Monthly Archives: July 2008

July 23, 2008 · 7:52 am

Financing Your Real Estate Investment Property In Kansas City

Financing your real estate investments is getting more and more interesting here in the Kansas City area and throughout much of the country. Much more interesting. Wachovia lending just shut down. IndyMac Bank is gone. And the bloodletting continues.

The good news? You can still get financed. Countrywide Home Loans and Wells Fargo do not appear to be going anywhere. And I still say the single best source for income propeprty loans is your local bank. You know, the one that only has 2-10 branches. Based in your home town. That sort of thing.

Because with Fannie Mae and Freddie Mac’s new 4 limit you might occasionally need a loan through portfolio. (In case you didn’t know, Fannie and Freddie say you can only have 4 real estate properties with outstanding mortgages now. This is down from 10. A significant difference that really hurts the part-time real estate investor…the bulk of my clients.)

Investment property loans are still available. But you’ll need 10% down as a minimum in today’s environment for single family homes and duplexes. Fourplexes and above will require a minimum of 20% down and maybe as much as 25%. If you know of a lender with loan product for fourplexes still available at 10%, let me know.

As a professional real estate agent working with real estate investors each and every day (save Sundays 🙂 ) I keep in touch with and up to date with several quality lenders in and around Kansas City. Let me know if I can recommend a lender to you today. And if your pre-qualification letter is greater than 60 days old you’ll want to get it re-run through. Trust me.

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Filed under Financing Options

July 21, 2008 · 6:44 am

Cash Flow Hunting: It’s Officially A Trend

My phone rings quite a bit. That’s a good thing. And Cash Flow is the number one topic for most real estate investors calling me lately. I’ve written before how Cash Flow Before Taxes is one of the Four Benefits of Real Estate Investing. I’ve also written about why you may not wish to worry too much about Cash on Cash returns if you are looking to really get your money working for you.

I am a real estate investment consultant. I advise. It’s what I do. But I am also a real estate agent. I sell homes. It’s how I’m paid. So unless people are too far outside the scope of my core beliefs when it comes to real estate investing I help them meet their goals…after at least having a say in what I think. But make no mistake, if cash flow is what you are after I will help you find the best rental properties for that purpose that I can.

Now I do draw a line. I don’t work with rental properties priced below $30,000. I just won’t as a general rule. Because these houses are typically in neighborhoods where I don’t see any kind of long term growth. (I have sold properties under $30K. They just weren’t in neighborhoods I don’t like.) I don’t advise working in certain neighborhoods where retention of tenants is low and where there is a history of roller coaster appreciation/depreciation. How can that be to your advantage unless you think you can time the market? (That hasn’t worked out too well with many, many people.)

I still believe you want to look at an investment property in it’s entirety.

What are the long term capital growth projections with all 4 Benefits calculated?
What does the cash flow look like when all expenses are calculated/projected?
Is this neighborhood on the upswing or is it slipping?
Nearby jobs, development and schools matter.

If you are looking at Cash Flow as your major driver for your next investment property go ahead and give me a call today at 913.322.7515. I’ve identified a couple of good neighborhoods that stand up to the four bullet points listed.

Radon Gas In Your Kansas City Rental Property: Upcoming Workshop

Radon gas in Kansas City is a problem. But how much of a problem? What are the real health risks versus myth? What are your liabilities concerning radon gas and your Kansas City rental property?

Radon gas is tricky. It can also be scary and highly misunderstood. Real estate agents are aware of it but seldom do we really understand what it can do to you over the long term. All we really know is that it can throw a wrench into inspections at the last minute, which nobody likes.

A real estate agent down in Charlotte, North Carolina wrote on Radon Gas last November. And here is a helpful website from the Kansas State Engineering Extension breaking down radon gas in a more text-book sort of way. I’ll let you go off and read those now. But when you come back we’ll discuss a free workshop being sponsored by KCRAR (Kansas City Regional Association of Realtors) for investment property owners, real estate agents and property managers that you may wish to attend. Look below the photo!!! And by the way, my house recently came in at 3.3. You’ll have to come to the workshop or read the second website to know if that’s good or bad. 🙂

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Radon & Rental Housing Workshop
Friday August 8, 2008 9:00 am – Noon

Targeted to rental housing owners, managers, inspectors, housing agencies, real estate agents and others in the rental housing industry, this seminar will provide information and resources necessary to deal with radon in their holdings in a cost-effective and efficient manner.

Radon basics, testing processes, reduction methods, risks and liability issues will be covered in this 3-hour seminar, with handouts and a free radon test provided for the first 25 people through the door.

Come hear from the experts at Kansas State University’s engineering extension office. This is not the same Continuing Education class they regularly teach at KCRAR, because this one is especially for landlords and those who work with rental properties.

THIS IS NOT FOR CE!Questions? Contact Jan Pringle, KCRAR Education Director, (913) 498-1100, or janp@kcrar.com.

ATTENTION: Jan Pringle of KCRAR just sent me this so be sure to register! I just did.

Wow! That’s great. What a nice website, too!

Just one thing, would you please put in your article that KCRAR members can register online there at www.KCRAR.com, but NON-KCRAR MEMBERS must email me to reserve a seat??? We have limited seating and I have to keep ahead count.

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Filed under Investment Property, Legal Issues, Misc. Real Estate

July 15, 2008 · 7:19 pm

Pickens Plan: A Step In The Right Direction

I am not a tree-hugger. But I recognize our impact on the Earth. I am not an isolationist. But I get tired of sending United States money overseas to be turned against us. I am not a homer. But I would like to see more jobs stay in rural America. Over my lifetime I have witnessed first hand medium sized to small towns in Kansas and Missouri whither. Some are almost dead.

T. Boone Pickens has a plan. He’s a billionaire oilman from Oklahoma. There’s no doubt in my mind he has an angle here that will allow him to make millions more. (Too bad. Because he gives too much money to Oklahoma State University. 🙂 )

Take the time to read the plan. Let me know your thoughts. Because in my mind the greatest sin of omission committed by Bush, Clinton and now Bush is having no plan at all.

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Filed under Worth Reading

July 15, 2008 · 8:03 am

Olathe, Overland Park & Shawnee, Kansas Rank High In CNN/Money’s Best Places To Live 2008

I’ve written here in the past about how high Overland Park and Olathe, Kansas rank in CNN/Money’s Best Places To Live 2007 and before. Now the 2008 Best Places To Liveis out and Olathe, Overland Park and Shawnee, Kansas are all on the list along with Lee’s Summit, Missouri.

# 9 Overland Park, Kansas
#11 Olathe, Kansas
#39 Shawnee, Kansas
#79 Lee’s Summit, Missouri

As a professional real estate agent in the Kansas Cityarea I have helped people buy homes and investment properties in each of these cities. I can tell you without a doubt that I can recommend each. I live in Olathe. I grew up in Overland Park. And Shawnee is just a stone’s throw away.

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Filed under City Comparisons, Kansas City Real Estate, Olathe

July 14, 2008 · 7:12 am

Kansas City’s Mixed Bag Of News

I’ve written before how hopeful I was that the Bombardier Aircraft company would locate it’s new manufacturing facility up by our Kansas City International Airport. Looks like it’s not going to happen. Couple that with Anheuser-Bush leaving for Belgium (in a manner of speaking) and it wasn’t a very good day for the entire State of Missouri. How do you say “This Buds for you” in Belgian? I do like Bud Light and Bud. Though I usually prefer Boulevard Brewing out of KC.

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The Kansas City Royals are not the worst! The Kansas City Royals are not the worst! Hey, 1985 was a very long time ago. So I take my victories where I can find them. Do you want to know who the worst teams are? Seattle (37 wins), Cleveland (41), Washington (36), San Francisco (40), Colorado (39) and San Diego (37). Heck, we’d only be 4 games back out of first in the NL West. What is the NL West, a minor league division? Wasn’t there some bawldguy predicting a World Series from sunny San Diego? Bwaaahahahahahahahaha. (Is that enough taunting?) 🙂

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Olathe, Kansas is officially the 24th fastest growing community in America. Apparently we’re great as far as heart-attack help, too. Good thing with all of our fast-food restaurants.

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Filed under Kansas City, Kansas City Sports, Olathe

July 13, 2008 · 9:43 pm

Fasten Your Seat Belts – Bumpy Air Ahead

The real estate market just got more interesting. The stock market is in for sure turmoil Monday through Friday of next week. What am I talking about? Well, buckle your seat belts, it’s about to get bumpy.

On Friday IndyMac Bank, for all practical purposes, shut down by the Feds. It will re-emerge Fed run. But, boy… Keep in mind that IndyMac Bank was at one point in time the second or third largest writer of mortgages in the country. And not too long ago!

What will this mean to you and me? Well one thing it well definitely mean is that the stock market is in for a wild ride on anything financial on Monday. I’m going to refuse to check out what few stocks I have. I just really don’t want to know. Now, before you accuse me of burying my head in the sand and/or having a Pollyanna attitude you need to know that I am 43 years old. There is plenty of time for my blue chip stocks to bounce back. Besides, I don’t have that much in the market anyway. Mostly in houses.

As for your and my real estate investment properties I’m gonna urge you to read Friday’s post about Buy & Hold Real Estate Investing and keep the big picture clearly in focus. If you bought on proper economic fundamentals for your rental properties you should be more than able to hunker down and survive through this next 6 months to two years.

And if you still have cash on hand beyond your reserves I really want to urge you to make a plan to buy and possibly buy again in this next 6 months. People are feeling panicky. Some are worried values will continue to slide. And they may very well. Though I suspect you can buy smart enough to cover any possible dips and really set yourself up nicely for the long haul.

Of course much of this depends on your age, earnings, savings and overall investment plan. So make sure you talk to your professional. If you don’t have one, contact me today so we can find out what is best for you.

2 Comments

Filed under Personal Real Estate Opinions, Real Estate Investing