Andy Rahn: 0:00
That fantasy that whatever you pulled out of your attic or basement is going to be this home run, and don’t you think that’s basically the phenomenon that sellers in Montana have?
Colter DeVries: 0:08
I’m Colter DeVries, owner of Ranch Investor Advisory and Brokerage Services. I’m an accredited land consultant with the Realtor Land Institute and a proud member of ASFMRA.
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Colter DeVries: 0:28
Andy Rahn. Welcome back.
Andy Rahn: 0:31
Thanks, it’s been a, it’s been a little bit.
Colter DeVries: 0:34
It has been a while. So, we are tax, just about tax day. April, mid-April 2024.
Andy Rahn: 0:43
I gotta go.
Colter DeVries: 0:44
Go file an extension. That’s a free loan from the government. That’s a zero-interest rate loan.
Andy Rahn: 0:51
Can you just continually roll them over?
Colter DeVries: 0:56
Refinance your tax due. Re-amortize that for me. I’ll pay it next year. I’ll get you. I’m good at it. Until I die, then you can come after everything I’ve bought without paying taxes on it.
Andy Rahn: 1:10
Everything I don’t have.
Colter DeVries: 1:14
Yeah, everything I’ve transferred out before death. Well, yeah, April 2024. What’s going on in the ranch market?
Andy Rahn: 1:24
Well, I mapped four new ranches today. So, I’ve been kind of waiting because usually, in spring, we see a ramp-up because it’s coming into ideal showing time, right? Green up, green, green on the fields, and snow in the mountains.
Colter DeVries: 1:38
That’s what we brokers like to tell everyone. Get it signed now, and get the listing agreement signed now. It’s the best showing season coming up. Green grass shots. Yeah. I got to get my photography out there.
Andy Rahn: 1:49
Waiting to see, you know, if we’re going to see some inventory rebuild, and I mean, maybe barely, but, still kicking around just barely over 300 listings.
Colter DeVries: 1:59
The inventory will rebuild as we continue to see the, spread in bid-ask. The bid price and the ask price, the spread, the difference is just widening.
Andy Rahn: 2:11
I have seen a lot of high-priced listings come on the market. I am just surprised at the pricing.
Colter DeVries: 2:20
And the buyers aren’t there. And that’s, that’s going to, that’s going to reduce the conversion factor, the conversion rate of properties leaving the market, so the supply in the farm and ranch will increase.
Andy Rahn: 2:32
Well, I haven’t had a chance to follow up with these brokers, and you know not all brokers want to talk to you about this, but just those pricing, you know, I just wonder if it’s seller-directed, I mean usually is, especially when it’s really high, and it’s just got to be the classic Montana land seller that’s got their price and but not very motivated past that.
Colter DeVries: 2:54
Oh, absolutely. I mean, I made an offer on one listing in Eastern Montana recently, and the offer was 50 percent of the asking price. We were at it just over a two cap on that, how we came up with the value and the property was better, in my opinion, it was better attributed as a cap valuation because it was kind of an investo- type property. There’s a lot to it is it’s almost more industrial than it was agriculture.
Andy Rahn: 3:27
Um, I mean, it’s a kind of industry, any timber?
Colter DeVries: 3:30
A lot, just a lot of pumping costs, a lot, a lot of pumping, a lot of irrigated farmland. And so in my opinion, that’s, that plays well to institutional type investors, cashflow type. People are, you’re not going to go out there and play cowboy on several thousand irrigated acres.
Andy Rahn: 3:52
When it’s costing you a thousand dollars a month to water.
Colter DeVries: 3:55
Oh yeah. Uh, 10, 000 a month, 12, 13, 14 000 a month. So yeah, I put a cap rate value on it. Came up, given what I thought, you know, just over a two-cap. I was like, you know, the market that this is actually probably higher than what the market requires as a risk adjustment because of all the pumping, so really, it probably should have been more like a three cap, so I thought that our price offer of 50% of asking price was more than reasonable and we were told to pound sand.
Andy Rahn: 4:36
Yeah. Yeah, I’m actually curious about that. I just recently, a buddy of mine is considering making an offer. Not, it’s not quite as low as 50, but it’s close. And I am thinking, you know, why bother? And don’t you run the risk of, you know, maybe even pissing off your seller and, you know, is it worth making an ass that low? I mean, you, you went through it.
Colter DeVries: 4:59
I mean, if it’s been on the market a while, I tend to believe that. Yeah. It’s worth making that offer. Cause you’re not the first guy to beat them up on price. You never want to be the first, second, or third guy to beat them up on price. You want to be the fourth, right?
Andy Rahn: 5:15
Right. I will say I’ve had brokers, selling brokers be a bit encouraging about it because they want to, they want their sellers to be beat up a little bit. Cause they know they need it, but they can’t do it, or they’ve tried, you know.
Colter DeVries: 5:33
And we want, you know, we give them a CMA. Okay. And then when the sellers say, oh, no, double it, put it on the market, take that CMA, double it, and put it on the market. You know, then when offers come in that were our BPO was at least a broker’s price opinion, then it’s confirmation. This is what we told you, and we were being factual and straightforward. Uh, forthright with you.
Andy Rahn: 5:58
Back when I had my license, the last listing I had, we only got two offers in two years, and they were both the exact same price, and they were both half of what the list was. And I remember the seller at the kitchen table saying, I just don’t understand it. I just don’t. Why, why that number?
Colter DeVries: 6:17
Because the buyer’s done their homework.
Andy Rahn: 6:20
And they were, they weren’t connected. They didn’t, they didn’t have access to each other’s offers. So they were two independent offers, exact same price, half, half price a list. And the seller just, couldn’t wrap her brain around what was going on.
Colter DeVries: 6:33
That is, that is funny. Um, cause farms and ranch are different than other areas of real estate, right? And I’ve been in the position of trying to buy a house right now, which is not fun. Um, fortunately, we have one under contract, but for the first four offers I wrote, I was off quite a bit. I was off 20 percent of the asking price, actually, on average. Yeah. I came in 20 percent less than the asking price and that’s because 2023 was weak in residential.
Andy Rahn: 7:05
Yeah, softened quite a bit.
Colter DeVries: 7:07
My theory was that interest rates would stay the same. Um, Inflation is not going to continue ticking up, although I’m wrong there. We’re starting to see that it is ticking up again because the Billings residential market is back into multiple offer situations. I did write a full-price offer on a house we really liked, and there were seven higher offers.
Andy Rahn: 7:30
At full price.
Colter DeVries: 7:31
Yes.
Andy Rahn: 7:32
Interesting.
Colter DeVries: 7:33
Which was a funny situation because the listing agent, she didn’t have to, but she came back and she’s a culture. There’s going to be seven more offers coming in. And, uh, I said, bullshit, I’m not making an offer above the asking price in this market. And we really love the house, but we found one that works.
Andy Rahn: 7:52
Well, I’m just continually surprised how, and I’ve been kind of, uh, thinking about the best language on this, but how divorced sellers are from the market phenomenon. So you remember the presentation I gave every year, uh, in February? And the most surprising thing that I came up with as I was, you know, going through all my data on that was showing that going into 20, the end of 2020, 2021, 22, which were record-setting years in the Montana land market. Like I’m not sure we’ll see that again in our lifetime kind of, kind of deal. There was no bump in supply. There was no I mean, you know, we know the story now. We burn, we burn through inventory and that’s where we’re still at is a, you know, as a depressed inventory situation because we burn through inventory, but there was no bump in the rate or the number of listings. No, I mean, what market doesn’t have that big of an increase in demand and have a corresponding reaction with supply.
Colter DeVries: 8:58
However, there was all that off-market activity.
Andy Rahn: 9:01
Yes, that’s true. But, uh, I still, I still think, though, the data shows that there’s a surprising disconnect between market forces and the sellers in Montana.
Colter DeVries: 9:17
Oh, absolutely.
Andy Rahn: 9:19
I mean, I think, you can comment on this, surely. You know, I just think, I think when, uh, sellers go to market, it’s largely internal factors that drive that families are ready, you know, whatever, you know what I mean? Like, it’s rare. I don’t know. Have you ever heard someone say, boy, you know, I’ve been watching the market closely, and I, I think I, you know, now’s the time to sell, you know, it, it seems like, they get divorced. They get, you know, the, the breaking point, if it’s, uh, if we’re talking about. You know, old multifamily ownerships that finally hit the market. Usually, it’s some kind of breaking point within the family. You know, the offsite siblings have had it forced the sale or, you know, mom dies, or dad dies, and that’s it. Or, you know, stuff like that.
Colter DeVries: 10:07
I can relate personally. We’re kind of going through that right now with my family and a part of the ranch. And I was, I was drawn up the CMA, and I, you know, trying to tell all my brothers and my dad what I think it’s worth. And, uh, then I got to thinking about it as someone who has an interest in this. I’m a part owner of that. I was like, well, bullshit. If it’s, You know, the market’s telling me it’s worth that, but I would never sell it for that.
Andy Rahn: 10:36
Plus, your dad’s looking at you, and he’s like, didn’t I wipe that kid’s ass? Just like last week.
Colter DeVries: 10:40
Yeah. Why should I take his opinion? Um, when we’ve got, you know, a lot of implications of wealth and legacy dynasty and all the years of hard work on your opinion.
Andy Rahn: 10:53
Yeah. That’s what I think really comes down to if we’re talking about. Like your family, multi-generational ownership is, you know, it’s, that’s the last asset or its accumulation. It’s about, you know, so it, and I was going to say this earlier like it never ceases to amaze me when you’re talking about ag operators, cause their sophistication around markets with their commodities or equipment or is like unbelievable, right? I mean, they are the market. They could have P, and some of these guys could have P should have an honorary Ph.D. You know, but then land, it just all goes out the window there, you know, and you try to talk to them about supply and demand or what the market’s doing. And they just look at you like you’re the biggest idiot.
Colter DeVries: 11:37
Well, and going back to my experience with residential right now. Yeah. So I was writing offers at 80 percent of the asking price, and one of the agents, she goes, Colter, I know that you’re a farm and ranch guy, that this isn’t your area of expertise, but I know that you guys like negotiate over huge differences, millions of dollars in, in the huge spread bid-ask spread 40%, 50%. That’s not residential. offer is not going to work. You can’t come in and make an offer of 80 percent of the asking price on a home.
Andy Rahn: 12:14
That’s so funny hearing you say that a residential broker talks, because I feel like, don’t we do that in the opposite? Don’t we, uh, roll our eyes about residential brokers like they don’t know shit. You know, they got this simpler market and you don’t understand, you know.
Colter DeVries: 12:34
Yeah, like, well, and her point was that they’ve got it more dialed in.
Andy Rahn: 12:35
I wouldn’t argue with that.
Colter DeVries: 12:37
Liquidity is quicker, I would say, because they price things more accurately.
Andy Rahn: 12:40
I would call it a higher-functioning market, a better-functioning market. There’s more, you know, higher volume and more standardized products. It’s more of a commodity. I mean, land in Montana just doesn’t fit as a commodity.
Colter DeVries: 12:55
No, no, no replacement.
Andy Rahn: 12:58
I struggle with the term market sometimes, sometimes I’m like, I don’t know if calling this a market quite.
Colter DeVries: 13:06
Well, we know what it is, what it reminds me of is I’ve been getting heavy into Antiques Roadshow on PBS.
Andy Rahn: 13:20
Is this your blow-off steam? Is this your, like, if you come home and tell the wife and kids to shut up and drink your cocktail and watch it?
Colter DeVries: 13:26
Yeah. Yeah. So. Since I’m a millennial, I don’t drink. Cause you know, that’s, that’s the new thing is millennials. Yeah. You’re drinking mocktails and
Andy Rahn: 13:34
They don’t have as much sex. They don’t drink. It seems like things are going downhill for me, but what do I know?
Colter DeVries: 13:44
Do they have any fun at all? You guys are a bunch of sticks in the mud, right?
Andy Rahn: 13:53
I thought it was supposed to go the other way around.
Colter DeVries: 13:58
And so that’s, I come home and turn on a little, uh, Antiques Roadshow on PBS, and my wife watches the Real Housewives of Salt Lake City and drinks fake wine.
Andy Rahn: 14:08
Just the millennial dream.
Colter DeVries: 14:09
Yeah. And I have my, uh, decaffeinated coffee. Yup. And, uh, and, uh, The wide range of things that come across there from jewelry, art, furniture, antiques, historical relics, like Chinese pre, uh, era, Chinese pottery, all these things, there is a market for them, right? And you do have the appraiser who comes and gives you his opinion. Um, But you just don’t know what it’s worth until it goes to the auction block. And, and there, all of these, what I’ve noticed is a lot of what they feature these pieces. You should watch this. You should get into some antique roadshow.
Andy Rahn: 14:53
You know, I got to admit, I have watched a little bit of, is it Pawn Stars? Kind of a similar deal where crazy characters come in and demand. You know that they sell their piece of crap or that their piece of you know That their jewelry is real when it’s not and all this stuff.
Colter DeVries: 15:06
These aren’t these aren’t crazy characters. These are everyman’s on the Antiques Roadshow.
Andy Rahn: 15:13
It isn’t part of the appeal of that deal I mean, some of it, some, you know, it’s junk, but it isn’t the whole it’s almost like a lottery thing, right? Like you, some funky little thing that you know It’s been in your family’s attic for generations, you pull out, and it turns out it’s a multi-million dollar You And they, and they’re surprised, and it’s like winning the lottery. Isn’t that kind of the premise?
Colter DeVries: 15:31
Yeah. Cause, like a side table, a Federalist side table from the 1700s, I saw it yesterday. He valued it at 250, 000 and then they updated it. They thought that today it was worth 600,000, and I was like, for a side table. Did Thomas Jefferson like sign the declaration of Independence on this?
Andy Rahn: 15:54
Like what is. Spill some scotch or something.
Colter DeVries: 15:56
Yeah, and that’s part of the thing is the story behind these pieces. So everyone has a story, and A lot of times, the appraiser will say, well, you know, actually, this is worth more if you can verify and prove that story corroborate if someone can do that what you’re telling me
Andy Rahn: 16:15
I took an appraisal course, and there was an art appraiser in there and he told the story about an Andy Warhol print. Uh, he was screwing around with an intern and, uh, she tried to, she tried to shoot him and, uh, the bullet went through the print, and it’s, not one of his best pieces of art, but it’s one of his most valuable because of that story.
Colter DeVries: 16:40
So there you own the story.
Andy Rahn: 16:42
That’s yeah.
Colter DeVries: 16:44
You own the right to tell that story. That’s like a, um, it’s like a copyright. It’s like, a trade secret, um, artistic rights. Well, that’s what you’re buying. You’re not actually buying the damn thing. You’re, you’re buying the, uh, artistic creation of the story behind it.
Andy Rahn: 17:01
Well, now you’re making me think, you know, all the listings I look at and map as part of Montana Land Source, how poorly sometimes that is marketed. I mean, obviously, uh, brokers are more and more leaning into that all the time, I guess I would say. And sometimes it’s just pretty eye-rolly, you know, But other times.
Colter DeVries: 17:18
I’ve done some eye-rolling.
Andy Rahn: 17:20
I wasn’t mentioning any names, but sometimes it’s like, whoa, you know, this, this place really does have a pretty cool story, and it’s. It’s presented well and that kind of stuff, you know, but I mean, that’s the, isn’t that part of the dream that cow play cowboy dream is, uh, you know, some historical event happened there or, you know, whatever, there’s, there’s, there’s your own piece of history. You own a piece of the West.
Colter DeVries: 17:41
Yeah, absolutely. Yeah. You own a piece of the legacy there. And then some of those stories. Talk about the market, like Jim Espy, he sold a ranch that was near Fort Bighorn, which Fort Bighorn was paramount to the frontier of the west in Montana. And John Colter. Carved his name into some sandstone on that ranch. He sold.
Andy Rahn: 18:22
Either that or Jim.
Colter DeVries: 18:24
Yeah, we can get to one later like that.
Andy Rahn: 18:26
What about the property where John Dutton was shot? Is that going to?
Colter DeVries: 18:30
But the thing like John Colter? Yeah, it’s historical. It’s really cool. It’s super unique. It’s probably not going to influence the value all that much because the market for John Colter fans is pretty limited.
Andy Rahn: 18:51
I bet not a whole lot of them have millions of dollars in their back pocket, for a ranch.
Colter DeVries: 18:57
No, no. And I mean, well, in his name, you know, it doesn’t carry that of Lewis and Clark. If it was a Lewis and Clark signature, it’d be worth a lot more on the ranch. Um, but yeah, John Colter, you know, that’s a more nuanced historian, uh, history buff. So limited market there. It’s that I’m sure that aspect of it influenced Jim’s sales any more than 1%.
Andy Rahn: 19:24
Right. Right. Well, and there, you know, we’ve seen things, uh, for some reason, it makes me think of, I’ve appraised a couple of places with dinosaur bones. And it’s like, and this, and uh, whoever, you know, I’m working for, wants a high value in these cases, and talking up the value of the dinosaur bones. I remember I did a project in northern Montana, on a ranch with a ton of dinosaur bones, and, the buyer bought it for the bones. But he, he paid market price for, it was mostly a dry cropland place, with a whole bunch of, um, bluffs, a whole bunch of, um, breaks. especially where the bones were exposed. But on, you know, the plateau, the tops were all cropland. And it was like, I don’t know, back, back then it was like 700 an acre, you know, six, 15 acres, 700 an acre, cropland. That’s what he bought it for. Uh, so, you know, I could, there was no evidence in the market that bones brought any more than wheat.
Colter DeVries: 20:18
And Indian artifacts like arrowheads. So we’re going to bring up this story. I had a seller, who is just pumping his property to me, just telling me, you know, there used to be Indian battles out here. And, and, uh, you gotta, you gotta put that in your brochure. You got a feature that there, there’s been Indian battles. And I was like, well, going back to like, uh, antiques, antiques roadshow. Can you verify this? Can someone corroborate? Um, let’s look into it. Let’s have, you know, let’s, let’s provide proof rather than sell blue sky. Let’s not sell too much blue sky here. He’s like, well, that’s your job. You gotta look into it. You gotta find that out. He’s like, but what I, what I’m going to do is I’m going to come. I’m going to put a bunch of stones in a circle, teepee rings. We could do that. Right. And I was like, I’d rather you didn’t. Now that you told me, don’t do that now. Cause I’m not, we’re going to just drive by it, and someone’s going to see a bunch of stones in a circle. And I’m not going to put my reputation by saying, yeah, those are teepee rings.
Andy Rahn: 21:33
You know, it’s back to the old, what’s it called? The rent old, uh, Antiques Roadshow. I mean, that fantasy that whatever you pulled out of your attic or basement is going to be this home run. And don’t you think that’s basically the phenomenon that sellers in Montana have? Because there’s, you know, there have, even though the actual number of times that, you know, those kinds of, these home runs or whatever get hit are much lower than people actually think. Uh, but they get out, or they get, they get exaggerated. Um, but every seller, Thinks they’ve got a Thomas Jefferson. Um, and you just haven’t put enough ads in the Wall Street Journal is the problem as the broker.
Colter DeVries: 22:10
Another thing with that home run quote is that it is unquote. I think that that can be normalized or it can be it’s kind of a relative issue so when they think they’re hitting a home run if they go back and they do the compounded annual growth rate since they bought the ranch and say the forties or fifties or thirties, whenever, you know, whenever their great grandpa bought it, um, their compounded annual growth rate might turn out to be 5%.
Andy Rahn: 22:42
Right. Right.
Colter DeVries: 22:43
Over the many years. Um, it’s, it’s just a big boon in their lifetime, but over the long term, 5 percent, yeah, that’s, that’s, it exceeds the normal 3%, right?
Andy Rahn: 22:56
That doesn’t mean beating the equities market, though.
Colter DeVries: 22:58
Yeah. And that’s why I’m saying it can be normalized in the sense that this home run isn’t quite the home run you think it is. It’s actually within a reasonable range of time, value, and money adjusted.
Andy Rahn: 23:14
Well, and it reminds me, I’ve known of quite a few properties that, yeah, I had a really stubborn, obstinate seller. And, uh, generally, the market does eventually catch, you know, they might take ten years or, cause there, there’s, there’s properties on the market right now that have been on the, on the market for ten years and, you know, and then it happens, and the seller is like, see, I, I held out, and I, I got my price, but you look at the time value of money. And the opportunity costs that they foregoed, and that, and I’ve had this conversation trying to get sellers to be more, and, and it, it’s funny too, right? Because, you know, we’ve been in very favorable market conditions. You’re trying to convince them to sell in a favorable market condition for a good price. And they, you know, they want to fight with you. And then dink around for years till they finally get it sold. Um, but yeah, the, the lost opportunity they, they had at that time.
Colter DeVries: 24:05
Yep, which. Probably looks like a break even.
Andy Rahn: 24:10
Yeah. Yeah, absolutely.
Colter DeVries: 24:11
But in their minds, I held out, I held out strong, and I got what I asked for. Yeah. I can go to the coffee shop with my head held high and brag about, I got what I asked for.
Andy Rahn: 24:22
Yeah. Yeah. You know, I’m flashing back to the episode you had with Dallas, the owner of, um, uh, Ranching for Profit, and his comments. You guys were talking about, you know, A little bit bemoaning the loss of the multi-generational, you know, family operator, but he made a comment about how god awful inefficient some of those places are. And especially the ones that sell. And that, that actually really resonated with me. Um, and I think there’s something to do with that when it comes time to trade, too, right? Just, not, uh, I don’t know if efficient is the right word, but they’re not, they’re not approaching the, the sale of it, all that.
Colter DeVries: 25:04
Analytical. Yeah. I mean, yeah, the old generational operator running his ranch doesn’t use KPIs. They’re not doing balance sheet analysis, cash flow analysis, and, uh, when it comes to analyzing that asset, they’re not doing that either.
Andy Rahn: 25:23
You know what that reminds me of? There used to be, you ever, remember Phillips, uh, office supply on Main Street, Bozeman? Is that too old for you?
Colter DeVries: 25:31
I believe so.
Andy Rahn: 25:32
Yeah, it was this old, and it was, it, closed. Right. That was the news. I mean, I’d been there forever, downtown store. Right. And if, and I was somewhere having, you know, conversation about this and some guy says, you mean that place that’s been trying to go out of business for 20 years like you’d go, you’d go to buy a pencil there. And as likely as not, the eraser would be rock hard. Right. So it’s like, well, you bemoan whatever a local, you know, historical place, but it’s like, These, you know, these places got to, if they’re not efficient, if they’re not, you know, producing, um, food or fiber at an efficient rate, if they’re not supporting people on the place, you know, yeah.
Colter DeVries: 26:16
Well, why do we need to support lifestyles? Why is that noble? Why is there more inherent value to people having a lifestyle that they desire, that they choose, and that they want to pursue, voluntarily on their own accord?
Andy Rahn: 26:33
It is pretty sad when you show up in a place and the place is pretty beat to death. And now that I’m kind of thinking about this and talking about it, sometimes the people look a little bit beat to death.
Colter DeVries: 26:43
Yeah. for sure. Hey.
Andy Rahn: 26:45
I was kinda worn down and, and you know, it’s a.
Colter DeVries: 26:47
I can, I can attest to that. That’s, that’s personal.
Andy Rahn: 26:50
And I mean, we don’t want them all to trend. I mean, you know, we want to preserve culture. We want to preserve all that. But there’s got to be a middle. I mean, that’s why, um, the rent. What’s the outfit called? Ranch for Profit is stuff like that is so great. Like actually trying to help people potentially, you know, make a make it.
Colter DeVries: 27:12
Well, we’re getting into campaign season, and we have the number one Senate race in the United States.
Andy Rahn: 27:19
Is that right? Well, I guess that’s, it’s been, that race has been that way many times. I mean, going back to Tester and Burns, right? Didn’t Tester and Burns first break that?
Colter DeVries: 27:23
Well, and then Danes and the former governor, Bullock. Yeah. So, the Montana seat has always been viewed as a contested one to swing the Senate. Well, not always, but in the last 16 years, right?
Andy Rahn: 27:26
Right, right.
Colter DeVries: 27:27
Um, because they viewed Montana as a purple state which has been.
Andy Rahn: 27:30
Right, historically, yeah.
Colter DeVries: 27:32
And so now, um, you know, we’re gonna have the most funded Senate race in the nation.
Andy Rahn: 27:25
The highest-dollar Senate race.
Colter DeVries: 27:36
Which brings out all the Carhartt jackets.
Andy Rahn: 27:37
American flags, guns, Carhartt jackets.
Colter DeVries: 27:38
Cowboys, farmers.
Andy Rahn: 27:39
John Deere tractor.
Colter DeVries: 27:40
Yep. And, um, one, one of the issues that keeps coming up on, you know, both sides, they, they spin it, they pitch it how they want. Cause they want to be viewed as populist, right? Right. That they’re part of the good old boys. Yep. Yep. And, uh, it’s this idea of protecting the family farmer and, and, uh, supporting the family farmer. And I, I see a lot of this, and I’m like, you know, that that’s kind of bullshit to me because a lot of these, a lot of these people, that sounds, Elitist.
Andy Rahn: 28:54
With your decaf coffee over there.
Colter DeVries: 28:56
Yeah. There are people who are listening to this. We’re like, God, it’s culture or progressive in San Francisco.
Andy Rahn: 29:04
Which podcasts am I on?
Colter DeVries: 29:06
But they, one, they, they chose to be farmers and ranchers. And a lot of it is lifestyle. They’re not driven by KPIs. And, like you said, efficiencies and economies. Uh, and then two. They’re, what I’ve seen, um, from my network, my peers, and just my own experience being in it. A lot of these people, it’s a trait, it’s a skill set, uh, they’re good at that.
Andy Rahn: 29:35
You’re talking about politicians?
Colter DeVries: 29:37
Family farmers.
Andy Rahn: 29:38
Oh, family farmers. Yeah, yeah, yeah.
Colter DeVries: 29:39
Family farmers. And they’re, to me, I’m sitting here wondering, well, the rest of us. We have to be adaptable. We have to change. When, when our industry goes to shit, when my business goes to shit, I have to adapt. I have to find something else to do. I have to pick up a new skill, a new trade. Why don’t they?
Andy Rahn: 30:08
Oh, yeah. Well, it’s one of the most subsidized industries in the country. You know, ag.
Colter DeVries: 30:11
Yeah, right. Oh, yeah, absolutely.
Andy Rahn: 30:12
You know, you know, yeah, speaking of the political season and whatnot Well, and of course, one of the issues is foreign ownership of land, right?
Colter DeVries: 30:18
What a bullshit issue.
Andy Rahn: 30:19
We had the Chinese balloon, you know, and everything like that. I yeah, I feel like it’s trying to put the toothpaste back in a tube, and maybe, maybe you remember this or can correct me, didn’t, so, you know, we’ve been in desperate need of processing facilities. You know, we got really in this, uh, zone where we’re producing, you know, all these calves, the world’s best calves, and shipping them to other places to get processed. We lost all our processing, and there was a multimillion-dollar big cow. Processing unit proposed for Miles City. And it was Chinese money,
Colter DeVries: 30:49
JD. com
Andy Rahn: 30:50
And the Chinese, they came out and the stock growers were, we’re all about it. You know, now, all of a sudden foreign ownership is like this political issue, and everybody’s worked up about it. And you know.
Colter DeVries: 31:02
They keep running those ads. I’m going to stop China from buying us farmland.
Andy Rahn: 31:05
Well, and the toothpaste out of the tube for me is, I mean, we have a free market. We don’t, I mean, aside from like, you know, criminals or something, we don’t, uh, ask people where their money comes from. I mean, we take money, right? We have a free open market. Um, but now all of a sudden, you know, for political expediency, we want to, and, and, and we’re, and it’s a globalized society, globalized world.
Colter DeVries: 31:40
It’s a complete bullshit issue because, one, it’s not a problem. And number two, how are you going to limit the CCP from buying farmland? Without limiting everyone else.
Andy Rahn: 31:45
Well, you know who, um, I actually went to a presentation that MSU put on, on this, and you know who, what, what foreign, well, first of all, the biggest, you know, the mo the most foreign money is coming from Canada.
Colter DeVries: 31:55
Canada, the Ontario Teachers Pension Fund.
Andy Rahn: 31:57
Yeah. I mean, the amount of bad actors, China, Venezuela, Iran, South Korea, or North Korea, you know, is minimal. First of all, and you know what most of the foreign entities are buying is energy lands—land for wind leases and oil leases—and that’s the biggest target: energy.
Colter DeVries: 32:19
Yeah, why, why, why take ten million dollars of your sovereign wealth and turn it into seven? Yeah, no, it’s if I were still in there, like, well, The Chinese bought farmland near an Air Force Base in North Dakota, all right, okay. If I were the CCP with nefarious intentions, I wouldn’t just come out as the CCP and buy farmland. I would have a trust in Switzerland that owns an LLC in the Netherlands that owns an S Corp in Ireland, which is also part of a trust in the Cayman Islands, and that trust would buy the land.
Andy Rahn: 33:06
Maybe you need to open up a consulting firm for it.
Colter DeVries: 33:08
Uh, that sounds like, uh, oh, what the hell is it called when you sell out your own country?
Andy Rahn: 33:12
Traitorism?
Colter DeVries: 33:13
Well, yeah, traitor. But there’s a legitimate term for that.
Andy Rahn: 33:23
When you sell out? Turncoat? I don’t know.
Colter DeVries: 33:25
Benedict Arnold. I find that sedition?
Andy Rahn: 33:30
Uh, maybe. Yeah. I don’t know. I didn’t pay attention.
Colter DeVries: 33:32
I think it’s sedition.
Andy Rahn: 33:33
Yeah, that sounds right.
Colter DeVries: 33:34
Because, uh, the other word I often confuse it with is, uh, What the hell they try to call people like me on January, insurrectionists. To consult for the CCP on buying farmland, I’d be a seditionist, not not not an insurrectionist like I was in Washington on January 6th.
Andy Rahn: 34:03
Are they coming for you next?
Colter DeVries: 34:11
I’m gonna get a knock on the door. So, I did once say I try to keep this non political.
Andy Rahn: 34:14
See how that went.
Colter DeVries: 34:15
What else has been going on since you last came?
Andy Rahn: 34:19
You know, it’s funny. I feel like I got to tell a Bozeman story. I had a nice across-state road trip. I went to Butte. I went to Missoula. I have family in Missoula and, uh, you know, met with some folks out there and had a great time. Uh, felt like, uh, just like a second hometown out there. I mean, I did my freshman year out there. Like I said, have family out there and, you know, just had one of these trips where you just love Montana and open road and all that kind of stuff. But then I come back to Bozeman, and I’ll, you know, I’ll remind people I lived in Bozeman for about 17 years up till about six years ago. And I decided to check out the top of the armory, the nine-story.
Colter DeVries: 34:55
Yeah. Yeah. I went and had a drink up there. Yeah. I was going to have a drink at the armory, non-alcoholic of course.
Andy Rahn: 35:01
And, uh, You know, this whole trip being on the road, I hadn’t experienced one ounce of boredom or loneliness until I sat at the top of the armory and had an $18 old fashioned and, uh, was treated with almost complete, uh, disinterest and disdain from the uber hot bartender.
Colter DeVries: 35:18
Yeah, it’s. It’s a whole other culture, isn’t it?
Andy Rahn: 35:21
Yeah. And you know, like I said, I lived there for 17 years, you know, I think I’d have some, some, uh.
Colter DeVries: 35:26
Clout.
Andy Rahn: 35:30
Yeah. Do you know who I am?
Colter DeVries: 35:32
You need to go to the American Eagle for that.
Andy Rahn: 35:42
Yeah, it was funny. I was telling some friends, complaining to some friends about it and they were like, well, obviously, you went to the wrong place. The Hoff is still, still there for you, buddy. Well, it was funny because I stepped foot in The Rhino at Missoula and didn’t even tend to stop, didn’t even tend to have a drink and three hours later. I’m chatting up with the whole bar. Everybody knows somebody to know somebody Yeah, you know, classic old Montana.
Colter DeVries: 35:54
The Rhino was the bar. I went to and I went to school there in Missoula. Well, geez. So now we’re talking about these cultural differences coming to Montana. I did go to, uh, I stopped through Missoula the other day, too and went to a coffee shop where the coffee stirrers were pasta sticks, more sustainable.
Andy Rahn: 36:22
Oh yeah. Yeah.
Colter DeVries: 36:24
And then I went in the, in the bathroom, they had a list of local events and only in Missoula. In the men’s, or it wasn’t a men’s bathroom.
Andy Rahn: 36:29
It was women’s.
Colter DeVries: 36:30
Either.
Andy Rahn: 36:31
It was either.
Colter DeVries: 36:32
Either anything.
Andy Rahn: 36:33
Were you confused? Were you, was it.
Colter DeVries: 36:35
I was a little scared to go in, like, uh, am I going to look like a pedo if I get this wrong? What’s the answer here? I don’t know what these signs are. Um, But yeah, on the bathroom wall was an advertisement for West African dance classes in Missoula, Montana. And I was like, boy, that is very different from what I see in Ekalaka, Montana.
Andy Rahn: 37:01
Yeah. You know, I was, I spent quite a bit of time just walking around downtown Missoula cause I hadn’t been in a while, and I definitely saw some of the same Bozeman-type stuff, you know, high-end shops and shiny people and stuff. But you know, uh, I think I feel like Missoula is still putting up something of a fight. You know, it’s just, it’s the liberal for maybe people that don’t know how to state it’s, it’s where the liberal arts school is, University of Montana. So it’s always been the hippie capital of Montana, you know, for a long time. And, uh, social consciousness has been, or whatever, social justice, right? That’s been its deal. Uh, and I’ve been in Missoula. Like, I feel like it’s at least putting up a fight. It’s at least pushing back, whereas Bozeman is just completely.
Colter DeVries: 37:43
Folded.
Andy Rahn: 37:44
Tipped it. Yeah. Bozeman is just like, well in downtown Bozeman, which has often been celebrated as a great, you know, even historic, you know, down in Montana downtown. At this point, it’s almost all shopping and not for locals, you know, high-end shops and all this kind of stuff. I mean, there’s, there’s the holdout Ace Hardware and a couple of bars and stuff, but you know.
Colter DeVries: 38:03
And that whole, they are elitist, and wow, that was a broad generalization.
Andy Rahn: 38:11
That’s rich coming from an elitist.
Colter DeVries: 38:13
Well, and I was to say, who am I to cast a stone when I’m like, you guys aren’t Montanans, right? Bozeman is 20 miles from Montana. That sounds a little snobby and elitist.
Andy Rahn: 38:23
Well, you know, although, and I mean, this is honestly what pushed me out, I love Bozeman. probably at one point thought I might stay there forever. And I don’t think it’s a, it’s a characterization of the people that have moved in. I think it’s a factor of volume. It’s just been inundated, you know, you just community phrase. It’s just you just don’t rec ognize people on the street and all that kind of stuff. So it’s just, and I think with the exception of maybe Whitefish, you know, those two communities are the only, you know, our communities in Montana that are completely transformed. I mean, almost unrecognizable from what they were a generation ago. I’m saying about Missoula, it’s putting up, it’s still kind of trying, trying to navigate those waters of new types, a new level of wealth, you know, all that kind of stuff. But, uh, and you know, towns like Livingston and there’s a number of them, you know, but I think Bozeman and maybe Whitefish have just completely, they’re unrecognizable.
Colter DeVries: 39:19
Yeah, Bozeman did elect a young socialist mayor.
Andy Rahn: 39:22
Yeah, right.
Colter DeVries: 39:24
I mean, that’s pretty wild.
Andy Rahn: 39:25
Yeah. I mean, Bozeman used to be a cow tech town.
Colter DeVries: 39:29
Yeah. Yeah. It’s changing, but we, we’ve got to adapt.
Andy Rahn: 39:35
Right. Right. Right. But places like, you know, Billings has this just slow and steady growth rate that never changes no matter what, you know.
Colter DeVries: 39:47
Look at the amount of new units, homes, and shit going up in Billings and commercial, like, what are the new numbers? We’ve grown the population by probably 20 percent in the last five years.
Andy Rahn: 40:02
I don’t think it’s that high, but, but it’s huge. So I wanted to bring this up, uh, you know, talking about the land market and stuff and inventory, you know, it’s been speculated, uh, whether or not there might be. A secondary market, all the people that moved here in such a haste, um, you know, a couple winners. Of course, we haven’t had any brutal winners to speak of, but, you know, that, you know, making, coming with not with some haste, you know, is there going to be a fallout within a few years of people not being quite what they expected? And is that going to create a secondary market?
Colter DeVries: 40:45
Almost your attrition washout? Um, people I run into like at the gym, um, who moved here. Some of these are, uh, COVID refugees, and they love it. They love Billings, and they have no connection. It was a cold, A cold move is hard to sustain if you don’t have family or an employer, especially for a millennial with kids, like if you don’t have mom and dad around, grandma and grandpa, raising kids is pretty frickin hard. And so for some of these people, their cold move has lasted, and another one is like people in my daughter’s Montessori. Dude, they love it.
Andy Rahn: 41:31
Elitist. Liberal elite. That’s what’s going on here.
Colter DeVries: 41:36
Anti-public schools. They seem like they’re here to stay.
Andy Rahn: 41:44
Well, another demographic that I can speak to, and I’m kind of one of them, is, uh, people moving back home that never thought they would do that. Maybe here, you know, if you asked him 20 years ago, you know, they’d be like, Oh, Christ, no, you know. But, you know, it’s part of his age thing. I think that’s probably pretty natural. You know, as you get to a certain age, like, Oh, hometown doesn’t look so bad. And, you know, maybe, I’m talking as a Gen Xer, right? Older generation, parents are aging. Oh, got to be closer to Mom and Dad, who’s aging out. But I also think there’s a cultural change. And I think about even really small towns in Montana. I mean, every little town in Montana has a groovy coffee shop and a brewery. And, uh, you know what I mean? So like people that.
Colter DeVries: 42:29
When Harlow has a brewery, yeah.
Andy Rahn: 42:31
So especially small town, Montana, and people that were kind of like, I’m out of here type deal, never looking back then. And maybe they’ve gone somewhere and gotten beat up in the big city for a while. And they’re just like, you know, home doesn’t sound so bad. And there are cultural amenities that I was really missing. I mean, part of why I fled. But now, you know, the brewery has a guy strumming guitar every Friday and Saturday night in the corner. So it’s like, Oh, I got some.
Colter DeVries: 42:55
The map of, uh, sex offenders is, It’s far more sparsely populated, right?
Andy Rahn: 43:06
And I wasn’t so hardcore that I like, you know, I’ll never come back to Billings kind of thing. But, um, yeah, you know, and it’s like, this place looks pretty darn good. Yeah. Compared to a lot of other places.
Colter DeVries: 43:18
I’d noticed that, like, you know, about ten years ago when the boomers started retiring and moving back to the boomers who went off and made their careers elsewhere and then came back to, well, my home area, Carbon County. Like, I loved seeing that they came back and got on the museum board and the cemetery board, and one guy who we’re gonna have in the podcast, he like a PhD toxicologist. So he knows. statistics. He knows research very well. He has been testing Rock Creek and he’s put together a study that shows that all the development happening in the Rock Creek Valley with septic systems and drain fields is causing higher nitrogen levels in Rock Creek. And that’s all volunteer work on his own time. He’s a retired boomer, and like, dude, that’s what we need. We need talent like that coming back with time. And I love seeing that because, at the same time, you get these people on these boards for cattlemen and farm groups. And they’re like, Oh, you young people, you got to get involved. And it’s like, We got to raise some damn kids here. We got to establish our careers. You got it.
Andy Rahn: 44:33
We got to pay for your social security fund.
Colter DeVries: 44:35
Do you want to work till you’re 85? Right. Uh, no, you guys go to the community meetings and sit on those boards and committees and that shit, because we have, we’ve, we have constraints, right? So it’s good to see the boomers coming back and applying their talents in their time.
Andy Rahn: 44:56
You mentioning Rock Creek made me think of the floods a couple years ago and, uh, spent a fair amount of time on the river that summer, you know, after the floods were gone. And it was, it was amazing because the lower Yellowstone, which is usually pretty brown, was pretty clean, pretty clean, right? Flushed out, you know, except for the occasional, um, refrigerator or a washing machine floating by.
Colter DeVries: 45:19
See, and that’s why people love it here is because it’s a fridge and not a dead body.
Andy Rahn: 45:23
Yeah, that might be coming.
Colter DeVries: 45:36
Oh, well, 45 minutes in any, any, uh, any market analysis, some numbers, data, statistics to bring up.
Andy Rahn: 45:42
Let me see. Let me pull up, let me pull up this handy website, Montana Land Source. That’s got live market statistics. Yeah. I mean, you know, like I talked about earlier, just waiting for inventory to rebuild, but I mean, I mean, we’ve got 50 percent less new listings so far in 2024 than 2023.
Colter DeVries: 46:01
Wow. That’s a surprise.
Andy Rahn: 46:04
I know. Um, but I mean, inventory, well, I say creeping up. I guess that’s not really true. I mean, just barely. So, still seeing shorter days on the market. Um, the number of sales is slightly up from last year. Um, you know, I just think we’re, I just keep thinking, uh, I’ve been criticized for using this word recovery because most people think recovery is from a bad time, not from a good time, but as an appraiser, you know, I, I see extremes on either side is kind of the same. They’re, you know, they’re disruptive markets and unreal markets. So I’m not bothered by the term recovery, but I just get the sense that it’s kind of, uh, let things sort out, let the, let the.
Colter DeVries: 46:53
Take years. It’s going to take years to normalize back to 2019 activity levels and metrics.
Andy Rahn: 46:58
But, you know, there’s still, demand is still strong from what I hear from, from all the brokers. They all talk about, you know, having buyers that just haven’t found the right place and that kind of stuff. It’s all due to low inventory. Can’t find what you want.
Colter DeVries: 47:10
The salesmen are telling you that demand is strong. Yeah.
Andy Rahn: 47:15
Grain of salt.
Colter DeVries: 47:17
That’s like, uh, this, this other property I was working with on a buyer right now, actually. And again, we, on this other one, we’re at 50 percent, our evaluation versus asking price. We’re, we’re 50 percent from where, where they are at. And the listing agent keeps telling us, oh, he’s, he’s really motivated. He wants to sell this ranch. He’s got another one in mind. He, he wants to get moved to that other one. And I’m, I’m like, yeah, he’s motivated at his price.
Andy Rahn: 47:51
Yeah, exactly. Right. Exactly. Right.
Colter DeVries: 47:54
Aren’t we all.
Andy Rahn: 47:55
Well, you know, one thing I’ve always embraced as an appraiser, I love the concept. So like, when I write an appraisal, you know, I’m not, I am not an advocate. I’m not supposed to be an advocate. If anything, I’m an advocate for the market. And I’ve always, I’ve always liked that and wanted to lean in to that. So I think I always have some optimism when we get through extremes and kind of come back to normalcy that, that normal market factors will, um, but it’s always fleeting.
Colter DeVries: 48:21
Yeah. Well, if there’s one thing I kind of take from all of this is that, uh, I don’t think farm and ranch is knee jerk. It’s not volatile. Did it move a lot, as your data shows? Wasn’t a lot of people rushing to sell when times were good?
Andy Rahn: 48:38
Well, here’s an interesting, I’ve actually, this is reminding me, I’ve kind of been working on a blog along these lines. Um, again, just talking about the Montana land market, and one thing that occurred to me, the Montana land market, It’s so it’s a highly imperfect market. We talked about that earlier. Just, you know, it’s a nondisclosure state. There’s not a lot of price discovery. It’s not a commodity with similarity, you know, between products, but so it’s a highly imperfect market, but it is a very free market. Well, you know, when I got thinking about it, we had very little. We have very little outside influences. I mean, you know, there’s a little bit of government program for new, but I mean, almost none for like beginning farmers or something like that. Right. So, you know, when things do sell, when, when, when properties are bought, It is a free market. And some people want to dispute that or fuss with that. If it’s, you know, wealthy out of staters or conservation organizations or that kind of stuff, they, you know, but the reality is those are willing buyers, willing sellers. We actually have a very free market in Montana.
Colter DeVries: 49:49
Unless you’re the CCP.
Andy Rahn: 49:51
Colter DeVries.
Colter DeVries: 49:53
Um, Yeah, I don’t have any other thoughts. I don’t have any other thoughts about that.
Andy Rahn: 49:56
It’s kind of a quiet time. Yeah, quiet, quiet time in the market.
Colter DeVries: 50:02
I would, I think it’s just tough to get anything done because of the bid-ask spread. It’s too wide. There’s, there’s, and there’s no reason for sellers to sober up. They don’t have to sell. There, there’s no high debt. There’s no liquidity crisis, right? They’ve been on it for 30 years. They know that there’s no reason to.
Andy Rahn: 50:24
Montana land sellers are remarkably strong. I mean they, they tend to be I mean, occasionally you see families that are, you know. It’s pretty rare, actually, I mean, they usually pretty well wait this sucker out as needed. You know, whatever it takes.
Colter DeVries: 50:39
Yeah, and I don’t I don’t see that changing. Like I said, I think a lot of these places I’m looking at with these buyers, um, I’m, I’m about 40 percent off in my CMA from where they’re asking. And, it’s just hard to bridge that gap, and it probably won’t get bridged. These deals won’t get done.
Andy Rahn: 50:58
I got a call the other day about the market and I was kind of talking about all the, I don’t want to say negative factors, but just the, the things we’re talking about that, you know, inventories down and volume. I was telling the story volumes way down and, you know, all this kind of stuff. And And he says, oh, great. That means that means there are deals to be had. I busted out laughing a little bit. Well, it was just interesting because as I rewound what I just been saying in any other context, that would be the natural conclusion. Like, Oh, you know, clearly, you know, in a, in a, in a, in a more normal, more rational, more functioning market, that would be the result. But we just, our market does not play by the same rules.
Colter DeVries: 51:42
I’ve got all these watermelons that are about to, about to go rotten.
Andy Rahn: 51:50
Right, right. Yeah. Yeah, that’s a durable product. I guess that’s part of our issue too.
Colter DeVries: 51:54
Yep. Well, thanks for coming on.
Andy Rahn: 51:56
Yeah, it’s been good. It’s good to be back here. Thanks for inviting me.
Colter DeVries: 51:58
You’re on Montana Land Source.
Andy Rahn: 52:00
Yep. Check out mtlandsource.com live market stats, and every listing on the market, 200 acres and up, is mapped and available on our map app.
Colter DeVries: 52:09
Thanks for tuning into the Ranch Investor Podcast.
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