yeah well and it, what you know, I, I was right up until summer of 2020, right, because the spring of 2020 Kind of shut down, you know why. You know everything froze up and deal, including deals you couldn’t do showing is all this kind of stuff Everybody was kind of like. But then, starting about mid 2020, it’s like Montana, it was safe Relative to the rest of the country, all these things, and then it it caught up, you know, but it was like it dipped early 2020 and then, well, caught up for it. By the time we were sorry, yeah, by the end of 2020 and then March, right into 2021, which was a record-setting year. I guess we have a little more to talk about the stigma.

Colter DeVries: 56:55
Going back to the I X. In my belief now, after seeing just Crazy shit cell over the last three years, it reminds me of Bitcoin and Cryptocurrencies when those took off and Warren Buffett said that’s, that’s the bigger fool. It’s the only way you can win at cryptocurrencies. The bigger fool. I Don’t know if you call it a paradox or what. There has to be a syndrome.

Andy Rahn: 57:23
You’re dependent on a bigger fool than you.

Colter DeVries: 57:25
Yes, yeah, the only way you make you’re a fool and you’re only succeeding.

Andy Rahn: 57:28
You’re only successful because there’s a bigger fool.

Colter DeVries: 57:30
Yeah, yeah, and I kind of kind of feel that way about the I X, but I it doesn’t cause me a lot of alarm and concern because I think, well, history has shown in the last three years that there is a bigger fool out there, that you’re not going to be the one left holding the bag.

Andy Rahn: 57:51
But you know, back to Warren Buffett, I think part of the point is that you can’t yes, those fools and those deals are out there, but it’s not exactly a business plan, it’s not exactly a no, it’s speculation. Yeah, you can’t, you can’t count on it.

Colter DeVries: 58:07
Just because some people make a killing Doesn’t mean it’s a so it’s a gamble, it’s speculation, but I so I’m trying to hear, I’m here trying to, you know, sell ranches and I’m just trying to deliver my sales pitch right now.

Andy Rahn: 58:20
So everyone calls me. Didn’t you just say earlier you don’t blow smoke up anybody’s ass? No, you didn’t say that. I think on that part.

Colter DeVries: 58:27
I’m saying, if it is a gamble and if it’s speculation you’re taking, you’re taking a futures position. I Think the risk is. I think I don’t think the risk is as high as I perceived it to be Previously. That’s, that’s the only way I can summarize. That is, I do think that this gamble, the speculation, has a lower risk Than previously assumed.

Andy Rahn: 58:58
Well, we’ve talked about this in the past too. I mean, the risk is Diminished greatly by holding time a. So, and sometimes when I look at Properties that I question the price. You know, it seems like maybe you know someone overpaid, right. One way of thinking that well, they prepaid some appreciation was, was it? That’s the extent of their risk and their exposure, because Land appreciates virtually every year in Montana, historically, and so you overpay a little bit. Well your first couple years maybe you’re, you’re catching up. But especially if you’re holding, you know flipping is an you know, or short, short holds, that’s another story.

Colter DeVries: 59:40
But Most purchasers seem in the market To that have the intent anyway of holding for Well, in this ranch is being an alternative asset with a limited market, high transaction costs, everything we’ve discussed about Quote-unquote, a broken market. I think you and I have gone so far as to say, well, it’s definitely an imperfect, imperfect, yeah, yeah, not broken because you have people like me. No, I shouldn’t say people like me, it’s not broken because you have me, I’m a participant.

Andy Rahn: 1:00:17
You’re helping. Keep it this. Yeah, I’m, I am Atlas, you and I.

Colter DeVries: 1:00:22
You and I are out here doing our best the way this shit, the weight of the world on my shoulders.

Andy Rahn: 1:00:28
We’re trying to make this market resemble, we’re trying to make assertions and, yeah, we’re trying to interpret this market, but normally you’re not you’re not gonna be able to be a flipper in ranches. No, that’s tough, that’s tough. Yeah, that came to my mind earlier this morning in a conversation working for clients in the past that want to Invest in Montana land and have a short Hold time. That’s, that’s tough.

Colter DeVries: 1:00:58
Well, what do you see going for from here? As we Wrap this up, what’s your crystal ball saying?

Andy Rahn: 1:01:04
I think we’re gonna have this slow, slow market for a while. I mean, transaction volume is way down, inventory is down and you know, it’s kind of chipping, it’s kind of rebuilding slowly inventory is down from what pre-covid. Okay, so yeah, so today on the market, I believe, and we we post these stats live on Montana land source, I believe today there’s something like 360 knock it on 370 Active listing properties 200 acres and larger in Montana pre pre-covid that was six to seven hundred.

Colter DeVries: 1:01:43
Okay, so we are. Was pre-covid? Was that like the all-time, all-time high of inventory and supply?

Andy Rahn: 1:01:50
Well, it’s a little tough because Montana land source was only Going, you know, for a few years. I only have a few years, so I think, let me think this through. I want to say 2017, I Think my dad, 2016, 2017, so those three, that’s only three years, but I suspect, I mean I, you know, I think it’s, I think it’s growing over time because Montana, you know, has grown population and the end market activity, but I Not dramatically though I I’m, I suspect that I think that 300 listings I Mean I don’t have, I just don’t have the data Going far back, but I don’t think that’s been normal for a long, long time.

Colter DeVries: 1:02:37
Do you have a? I mean, we would have to. What was the bottom? The absolute low supply, probably like November of 21? Was probably around the lowest inventory has ever been. So do do we have a growth rate from from then like oh supply growing at 3% a month or is?

Andy Rahn: 1:02:58
Yeah, I don’t have it quantified, but yeah, it’s been a very slow because it the lowest. No, yeah, the lowest was. I think the lowest was December. I’m thinking this through. I think actually the lowest was December of 2022, I think the tail end of 2022. We dipped below 300. It was like 2 9 in the 290s, because I’ve been watching that number in you. It’s funny. It’s funny the psychology around number right, and so what is 300 mean? But it’s like wow, is it really gonna get below 300? It was dancing there and then it did December. It dipped below 300 listings and now we’re back up to two, threes, but that’s, you know, that’s not. That’s not a big jump, that’s. It’s still very, very slowly rebuilding and you know Are. Though, if, if more properties hit the market, are they gonna trade or they gonna, or is inventory gonna truly build up? I suspect I mean your question moving forward, because I’ve wondered about this a lot. Is this, is this something that’s gonna correct and go bet, you know is are we gonna get back to a 6700? Level inventory or is that? Are we in a new normal?

Colter DeVries: 1:04:06
So I mean to make it relative absorption rate. Absorption rate must be extending. Currently we are on a Lengthening trajectory of absorption rate. Yes, I am climbing from looks hypothetically eight months on average to nine, ten, eleven, twelve actually Days on market are still decreasing.

Andy Rahn: 1:04:32
I think Our data is still showing days on market decreasing. So a lot of these properties that hit are hitting the market, potentially rebuilding inventory are Are are being picked up. Yeah, I mean, you must be a a grade properties. Yeah, or price corrected for properties that get price corrected and actually I kind of think a lot of the high inventory we burn, you know, obviously we burn through a lot of inventory in 2021, 2022. I think that was largely the higher quality stuff, so I think was actually out of the market and that’s why I kind of hedge against saying that the market is down. Statistically the data shows that values are down, but I think that might be reflective of actually lower quality properties trading. I think those properties are being price adjusted and trading and there’s such a low inventory and such a lack of supply and so there’s still is demand out there for properties in Montana. But we’ve, you know, we were in a seller’s market and we’re not and I wouldn’t. I don’t know that. We’re in a buyer’s market, but the buyers have, you know, the negotiations are taking place.

Colter DeVries: 1:05:54
What do you do with the IX when days on market was 3,500?

Ranch Investor General: 1:06:00
That is why I use medians and not averages, because that screws up your averages.

Andy Rahn: 1:06:07
your average, but median is because our market, being as imperfect as it is, has extremes. The data, the data set, has extremes and medians work better when you have outliers than averages.

Colter DeVries: 1:06:21
And acres wouldn’t be a good form of analysis, because that can be so widespread as well. Too many, too many long tails there.

Andy Rahn: 1:06:31
Yeah, well, look at the. You know the Matador, I used to track, you know. As you know, I do those annual. We do an annual event, you know, every year roo-per-mer-dogs yeah exactly. You know huge, you know hundreds of thousands of acres like that. I used to track numbers of acres sold and try to make sense of that. And it’s too. There’s too much variance, there’s too many outliers and that’s a. That’s a consistent problem in studying this data is, and you know, it’s even even getting down to an individual appraisal. Right, it’s like okay, here you got to set a sales and they seem to make some sense. And here’s this crazy one and it kind of begs the question. It’s like, well, on the one hand you can kind of easily throw it out. It seems to clearly be an outlier, but our market is impacted by outliers. That outlier, sure as shit, affected the perception in that area. Absolutely. So you know you can’t. It’s yeah, you’re kind of bringing you back to some of these appraisal projects where it’s like you can’t use it, but you can’t quite throw it away either, right.

Colter DeVries: 1:07:37
Yeah Well, so that gets into. Maybe we should save this one for another episode. I think we should. Market makers are these ranches and some of these brokerage firms actually, I think there’s reason to believe that they have legitimately reached the level and status of market maker.

Andy Rahn: 1:07:57
Well, you know, my mentor, Clark Wheeler, has been talked about as in the especially, you know, especially his dominance in the market. You know, when I got started working for him, which is kind of, you know, pre Montana land source, pre any of these sort of online data resources, that kind of thing he was the, the Oracle, and I know some people made that I don’t know if it’s a good criticism is quite the right word but that allegation that you know he could, he could say things that were you know influential. Yeah, that he was that. You know. At what point does the, at what point does the reporter or the you know observer of the market become a market maker with what he says about the market he could pump and dump if he wanted to.

Colter DeVries: 1:08:49

Andy Rahn: 1:08:49
Right, well, I, that’s my goal. With Montana land sources, I have a mark Damn right. Absolutely.

Colter DeVries: 1:08:55
Yeah, now you’re going to have more people mad about your blog posts and some things. You say, right, well, let’s, let’s do that one another time. That sounds like a fun one. Yeah, market makers, that is a, that’s a deep one that we definitely can go an hour, let’s get the Murdochs and the Wilkes and some of those guys on. Rupert Murdoch, not Alec Murdoch, murdoch from South Carolina who murdered his wife and son.

Ranch Investor General: 1:09:20

Colter DeVries: 1:09:21
Yeah, we could go to his prison cell and ask yeah, there you go Tell us about your ranch sale.

Andy Rahn: 1:09:26
We want to talk about stigmatization. I want to know how he chose which broker like hey, I see this as a niche.

Colter DeVries: 1:09:41
Any other public notices out there that I should be?

Andy Rahn: 1:09:46
It’s a doggy dog world.

Colter DeVries: 1:09:47
You gotta, you gotta Well. Thanks everyone for tuning in. I do have a call to action and ask of my audience and Andy might want to get one in there too. Yeah, I definitely want to hear your feedback on this, this episode, so please leave me a message. Anywhere you see us, we they them. I got it the the Royal Knee. Just let us know what you think about this and how I can bring more effective content what you’d like to hear about. I definitely want to have a mix of what you want to hear and the people that I find interest interesting. I don’t find Andy that interesting but he’s convenient, so. So give me some feedback. Please help me improve this podcast. Thanks for listening and, andy, what’s your, what’s your? Yeah?

Andy Rahn: 1:10:46
my ask is basically just to go to mtlandsourcecom Check out all. We have all the resources. We got a dynamic online map with every large acreage listing on the state mapped and pennings and sales, and we have large, sorry, live market statistics. So as soon as we enter a new comp or new listing, that gets pumped right into those statistics and it tracks back going, you know a year or two and whatnot. So lots of content and, yeah, same thing like feedback, feedback on on my site and I mentioned, you know, a few blog posts which I don’t do enough of, want to do more of. That’s something I’m interested in is what, what kind of content and analysis could I be working on to put out that would be of interest?

Colter DeVries: 1:11:31
I think you’ve been on this podcast so many times that it is. It’s worth it to just throw this out there and pitch it for for you and in our listeners is for you to host a focus group If some of our listeners would want to spend two hours with you, or that sounds like a lot, but an hour.

Andy Rahn: 1:11:55
Do we have a talk about my rates? Earlier Questioning my rates.

Colter DeVries: 1:12:00
And you. You watch them navigate your site and ask questions and get their feedback and you focus group and your API.

Andy Rahn: 1:12:10
Yeah, yeah, yeah, I was part of that with the buddy, because you know, I’m in the Rock 31 Center, which is a you know, entrepreneur, small business hub and a colleague that has a tech platform. I thought this was genius. He invited us, a bunch of us, to his home and created a drinking game out of it, finding bugs. There you go, and I’ll just say I’m not going to go into the details of the drinking game we didn’t have to drink at all. Him and his developer were under the table within an hour. They didn’t quite have the structure of the all the information we were hoping to achieve from this, but but I mean, the amount of bugs and information they got for the price of whatever they paid for the food and drink was pretty astound. I mean, you really put it through the paces and I at that time I thought, said to myself, yeah, I need to do something similar, because this is yeah, fabulous, hit us up audience.

Colter DeVries: 1:13:11
Let us know if you would do a product demo focus group with Andy and help improve Montana Land Source.

Andy Rahn: 1:13:18
Well, but part of the issue is that what I shared at the start of it was bringing on some new tech partners so that I can actually make those changes.

Colter DeVries: 1:13:27
Oh yeah, you gotta follow through.

Andy Rahn: 1:13:29
That is a challenge, yeah, and I’m really trying to bolster my, my tech partnerships to, yeah, get that accomplished.

Colter DeVries: 1:13:38
Well, just do like I do write it down on a piece of paper, you know, put it over there on the stack Somewhere, somewhere in that mess. I’ll get to it. I’ll find it again. Yeah, well, thanks for tuning in.

Ranch Investor General: 1:13:52
Thanks for your sponsor Sponsor Vest podcast.

Colter DeVries: 1:13:55
Bye Listeners of the Rancher Vestra podcast who are receiving this immense value for free. Thanks for tuning in. I do have an ask in place of advertising. I do not monetize this on Spotify, apple, anywhere. I don’t click the monetize button. So I do have to get a plug in here and I ask what I’d like from you is to hear some feedback. So, on our social media, please share this episode. All I all I ask in return for not having promotions and advertising is that you share this, send a text, get it out there so more people can enjoy what we’re producing. Thanks for tuning in.

Ranch Investor General: 1:14:42
We feature only the best accredited and established rural real estate professionals who analyze, transact and manage billions of dollars annually. No newbies here. Click subscribe on your streaming platform so you know when the latest episode has dropped.

Stigmatized Properties
Stigmatization and Pricing in Real Estate
Paradise Valley’s History and Stigmatized Properties
Appraisal Challenges in Unique Property Market
Market Analysis and Property Stigmatization
Impacts of Stigma on Property Values
Market Timing and Speculation Impact
Discussion on Montana Land Market