Category Archives: Kansas City neighborhoods

July 22, 2014 · 1:40 pm

Kansas or Missouri? Where to Invest

Kansas City is a wildly diversified city, economically speaking. I have written in the past about the differences between Kansas and Missouri. And it’s worth the read if you are not familiar with the area. But time and time again I need to let out of state investors know that there is and should be an expectations difference when it comes to investing in real estate in either Kansas City, Missouri and it’s Missouri suburbs or the suburbs on the Kansas side.

Missouri real estate investors should expect slightly lower entry points, price wise, for the comparable properties on the Kansas side as well as a little higher cash flow, cash on cash returns, etc. But appreciation on the MO side usually lags behind the Kansas side.

The Kansas side usually has a little higher prices and the returns are slightly lower on the cash flow side. But in general, it is EXPECTED that you’ll have great appreciable growth as time goes on.

Why?

School districts. The Kansas side has the better schools, by in large. Especially in Johnson County, Kansas. Lee’s Summit and Blue Springs on the Missouri side are pretty darned good, too, and therefore their prices are a little higher and returns a little lower when you compare them to other Kansas City, MO suburbs.

It’s really very complicated to select the right areas for your Kansas City investment property. So much goes in to picking the right rental house;

What return do you expect?
What kind of house (multi family, single family, ranch, etc) do you want?
What kind of tenant are you after?
What price point are you looking to be in?
Cash flow or appreciation? A mix of both?

I could go on and on. Just make sure you understand the pluses and minuses of each side of the state line. Both are great states. You just need to know what you are getting in to and where you are getting in to it. 🙂

Kansas City Loft Search

kansas-city-loft I spent Saturday looking at lofts in downtown Kansas City. Not as investment property but as corporate housing. See, there is a Chicago based business with a branch here in Kansas City that is spending too much on hotel bills. So why not go ahead and buy a loft?

As investment properties the loft and condo market in downtown Kansas City still leaves me wanting. For instance, I was told that a condo “really cash flows” and that an investor she works with is really happy. So naturally, I inquired as to details. I was told that the place costs $136,500 and is renting on a two year lease for $850 per month.

To me, that is not a great investment from and investment property point of view. Go ahead and work the numbers and argue with me. But I’d rather find you something around Kansas City (and if you are patient you definitely can) that rents for $700 and you purchase it for about $85,000 to $90,000.

But going back to what we were doing…

dh_rivermarket The investment for this corporation makes complete sense. They are paying cash. They would otherwise continue to drop at least the same amount of money on hotel bills. And since this is a well established company with a well established presence in Kansas City they will own this property for years and years and years.

And it brought me back to when I was in my twenties with my young bride living in a high rise in Bethesda, Maryland. (Just outside of DC.) I love lofts and condos. I love stepping out the front door and into a neighborhood full of life. Pizza parlors. BBQ. Mexican food. (Can you tell the River Market is where I’d buy one?)

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Filed under Kansas City neighborhoods, Kansas City Real Estate

April 15, 2009 · 7:53 am

Rental Property Update For Waldo

The Waldo neighborhood of Kansas City is seeing some pretty darned good activity right now on rental property. I know of two different units that went up for rent about or less than 30 days ago. One has a tenant already in it and one received a deposit last evening. che-pi

As I’ve already told you a couple weeks back I’m seeing a lack of inventory that is ripe for cherry picking. There are homes to be had. But the “deals” everyone dreams of when watching their local news are just not there. While it is certainly not a seller’s market in Waldo neither is it a buyer’s market. If the inventory is priced according to it’s condition it will sell quickly. Same goes for the rental possibilities.

Waldo is a section of Kansas City that I just love for rental properties. If you are looking for an investment property it’s a great place to start. I also I have my eye on a place up in the East Plaza area.

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Filed under Investment Property, Kansas City neighborhoods

January 26, 2009 · 9:10 am

Is Your Rental Property In The Murder Factory?

There was a point in the last real estate boom where I literally, without exaggeration, received 15-20 calls a week from California real estate investors looking to buy rental property in a part of Kansas City now referred to as The Murder Factory.

The Murder Factory is the 64130 zip code in Kansas City. And trust me, you can also throw in the 64132 zip code as well. To see where these zip codes are in the city click on this zip code appreciation link from a blog post I did last year regarding Kansas City real estate.

To get a full appreciation of what I’m saying you’ll need to visit the Kansas City Star’s article on The Murder Factory. Read both parts. Go ahead. I’ll wait. I’ll be here when you get back.

(The photo above was taken from the Kansas City Star. Click on link for full photo credits.

“What I’m going to do is buy these homes for $5,000 – $15,000, put in $3,000 – $5,000 in repairs and upgrades and then rent them to Section 8 tenants for $825/mo. Then I can sell it for $70,000. Will you be my real estate agent and help me find these?”

No.

I realize this is a family blog. But it was bullshit from the beginning and it still is. Today, I receive about 1-3 calls a week from people who bought these dogs begging me to help them sell them. Last week I had a call from a New York real estate investor who swore to me he was willing to let a few of his houses go for 35 cents on the dollar just to be rid of them.

Trust me. At that price he was still making a profit and leaving someone else with headaches unimaginable. This is not a Kansas City problem. It happened (still happens) all over the country. Heck, I still get calls today asking me to participate in this stuff.

If you are participating in this kind of activity in these kinds of neighborhoods then shame on you. You are continuing the raping of these people for your own personal gain. And I won’t be a party to it.

If you really want to help, be a part of these neighborhoods. Put the money into a house, find good tenants and then put some of that money back into the neighborhood. Spend your dollars at the local restaurant. Get your oil changed there. Be a part of something.

But if you are looking to just make a quick $5,000 – $15,000 you run a big gamble. It could backfire on you. You could end up another real estate investment casualty. You could end up hurt or dead. At the very least, you will have sold a piece of your soul.

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Filed under Investment Property, Kansas City, Kansas City neighborhoods, Kansas City Real Estate, Legal Issues, Real Estate Investing, Social Issues

June 11, 2008 · 8:41 am

Olathe, Kansas: Spotlight On Why I Like This Real Estate Market

Olathe Kansas Olathe, Kansas has been mentioned by me time and time again as a real estate market that I am enamored with. Sure, I live here. But there is much more to it. For real estate investors and Joe & Mary Homebuyer alike Olathe offers the opportunity for solid appreciation even in these tougher times. If it’s alright with you I’m going to take a minute and show you (and link you) to what I’m talking about.

Top 15 City in America
As recently as 2006 when CNNMoney ranked the Top 100 Cities in America, Olathe finished #13. Neighboring Overland Park finished #6. Olathe currently has a population hovering around 114,500 (up 2,400 since 2006) and a Median Family Income right around $79,100.

Olathe Housing Stats
The Kansas City Star’s zip code appreciation map shows the two predominant Olathe zip codes with appreciation over the last year. 66061 came in at 4.3% while 66062 came in at 7.6%. And as you can see by clicking on the image for Olathe Housing Stats for the last six months that we are still selling homes at a pretty good pace. I showed here on our Olathe Real Estate blog that inventory for single family homes is at about a four months. Technically, still a Seller’s Market even though people got spoiled by the markets of past years where you would sell a house in 45 days or less, sometimes.

Olathe Job Growth
Olathe is really doing well in the Job Growth category, as well. I’ve written here before how Ft. Dodge Animal Health has moved in. Along with Farmer’s Insurance. A multitude of call centers are relocating to Olathe, too. US Bank has a large tech center here in Olathe now. And we haven’t even mentioned that the world headquarters of Garmin is located right here in Olathe.

Jobs seem to be coming to Olathe every month. To keep up with the growth of jobs in and around Olathe I would encourage you to visit the Olathe Chamber of Commerce’s Breaking Newspage. I think you’ll find the website by the Olathe Chamber to be very easy to navigate and one of the most informative Chamber sites I’ve ever visited.

Olathe’s Quality of Life
Want to know the reason I live in Olathe? The Olathe School District. Period. As a father of four (two with special needs) I needed a school district that could work with my children. We interviewed the three predominant school districts in Johnson County, Kansas and felt strongly Olathe was where we could be best served. Because in addition to the two special needs kids we have one that is on an Advanced Placement path. And as we enter his high school years he is going to get to take advantage of the Olathe School District’s 21st Century Program. He’ll be taking part in Olathe Northwest High School’s e-Communications Program. We can hardly wait. Olathe Homes

In addition, Olathe is easy to navigate. Has quite a few parks for your enjoyment including Heritage Park, the Indian Creek Trailway and Frontier Park where the City hosts a series of free concerts every year. I’m usually in attendance.

Olathe’s Potential For Real Estate Investment
Olathe is not a “cash flow” city. At least in my mind. It will usually take you about 20% down to break-even on a duplex here or about 25%-30% to break-even on a single family house. But having said that, there are few areas around Kansas City…or the Midwest for that matter…that you are going to get better long term, steady growth.

So for my investors I will usually recommend they have only part of their portfolio parked in Olathe. If you own five investment properties I might recommend two be in Olathe and the other three be in cities where you will be able to leverage your money more in the 90% LTV range. Because just like it’s nice to diversify your investment holdings it’s nice to diversify your real estate investments.

A for instance would be of a “pocket listing” I have. It’s a duplex with 2 bedrooms and 2 baths per side. Rents are a steady $750 with vacancies nearly non-existent. So you have a Gross Scheduled Income of $18,000. Asking price is $191,000. Your Gross Rent Multiplier is 10.61. Not too shabby.

Closing Thoughts on Olathe
I hope you have enjoyed our little tour of Olathe. If you are thinking of moving to Olathe take some real time to follow the links and explore our city. Give myself or our team a call or contact us if you need help selecting housing that is suitable for you and your family.

If you are a real estate investor be sure to ask for specific examples if you are looking to add a rental property or two to your investment portfolio.

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Filed under Kansas City neighborhoods, Olathe

June 2, 2008 · 9:21 am

Real Estate Investing Hot Spots Around Kansas City

Real estate investing is part research, part financing, part math, part intuition and part guts. You can argue about the size of the parts, but here in Kansas City we know it will take all five to make a successful real estate investment property.

Areas I’m high on right now include Olathe, Gardner, Lenexa and Shawnee (Western and southern Johnson County) because of the actual and potential for job growth over the next one to five years. As mentioned in a post over the weekend about apartments in Kansas City Marcus & Millichap feel the same way. But I also feel that way about Blue Springs, Lee’s Summit and the Belton/Raymore areas in Missouri. The Kansas City International Airport area has a vibrancy to it that I’m beginning to believe out-shines all the rest of the areas in Missouri. I’m watching it closely.

But let’s not forget the future. Where might positive growth be most likely has the years go by. Think implosion.

I lived in the Washington, DC area when the mass of the city became so great that the far-flung suburbs continued to grow but the inner core of the city exploded with growth and opportunity. Why? Because the point had come and been exceeded where people would drive to work. No longer was another 5 minutes a way just the blink of an eye. Thirty minute commutes became forty-five and then an hour. At the forty-five mark (each way) people began to wonder if it wasn’t less expensive to pay the extra bills for the house close in. If not in money, then lifestyle.

At the hour mark they quit wondering and those that could afford to left the suburbs and went back in. They bought small houses, tore them down and built. Or they rehabbed. Or they made do. But back into the center of the city or the very close suburbs did they go causing an upward pressure on housing and rents.

Could this happen in Kansas City? Well, yes and no. Kansas City has more highway miles per capita than any other city in America. Our commute times here are nominal. Basically for every mile you drive it will take one minute. (Eat your heart out, Los Angeles.) Oh, it can get crazy and take you upwards of forty-five minutes to go thirty miles. But not too bad.

Where I think the pressure will come from is rising gasoline costs. Sure, if you can afford a Range Rover and are living in the posh neighborhoods of south Leawood then you can adjust your spending and adjust to the rising gasoline prices without too much sacrifice to where you live. But what about those that rent? Those that are the rank’n’file of the work force? First time home buyers who struggle to put every dime they have together to get that first house?

My prediction? Prairie Village, already going through a renaissance will continue to be more and more attractive. Brookside, Waldo and the Kansas City’s close-in northern suburbs will make people drool. The Kansas City, Kansas neighborhoods around the KU Medical Center will continue to be rehabbed and converted to today’s buyer.

When you are considering where to put your real estate investment dollars think job centers. Where are the people? Where are the people headed? What are their incomes and lifestyle habits? What external factors go into these decisions? Stop, take a minute and put on your thinking caps. Then go with your gut.

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Filed under Kansas City, Kansas City neighborhoods, Real Estate Investing

March 15, 2008 · 10:50 am

Kansas City Power & Light District: Two Thumbs Up

The Kansas City Power & Light District gets a thumbs up from me and an another from by buddy. We spent the day there yesterday hanging out in KC Live with all the festivities for the Big XII Tournament. As you can see from the photo, there was not only a sold out Sprint Center but literally tens of thousands more came down to drink beer or sodas, hang out with friends and watch the game on the 12-15 foot television screen that you can see in the upper right hand corner of the photo.

I have no idea on whether or not this will be a long term economic success. I can tell you from a civic pride perspective that I felt like I was in a real city, again. The whole atmosphere reminded me very much of Baltimore’s Inner Harbor area. (Yes, I know there isn’t any water within 3/4 of a mile of the place.)

Gordon Bersch Marzin We grabbed a bite to eat at the Gordon-Biersch brewery. Food was great and their own brews were good. I loved the Marzen. GB describes it as “Our most popular beer which is a smooth, mildly sweet, auburn colored lager.”

The crowd was very midwestern. Well-behaved and friendly. We spoke with people from Iowa, Missouri, Kansas, Texas and Oklahoma. I even saw that Colorado brought their fan!

Chris, what does this have to do with real estate investing in Kansas City? Well, nothing really. Or everything. See, I believe cities will tell you whether they are moving forward or backwards. And that will have a determination on the desirability of a city for future work-forces and employers. And this bodes well.

Despite many fears, parking was not too difficult to find so long as you don’t mind a 5-10 minute walk. And really, if you are going down to eat and drink all day, I don’t think the walk will hurt you.

So the next time you are looking for something to do I would love to encourage you to go on down to the Kansas City Power & Light District. Eat dinner. Listen to one of the many live shows they have planned. Catch an event at the Sprint Center or visit the College Basketball Experience.

4.21.2008 update: My wife and I decided at 8:00 pm on Saturday night to go on down the the Power & Light district and see what was up. Time away from the kids and all. Anyway, WOW!

I simply cannot emphasize enough the transformation this place has on my attitude towards Kansas City night life. The place was packed. Every restaurant. Every bar. And the “common area” in the center was crowded enough to be full but not too crowded as to be miserable.

We met several couples as we wandered from place to place. Some from in town and one couple from Minnesota who couldn’t get over how cool Kansas City was. (Chamber of Commerce moment.)

The Irish bar we tried poured the Guinness perfectly and had a cool dancer come out for one song that made the live band all the more entertaining. If you plan on going to Howl at the Moon or that Rock’n’Roll bar my advice would be to get there early.

Heck, just the people watching was a blast. Women all decked out, scraggly looking and everything in between. Same with the guys. Anyway, try it out. But take your wallet. Not the cheapest food and beverages in the area!

Shameless advertisement alert: Looking for a REALTOR in the Kansas City area? Then contact Chris Lengquist of Keller Williams Realty in Olathe.
M 913.568.1579 EM listwithchris@kw.com
www.olathekansascityrealestate.com

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Filed under Kansas City entertainment, Kansas City neighborhoods