Category Archives: Misc. Real Estate

January 24, 2008 · 8:47 am

Kansas City Real Estate Investing Thoughts

Have you been paying attention to interest rates? I just had an investor lock in at 5.875% on a non-owner occupied investment property here in the Kansas City area. Do you think that helps cash flow? 🙂

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It’s been so freaking cold here lately (it’s 2 degrees as I write this) that I stopped by a vacant house one of my clients has to make sure all the water pipes were not frozen. Since they are claiming we’ll get up to the 50’s on Sunday and Monday (I hope that is true.) you might want to check out your vacant rental property to be sure, as well. You don’t want a frozen pipe thawing an then running water everywhere.

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I’ve been noticing a definite increase in interest in the Kansas City real estate investing market. In the last 5-8 days I have spoken to people from Sacramento & San Francisco & Los Angeles, California, also Seattle, Washington, New York, New York and Pensacola, Florida.

People are looking for a stable market in which they can park some of their equity in real estate. All I have to say is “Bring it on.”

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Just in case you have not been paying attention, my beloved Kansas Jayhawks are now 19-0. And they look good.

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January 22, 2008 · 1:37 pm

Investor’s Beware

The following guest post is brought to us by Shaun Kilburn of AAA Insurance. Be easy on him. 😉 It’s his first post!

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Investment properties are a wonderful asset and provide both short term and long term earning power on your money. As an insurance agent and property investor I find it hard to believe that owners of properties don’t shore up their risks in several key ways. The hard truth about liability insurance is that as your assets go up so should your liability insurance. Your primary residence has normally up to $500,000 worth of available liability protection. But what happens when your net worth starts creeping up over that amount? Well you had better start by speaking with a reputable insurance agent. Your assets are vulnerable to law suit once you have more than your home or umbrella insurance policy allows.

Many properties start to become more valuable than previously thought as your rents go up whether the market is moving sideways. Your primary residence, investments property, and assets not in a trust will be discovered by an opposing attorney who has done an asset search in the event of a lawsuit. Your umbrella policy should be valuated at more than you are being sued for. The attorney can chose to sue you as the policy owner or you as the individual based on where there is more money. All the attorney has to do is sue for more than the liability limit will cover. If your worth is more than the liability limit on your policies, look out, you’re in for a bumpy ride.

All this anguish can be avoided by taking out a simple umbrella or excess limit liability policy. They are the cheapest form of insurance and although a million dollar policy sounds expensive they usually run less than $200 a year. That’s right, less than $200 and you are as close to bullet proof as you’re ever going to get. Do yourself a favor today and call a reputable insurance agent with at least an A rated company (A.M. Best). Your investments are too valuable to leave to chance.

Another area of concern is making the appropriate disclosures as to the type of policy you carry on an income property. There are many kinds of policies from straight renters to builder’s risk, non-occupied dwelling, improvements and betterments policies etc.

Each time you change the parameters of the original contract, you need to contact your insurance agent as you may find yourself with no coverage in the event of a loss. Most companies do not like non-occupied dwellings. If you started out with an occupied unit when you signed the contract, and your property becomes vacant for an extended period of time, say over 60 days, you may find that you need to change your property to a non-occupied policy or at least disclose your situation to your agent and go from there. Many times the insurance company will work with you, and as long as it is documented that your situation has changed. In the event of a loss if you have notified your agent then when the claims adjustor does a loss assessment any changes in occupancy or other structural changes will be accounted for and your policy will most likely pay out.

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For questions or quotes you can contact Shaun Kilburn of AAA Insurance at:
816.931.5252 x 173
skilburn(at)aaamissouri(dot)com

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Filed under Legal Issues, Misc. Real Estate, Preferred Vendors

January 20, 2008 · 1:38 pm

A Successful Few Days In Kansas City

Early, and I mean early, this morning I put Jeff & Josh Brown back on the plane to San Diego, California. While they were here I had a chance to show them that Kansas City does have wireless internet in their hotel rooms, running water to houses and buildings made out of other materials than sod.

Jeff Brown On the business front Saturday saw two very successful investment workshops conducted by Jeff. Feedback from those that attended has been positive. There is a hunger in the market to know all they can regarding their real estate investing present and future.

And also on Friday I think Jeff was impressed with some of what Kansas City real estate investment housing has to offer.

From a barbeque standpoint Jeff & Josh got to experience Arthur Bryant’s, BB’s Lawnside and Oklahoma Joe’s Bar-B-Q’s. You’ll have to ask Jeff which he preferred. I’ve emailed him a photo of him standing in front of a real BBQ pit at BB’s. Now he understands how BBQ is made. 🙂

The photos are from BB’s. (Athol, I was using a small point & shoot in low light. So forgive the lack of quality.) 🙂

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January 17, 2008 · 9:27 am

Odds & (Burnt) Ends

I have suspected this was going on at unprecedented levels and now I have confirmation from today’s Kansas City Star. The Star reports in the Business section that CountryWide Financial Corp helped 81,266 borrowers renegotiate their terms to allow them to stay in their homes.

First, this just seems smarter than taking the real estate back. Second, it shows there is a movement by the free market to correct it’s own mistakes. And third, the borrowers will benefit, at least in the short term.

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I’m picking up Jeff & Josh Brown today from KCI. For anyone interested, we’ll be atBB’s Lawnside BBQ tonight. We’ll probably get there around 7:00. John Paul’s Flying Circus will be performing. Maybe we’ll see you there.

For a late lunch I’m taking him to Arthur Byrant’s. It’s my hope we’ll put 20 lbs on them before they leave.

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Anyone else tired of all the snow? And the kids are out, again. Ugh.

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Watch carefully for the new construction homes announcement next week. I’ll be unveiling it this Saturday to the workshop attendees. Whatever is left will be on this blog.

Kansas City Rental Property Registration Program

Effective today, January 1, 2008, it is MANDATORY that all owners of rental property within Kansas City, Missouri limits register their income homes. Registration runs through January 2008 without penalty. Penalty for non-registration on and after February 1, 2008, will be $50 per unit.

To get all of the details you will need to follow this link. From this link you will be able to download the proper forms to take care of this task.

Again, Kansas City now requires rental property to be registered with the city. Hopefully, this is as far as the law will go. Based on how they’ve mismanaged just about every other program under their care and supervision we can only hope they don’t go to mandatory yearly inspections with fees.

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December 6, 2007 · 2:21 pm

Real Estate Fraud Red Flags

fraud

Today I spent 3 hours in class over at the Kansas City Regional Association of REALTORs. It’s a required class and mostly review. But I did like that the handout had these following red flags:

Assurances not to worry about the appraisal.
Silent Second Mortgages, Texas Earnest Money (i.e. a seller carry-back that is forgiven at closing).
Promises to the buyer that the property will be leased or rented in behalf of the buyer and the loan payments, insurance, etc. will be covered.
A new immigrant is told to use someone else’s social security number.
Certain items are omitted from the HUD-1 closing statement.
Advance down payment amounts which are falsely represented as being paid by the borrower.
Quit claim the property back to seller or co-conspirator without notice to or permission from the lender.
Resubmission of the listing to MLS for a higher list price so it will coincide with the inflated contract.
There are an unusual number of addenda to the purchase contract.
Last minute invoices are submitted to the closing agent.
Unusual expenses are paid by the seller, such as large repair charges, and/or charitable donations.
Lenders or mortgage broker not willing to commit something to writing.
Mortgage broker does not want real estate professional to contact lender or investor to alleviate concerns.

First Time Home Buyer? Be Smart.

No one can see into the future. But first time home buyers can be smart by knowing what should happen in the long term future.

We are in the middle of a real estate correction throughout most of the country right now and that leads to opportunity. Want an example?

Today I go to closing with a young married couple in their twenties. They were looking for a duplex to buy (smart move) because they wanted to live in one side and allow the other side to pay for 68% of the expenses. And they hired me to help them find such a place.

After evaluating the market and weighing the possibilities I ended up recommending to them a bank owned single family home. Why? The home was ugly inside and out. Peeling paint. Stained carpeting. Out dated lighting fixtures. Not up to snuff to most home buyers.

The home was priced at a place that investors didn’t like it because there is not enough room to rehab and sell. Home buyers didn’t like it because it wasn’t move in ready. But this couple liked it because a more thorough inspection and pencil to paper showed that after costs of acquisition and repairs they would be sitting with a 10% equity position, day one! Without figuring in their down payment.

There are other properties like this available in the Olathe School District and around the Kansas City area. Around the country, for that matter. If I were a first time home buyer I think I would follow this model. Look for something with a 10% equity position (more is okay) or a duplex.

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