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I love this burg.

I grew up in Overland Park. Went to Shawnee Mission West High School. Then on to the University of Kansas. After that it was on to the Washington, DC metropolitan area for 15 years. It’s a great town. Then I spent 3 years in Tulsa. Another real nice city.

But Kansas City is my favorite of the three. Just because I grew up here? Well, maybe. But this morning I was up in Gladstone showing a home. This afternoon I was in Olathe. In the DC area if I were to drive the 30 miles between the two I would most likely have to leave at least an hour, maybe an hour and a half. (It used to take me 1.5 hours to drive the 13 miles to my office during rush hour. 2 hours to make the drive home.) As I show homes around Kansas City I see that the planners have left plenty of room for parks and wide streets. Neighborhood schools abound.

Kansas City has enough urban to keep me satisfied and enough suburbs to keep the family man in me happy. Our economy is never as good as San Francisco or Washington, DC or even Boston. But we also do not have the crashes they have, the traffic congestion they have or crime they have. Tulsa was great but didn’t have the size to offer the sports and entertainment that people enjoy like Wizards soccer, Royals baseball and, need I say it, Chiefs football.

Housing is plentiful here. Because land is cheap. If I could change one thing about the Kansas City area it would be better land usage planning. Because land is so plentiful and inexpensive (comparably speaking) it is easier and cheaper to build new than to refurbish and revitalize the inner core. I’m afraid we may be cheating our future generations out of our natural habitat. They may have to drive many hours to see a rural scene. A real one, at least. Not a neighborhood of 5-10 acre estates.

I realize a lot goes into this. So many city governments here. It is hard to get one city to do something for the good let alone a whole metro area’s worth. And I’m not trying to sound like Al Gore and say we should count trees and put that towards the GNP. I’m just saying I would like to see better use of our region’s assets. Before it’s too late.

I have written several times before and will write many more times in the future about criteria. It is vitally important you know what you are looking for so that when you see it you can act quickly.

In the past week I have had the opportunity to help two people sell or purchase a home. In both cases there was a lot of activity around the house in question. In both cases the buyers would probably have lost the house had they not acted quickly enough to get it tied up in a purchase contract. (I’m not advocating a speedy purchase just to purchase…understand what I am saying here.)

The buyers were able to act quickly because they knew what they were looking for before they even saw it. In the case of the buyer I was working with we had seen 8-10 properties that all did not measure up either condition wise or numbers wise. But when we found a property that matched his predetermined criteria he acted quickly and got the house. If you know what you are looking for it’s not hard to recognize it when you see it.

There are a lot of questionable properties out there. Be patient and hold out for the one that matches what you have written down on paper. When you do it will feel like you’ve found the diamond in that pile of coal.

Make sure you and your REALTOR understand your financing before you go out and look at investment properties. If you are buying a 4plex your financing and down payment requirements will be different than if you are purchasing a small single family home. Or, if you are getting an 8 unit apartment you will probably be looking at a commercial loan. Is the commercial loan a balloon? I’m sure it does not have a 30 year amortization. But is it a 20 year or 25 year amortization?

Also, most lenders will not allow more than a 2% contribution by the Seller for the Buyer’s closings costs. Is an inspection required?

Get your ducks in a row before you waste your time, or mine, going out and looking at properties that won’t work for your financial situation at this time. You’ll be glad you did!

****Again, some of this has been learned through experience. Some from the wisdom of others. I hope you are finding it to be useful to you and your situation.****

Time after time I pick up the phone to hear someone tell me their real estate troubles. Some I can help. Many I cannot. Why? Because they are still under contract with another real estate agent/broker and I cannot interfere.

My best advice to you is to be VERY careful when choosing your next real estate professional. Industry talk is that some 78% of all sellers speak to only one or two agents before deciding who to place their most valuable asset with. Now, that may be okay if you have confidence in your agent and know his or her background and have checked around. But if not, you better start asking some questions.

• How many transactions have you personally dealt with in the last twelve months? (I could not care less how long someone has had a license. That has nothing to do with relevant experience.)
• How many listings are you currently servicing?
• How many listings can you competently service at this time?
• Do you have any administrative help? (Not necessary. But very helpful. If you are interviewing a sole practitioner just make sure they are not overloaded.)
• What is your fee? (Be careful here. An agent willing to slash their fee, especially too quickly, may also be willing to sell your house at a lower price the first chance they get!)
• Are there any additional costs to this fee?
• What do you think the market looks like at this time?
• If I have problems with your service, how will we get them resolved?
• What is your process of communication to keep me updated on my house?

I can give you a dozen more questions you could be or should be asking. The point is..Do Your Homework before signing the contract. It can make a big difference in how much “hassle” you will have to go through. Or how smoothly a transaction will go.

I am not trying to be a high pressure salesman here…but now is a great time to be purchasing property. Inventories are higher than they have been in a while. Going into Spring with a house that still hasn’t sold has some sellers nervous. When Spring gets here you are likely to see inventories increase at a negative pace as buyers come out to buy. So if you are looking for property, especially investment property, now might be the time to jump in!

I love the mathematics of real estate. Numbers never lie. Or do they?

Here are some intangibles that you will want to look for when dealing with investment properties;

Does the house have a big back yard? Is it fenced? Is it too big? Where is the elementary school? What school district? Does that school offer any special services that you need to be aware of? Are there any major draws that a prospective tenant might want to be close to like a place of worship, or a shopping mall or a business center? Is the house loaded with low maintenance items like brick or a steel roof?

There are, of course, many more items to think about and weigh. But I just wanted to make the point that there are more than just numbers to deal with when dealing with real estate!

This is where the rubber meets the road.

My first question is personal property or investment property?

Personal Property – My advice here is work with an experienced REALTOR with a proven track record. Why? Because there is a little bit of art mixed with science here. It is extremely rare that a particular property will exactly match a neighboring property. And even if it did the negotiation skills of the Buyer and/or Seller would probably be different. Having said that, personal properties are mostly priced using a comparison model. It is helpful to know how your house compares to the other houses in your neighborhood. More bedrooms? Less baths? Are the mechanicals new or 15 years old? All of these are factors. So is the season of the year and motivation to sell.

Sit down with your real estate agent and go over the numbers for the last 12 months. Look for trends and be honest when comparing your home to your neighbors. Look at the home from a Buyer’s eye. (You may be very proud of the new roof and furnace. And the Buyer does notice that. But the Buyer also expected the house to have a dry inside and heat in the winter.)

Investment Property – I’ve said it before and continue to stand on my soap box. When buying income property the price should be based on the cash flow that property will produce. What should that be? I cannot answer that. It depends on your goals. If you are an investor looking for a 15% cash on cash return you will have an entirely different approach to the value as an investor looking for any home that will have an 8% cap rate.

Before you go out and look at properties I would advise you sitting down with an informed real estate agent and determine what your goals are for your money before you invest in rental properties. Yes, you have to take comparisons into account. But don’t base your bid on those alone.