Why Alaska Real Estate Is the Most Underrated Cash Flow Market in the U.S. (Investor Breakdown)

Nic Williams (00:00)
Yeah. So if you don’t listen to any part of this podcast, I think the next 10 minutes is going to be very fruitful and should probably stay tuned in. this is the hidden gem. the rest of the lower 48 right now, which is what we call the continental United States, is a buyer’s market. There’s inventory sitting there. It’s taking a while for houses to sell, and you can get some deals right now in the market. I think the deals are here in Alaska.

Michelle Kesil (01:54)
Hey everybody, welcome to the Real Estate Pros Podcast. I’m your host, Michelle Kesil. Today I’m joined by somebody I’m looking forward to chatting with, Nic Williams, who is the owner of the Real Estate Collective and the creator of the Alaskan Realtor brand. He focuses on military relocation as well as teaching people how to make the most money from real estate. So really excited to have you on the show today, Nic.

Nic Williams (02:22)
For having me. I’m really honored to be here.

Michelle Kesil (02:24)
Great, let’s dive in. So first off, for those new to your work, can you share what your main focus is?

Nic Williams (02:31)
Yeah. So ⁓ I’m a real estate broker, real estate agent here in Fairbanks, Alaska. if you want to know where we’re at, throw a dart at the middle of Alaska and you’re probably gonna land pretty close to us. ⁓ so we’re landlocked, middle of the state. ⁓ small community doesn’t mean that we have a small real estate market here. Lots of opportunity, especially if you’re educated on what we do here. So that’s really what I feel like my calling is is ⁓ taking this little secret gym that’s in the middle of nowhere and telling people how to.

Survive for one and then make money off of real estate is my second objective.

Michelle Kesil (03:00)
Awesome. And how did you get into real estate?

Nic Williams (03:03)
This is the awkward one. I met a beautiful woman in 2016 that sold me my first house. I was still in the army at the time. fast forward almost 11 years now, and she is my fiance. She is my business partner, if you will, and my life partner for forever. So yeah, she got me into it. She’s been doing real estate for almost 20 years now. Jules Addison is an amazing person and taught me everything that I know. So

Now she’s kind of passing the torch on to me. She’s kind of, you know, steady eddy taking on the work that she wants. And it’s my job to kind of grow the company a little bit.

Michelle Kesil (03:33)
Amazing. And what do you feel have been some of the main keys that allowed your business to be able to grow and run successfully?

Nic Williams (03:41)
Yeah. So first off I would say I gotta give Jewel more credit. ⁓ it really is having a partner day and night that I can talk to that can help me figure out these things that we go through with payroll and hiring and advertising and branding and all the things that come along with running a real estate business. secondly, my background in the military is probably undeniably the number one thing that has set me up for success. ⁓ I wish I could take some credit for it, but I was just beaten with work ethic since I was

small child, which sounds weird saying beaten, but you I mean like work ethic was drilled into me from my dad raising me playing sports and always had to win and be the best and go do all the things. then I went to college and started competing against other grown men in individual sports because I got out of baseball, football, got into mixed martial arts, combative sports, wrestling, military activities. And so just fueled that competitive nature in me. And then now that we’re in real estate, same thing.

I don’t see my success as how I do versus other realtors. I I look at my success on how my clients talk about me. right now my former brokerage is prospecting my leads because I left their company. They’re getting told by my clients, no, thank you. I’m not interested. I didn’t hire a company. I hired that agent that is now over here. Right. So that was like it meant a lot. It felt good. my reviews on Google. I have more individual Nic Williams Google reviews than most companies have here in this town. I just really focus on my clients.

And that is what I think sets me apart and really just helps make this fun, keep it fun, keep me energized, stuff like that.

Michelle Kesil (05:57)
Amazing. And how did you get into investing and how does that piece of your business coincide with everything?

Nic Williams (06:04)
Is this an explicit podcast? I’m tired of being broke, right? So I got into real estate because I had to get of the army. I was getting paid the army structured salary. And it’s not all about money, but let’s be real, money drives the world, right? And so what I noticed is I was working more hours than everybody else. I was getting higher accolades than everybody else. But since they’re married and they have dependents and kids, they’re getting paid more than me. And that’s where the army didn’t feel fair to me anymore. I feel like I was being used and abused a little bit, and plus my body was slowly failing me.

Michelle Kesil (06:08)
I think so.

Nic Williams (06:33)
I’m a disabled vet, got chronic pain from head to toe. But essentially I wanted to keep helping people. Like I felt like I was doing the military. I know army and helping people doesn’t sound right, but if you listen to the way they brainwashed us over the decades, it really is we felt like we’re doing you know what our country needs us to do. in real estate now I get to help individuals. So I’m not helping the country, I’m not helping the state of Alaska. but I get to help individual people every day. And I found that more rewarding and fulfilling because

You get to see the receipts, right? Like a family is now living in a home that loves it. That’s a lot better than saying, Hey, you’ve saved our country from an invisible enemy that nobody really knows. so it really just stoked a little fire in me. and I just I don’t want to let off the gas pedal until something makes me. And that’s that’s that’s that’s the real secret. I I don’t have kids per se. I got a stepdaughter that’s 23 years old that works in our business with us. but I have no real distractions. I get to work as much or as little as I want. And so

I think that’s what sets me above some of my competition and other brokerages here in town is just I have more time available to give to my clients.

Michelle Kesil (07:31)
Yeah, absolutely. And how is the market in Alaska? Like if an investor is listening to this and has never considered investing in Alaska, like how do you think that they should go about it or what’s your advice there?

Nic Williams (07:48)
Yeah. So if you don’t listen to any part of this podcast, I think the next 10 minutes is going to be very fruitful and should probably stay tuned in. this is the hidden gym. the rest of the lower 48 right now, which is what we call the continental United States, is a buyer’s market. There’s inventory sitting there. It’s taking a while for houses to sell, and you can get some deals right now in the market. I think the deals are here in Alaska.

The problem is they’re not discounted deals, meaning sticker price is probably what you’re gonna pay summer season here.

And Alaska is a very predictable market. and that’s why I like it here. That’s why I invest here and I encourage other people to invest here. there are some downsides, I’ll cover those in a moment too. But the main upsides here is one, we have very loose rules. for example, the Fairbanks North Star Borough didn’t incorporate building code, they haven’t adopted building code yet. So I can sell you an acre of land. Tomorrow you can go build a house on it, and a year from now I can sell it. No building inspections, no permits, none of that stuff.

The exception is 99701, our downtown area, recently adopted building code. And so there’s a lot of changes going on through that. But the rest of the borough where majority of our population lives, it’s the Wild West out here still. So it’s easy to get into properties, but you also need to know this on both sides because you know buying a non conforming property means it’s unconforming to either zoning or building code or something else. And that could be issues for you know insurance or something else like that. overall, though, in the market here, those sell and resell.

quite often. I got like four multifamily properties on the market right now that are on non-conforming. One’s a triplex and a duplex zoning area. The city doesn’t care, but your bank might, that kind of stuff. one of the downsides, just to kind of jump back and forth constantly, is utility costs. So something that we pay for up here as landlords that in the lower 48 you normally don’t pay for is heating oil. It’s basically a cheap diesel that we heat our houses off of. Our houses have gas tanks next to them, just like your car does. And that’s what heats your house. We have delivery companies that bring the fuel.

So that’s one more utility that my early investors, before they really start working with me, aren’t aware yet. And that changes your numbers dramatically. the good thing is rents are on the rise right now. They’ve been pretty flat over the last three years. And this year we’re seeing a lot of rent increases. So I would say most properties that are on the market right now are underrented, meaning too too low a rent for what it should be. we have a waiting list with one of our grant companies here in town called Fairbanks Neighborhood Housing. And they basically have over a hundred people on efficiency apartments.

One bedroom and two bedroom waiting lists. So there should be no vacancies in this town because if you have a problem with filling your units, you call them and they have a waiting list of over 100 people for each one of those segments. what makes our market so stable here is the military. So every three years a new soldier shows up, and every three years a soldier leaves. So that gives us a very stable market because these we just don’t have enough housing. I work with three out of the five builders that I know are building new houses right now. We’re building six homes this year.

Total, I’d say probably 10 to 12. We have a population increase of about 5,000 people projected in this town of about 100,000 people in an area the size of Massachusetts. That’s the Fairbanks North Star Borough. So again, everything in Alaska is just so much bigger and more spread out. but that population increase is going to cause some housing crisis, which we think is going to make the price of the homes go up, make the rental prices go up, and just make it generally more difficult to get into a property.

you’re seeing massive expansion on Isleson Air Force Base and Fort Wainwright, which sit kind of both here in Fairbanks, and they’re about 20% of our population. That’s soon gonna be bumped up to about 25% of our population with that population increase that we’re talking about. So what we’re seeing here is if we have builders, investors, flippers, buy and hold long-term multifamily investors, they’re all doing pretty well right now.

The one thing that has been on the decline is short-term rentals. And that’s because of the general consensus of government regulation, but also things like profitability. we have few companies that manage here. Most people that invest in short-term rentals here don’t actually live here. And so the biggest problem is finding the cleaners, the maintenance guys, and the management team to really run your short-term rental. And I had a company we closed down about a year ago just because the juice wasn’t worth the squeeze.

But we still two really good companies here in town, 907 Vacation Rentals and Dream B that are just doing phenomenal and managing, you know, 30% of the entire market, which is pretty incrazy if you think about it. A lot of tourism here. Yeah. I mean, we got summer tourism, a lot of Europeans, winter tourism is a lot of Asians, Northern Lights is our main attraction, and the outdoors. So this is not your come watch a football game and listen to a country music concert place. This is definitely like

Go hunting, fishing, camping, hiking, view the midnight sun in the summer and the northern lights in the winter, experience our extreme weather changes, that kind of stuff. So we get a lot of people that come up here and fall in love with this place and always think about investing here, but because it’s so far away and it’s so cold, they think it’s just not obtainable. And I think it’s a hidden secret in the investor world that people just don’t know about yet. Keep in mind, I said $35 billion coming into Alaska over the next three years as soon as we pass this pipeline project.

And everything’s ready to go. I already got a client that’s building a couple million dollars worth of main camps all up and down the highway. I already have a few neighbors that work at the pipe fitting company here in town, and literally the pipe yard is full of piping. So like Alaska’s ready to go. We just need the government to back us.

Michelle Kesil (13:30)
Yeah, amazing. And would you say would you say that most of the investors that you work with are local to Alaska or out of state? How does that blend work?

Nic Williams (13:42)
I would say 33% across the board is local people that invest. And that’s your owner occupiers. That’s your people that have their family home and want to buy some investment properties for passive income, that kind of stuff. Another 33% are going to be out of state investors. And those are just people in the lower 48 that find our secrets and come up here and try to exploit them. And we welcome that, right? Any investment alask is a good one.

The last thirty-three percent are a hybrid of those two. People that are from here, maybe lived here for a couple of years, maybe acquired a property or is interested in acquiring a property, but no longer live here. So they kind of fall in both categories where they are, you know, homebred and raised here, but then, you know, left for warmer weather, better financial opportunities, whatever, but still want to stay close to this area in some way, shape, or form with their investment.

Michelle Kesil (15:08)
And what do you think are the biggest opportunities within Alaska that an investor could have?

Nic Williams (15:15)
Well, right now I think it’s fix and flip, even though that’s probably our smallest segment. So we have a lot of older homes from the pipeline eras, the mid seventies, early eighties. and they’ve just been run down and they’ve been run down for one reason, one reason only. We have a transient population. We always have people coming and going. Alaska’s a dream, and then you live here and you’re like, that’s actually a little bit tougher than I thought, and leave, and then you come back because you realize that you love this place so much more than lower forty eight. I’m one of them. I’ve I’ve I’ve been back and forth a few times myself.

So because of that, I think that’s really the main reason why we’re seeing investors buying multifamily properties is passive cash flow, love for the area, and then just knowing that there’s not a lot of competition up here. It feels like it if you’re here and you’re only like looking at our market, but you’re competing against normal guys like me that are going to get a commercial loan to buy a sixplex.

We don’t have a lot of, you know, I’d say the three and four plexes are somewhat competitive, maybe not since the Iran war and the interest rates got a little bit high. but definitely as a whole, great market to invest in. There are some downsides like heating oil and then you know, construction quality in some areas, but that’s why we do everything we do in a purchase, home inspection quality, title report for legal ownership, and then appraisal for value to make sure we don’t overpay for these things. So overall, I don’t know of a single

multifamily investor that I had that didn’t cash flow and had a successful project.

Michelle Kesil (16:37)
And you are an investor yourself, correct?

Nic Williams (16:39)
I am. Yeah. I own multifamily properties. I’ve managed my own Airbnbs. I own Airbnbs. I’ve sold some Airbnbs. I’ve done assumptions with some of my clients that were in harder positions. so one of the things we talked about earlier, but I I definitely like brag about all the time is I try not to do anything I haven’t done before. I kind of want to blaze the path for you, figure out the kinks with my own deals, and then teach my clients the shortcuts that I created.

So yes, I’ve bought multifamily, single family. the only thing I really haven’t gotten into is fix and flips, and that’s because I don’t have the time or the skills to do it myself. Going back to the fix and flips, and why I think they’re one of the biggest opportunities here in town, Fairbanks Neighborhood Housing, if it’s a a blighted property, is willing to give you up to $50,000 non-reimbursable grant to fix up properties. So that’s why I think that market is untapped because there’s free money available here locally to fix properties. All you got to do is buy it, put down your down payment, get the grant.

The grant pays for the remodel. Now you’re cash flowing. There’s one red string attached to that grant. You have to let them rent out your house for five years, but their market rents are higher than the market’s rents because they’re based off a HUD. So they’re guaranteeing you occupancy for five years at above market rate rents. I think that is a great deal. Some people think that is red tape because you kind of can’t really sell your property for that five year period. But that’s the reason for the grant.

Right. So it’s a buy and hold strategy. I’m calling it fix and flip, but it’s more like fix and rent, fix and hold.

Michelle Kesil (18:00)
Yeah, that’s interesting. And what are some of the biggest lessons that you’ve learned as an investor?

Nic Williams (18:05)
Never think a deal is done until the deal is done. Things come out of the right field all the time that kill deals. And I have some really humble clients and I have some really cocky clients. And they all kind of learn the lesson, no matter what their attitude is, is the deal ain’t done until it’s done. lots of hurdles from insurance quotes, home inspection, repair negotiations, clearing title. We had two land deals in this last week just died because the estate paperwork wasn’t signed properly.

because we’re still the Wild West, it the realtors here do a little bit more than everywhere else. And so something to think about, like in the lower 48, generally your home inspector and your realtor don’t go to the home inspection together, right? the home inspector does. your home realtor isn’t meeting the appraiser at the property, you’re not getting as many video showings as we do up here because a lot of our clients are side and scene. So, like our job here is completely different. If you’re a real estate agent listening to this,

Like what I do here and what you do in Kansas City is completely different. there’s no shade, there’s no better or worse. In fact, I wish we could do less and just send these guys out. But the way our MLS is structured, basically realtors are babysitters for every third party that has to enter the house. So there’s a lot more time being consumed that way. makes things a little bit different, a little bit harder.

Michelle Kesil (19:15)
Yeah, absolutely. And what do you want investors to know and understand about investing in Alaska?

Nic Williams (19:27)
So the number one thing that everybody should keep in mind when it comes to Alaska is that we have zero income taxes for the state. You still got federal stuff. Can’t ever fight with the IRS. But the state of Alaska is not going to take any of your money. In fact, if you live here as a resident that has an investment property, then in fact, investment property doesn’t matter. If you live here as a resident, you get something called the PFD. Now every year they take a lot of that money away for government spending, but it’s about $1,000 a year that the state pays you to live here. think of it like a reimbursement of your property taxes, because that’s the only tax that we pay here.

so landlords, owners are the only ones really paying taxes in the state of Alaska other than corporations. so I guess for some people that’s a reason to rent. however, tenants, I’m sorry to tell you, you’re paying my mortgage, my insurances and taxes are wrapped up into my mortgage, so you’re still paying my property taxes. That is the number one thing. only two or three other states can compete with that. Wyoming, Texas, Florida. other reasons why I think people need to invest in Alaska is we just need

The funding. Make one property better, the next property is going to be encouraged to be better. And then everybody else is going to be encouraged to make their properties better too. It would be very easy to have the best house on the market here, the best rental property on the market here, because it doesn’t take a lot of effort. while we have a lot of landlords, we have a lot of slum lords here too. And so I personal mission here is

Sell the slumlord’s properties to a real landlord, have them invest a little bit of capital to reimprove the properties, raise the rents, make money off those properties, refinance some cash out, and then we have better properties for people to live in and for me to later on resell. That’s really the goal with the multifamily. I want to improve fair banks. This is my way of giving back through capitalism, which is I sell your property, you do the capital improvements, and now the entire town has a prettier town. we are the end of the highway up here. Literally.

I think we’re the northernmost sta city in Alaska. You got some villages and Ukonavik and Nome and Barrow and all these other places that still count as cities because they’re incorporated. But like if you think city, Fairbanks is the northernmost city in the world. okay, let me backtrack in the US. and so I think that’s cool. I think we need to brag on that. I think we need to pull some investments further north. You’re seeing everything kind of heading south towards the equator, right? Florida, Texas, Arizona, California is always a hot market.

Even though politics there for landlords suck. the second biggest thing in Alaska that’s really great is our landlord tenant X. In fact, you can Google Alaska Landlord Tenant Act. It’s a 65-page PDF that lines out everything you need to know about pet deposits and landlord entitlements and squatters’ rights. for example, California, I think it’s 30 days and you go up ownership in a property. Here in the state of Alaska, it’s seven years. I can drag you out by your hair if you breach my lease or contract. Like the cops aren’t gonna blink an eye. So

very landlord friendly state, which is great for investors. There’s not many left.

Michelle Kesil (22:09)
Yeah, absolutely. Thank you so much for sharing all of that.

Before we wrap up here, if someone wants to reach out, connect and learn more, where can people find you?

Nic Williams (22:18)
Yeah, so the easiest way is my cell phone number or my email address. If you go to any of my Facebook, Instagram, social media accounts, it’s all over the place. I’m probably sharing my cell phone number way too much, which is why I get a lot of spam calls. my website, nicwilliamsrealtor.com. Realtor does not have an I in it. Nic does not have a K in it. but you can Google me. It should pop up pretty much everywhere. and if you can’t remember my name or my face, just type in the Alaskan Realtor.

it’s the brand I’ve been building over the last seven years. it’s stuck with me. I love it. feels like my little alter ego, my my Captain America alter ego, if you will. And so easy to Google. That’s what all my handles are on all my pages. And super easy to find the Alaskan realtor. And I do commercial, I do land, I do residential, I do multifamily investing. I do a little bit of everything here. so if you have any questions about anything other than just like if you want to invest in land, we got 500 listings right now.

Residential homes, we have about 125 across the entire market. Multifamily listings is about twenty. so they’re a little bit more scarce, but because of the interest rates are taking a little longer to sell. but yeah, if you ever want a consultation, you ever want to set up a conversation, I’m always available to talk.

Michelle Kesil (23:21)
Perfect. Appreciate your time and your story. Thank you for being here.

Nic Williams (23:25)
For having me. Really appreciate it.

Michelle Kesil (23:26)
And for the listeners tuning in, if you got value, make sure you’ve subscribed. We’ve got more conversations with operators like Nic who are building real businesses. And we’ll see you on the next episode.