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Like most people, I didn’t really know what I was getting in to when I started working in the field of real estate investing.  Fortunately,  I met a man named Phillip from Bainbridge Island, Washington who showed me the ropes and gave me quite an education about real estate investing, working with real estate investors and what to look for in a rental property.

Over the course of about 18 months I learned a ton from that man.  He hired me to liquidate a couple dozen of his income properties and it was education by immersion. Here are a few of the things that I learned along the way that I wished I had known from the very beginning;

• The difference between proceeds and profits.
• Cash flow versus appreciation and the inverse relationship.
• What a quality property looks like.
• What a quality tenant looks like.
• What a quality property manager looks like.
• Trust, but verify.
• How to measure returns in a way that is meaningful to your situation.
• What a real estate investor is looking for in a real estate agent.
• What a real estate agent is looking for in a real estate investor.

These are just a few of the seemingly simple categories that deserve a lot of attention in your thought process of acquiring residential income property.  We can talk about these in detail.  All you have to do is invite me out for a coffee or beer…or heck,we can talk by phone.

Ad Astra Realty, Inc
Chris Lengquist
2011 E Crossroads Ln #305
Olathe, KS  66062
913-815-3473

Johnson County, Kansas is definitely in a seller’s market.  It has been for several months now. So how do you go about investing in real estate in Kansas City in a seller’s market?

Well, first off, you recognize the shear size and cultural complexity of Kansas City.  No, we are not the most populous nor densely populated city in the States. But we are huge geographically.  Lucky for us, we have lots of highway miles for a city our size.  But heck, the airport is 43 miles from my home in Olathe, KS and the airport is located in Kansas City!  (ie, I can be in KCMO in less than 10 miles.  But it can take me 43 miles to get to the northern end of the city.  By east coast standards, that a long way.)

So not all of KC is in a seller’s market. But Johnson County, KS is.  Johnson County is Overland Park, Leawood, Olathe, Shawnee, Mission, Prairie Village, etc.  Since about early March the market has been red-hot. Prices haven’t been skyrocketing but Days on Market has been short lived.  With the heat of July (and the vacations) the market has cooled somewhat.  But it’s still simmering.

You have a choice.

Either buy smart and accept that the prices are up and thus, returns are down or sit and wait. But wait for what? Maybe the market doesn’t go down.  Maybe, and this is highly probable, interest rates start to tick up.

Now interest rates would have to really tick up to be “bad”.  But every extra expense in interest is less house you can obtain and still get acceptable ratios for rental property.  Higher interest rates are not good for landlords, nor renters.  If rental housing supply is still low when interest rates are ticking up the investor will try to pass that cost along to the tenants.  Easy to do in a low vacancy county like Johnson County.

The best time to invest is when you have the money and are ready to pull the trigger.  Economies wax and wane.  Go ahead and get aggressively patient.  Search out that “good” rental house.  And when you see it, act quickly before someone else does.  Don’t buy just to buy.  But be ready to act quickly once an opportunity presents itself.

I just had another agent from another company give me the biggest compliment I’ve ever received in real estate. He told his client that the reason he’d want to do business with me and my company, Ad Astra Realty, is that we have integrity.  Not that we’re perfect or the cheapest or the best or whatever. But that we have integrity.

I think integrity matters in property management.  In real estate. In everything you do.

Do your words match your work?

Ethics and integrity get thrown around and out the door pretty quickly now days and in business.  It seems everyone has a set of core values, until their pocket book may be in jeopardy.

I’d like to say that business owners with integrity are out there.  Larry Kueser, the Operating Principal over at Keller Williams Realty, Diamond Partners, Inc. is one.  And I could continue and name others.  But I could also go down a much longer list of individuals and businesses that seem to forget integrity when the chips are down.

Sometimes having integrity means just saying “I’m sorry.” Sometimes it means being patient.  Sometimes it means spending the money to make something right.

Now, having integrity doesn’t mean you have to be wronged. It doesn’t mean you are always wrong.  But in your soul, you know the right thing to do. Do you have the guts to do it?

I have a confession to make.  (No, this is not a lead in to a Foo Fighters song.)  Somewhere last week and this week I have failed miserably in the communication to an owner of seven properties we manage.  I thought I was being clear.  But based on what I’m hearing from one of our staff and the nature of the client’s questions, I know I’ve failed.

But here is the message:  You have to occasionally spend money on your rental properties. 

We want our investment owners to make as much money as possible on their income properties.  But after you’ve owned property for a number of years things need updating, bushes and trees need trimming, items that slowly fall in to disrepair need repairing.

This doesn’t have to happen all at once. But if you want the full value of your rental property on down the line in terms of maximum rents and resale value, it’s is a must.

I just need to start all over again with this owner  and be sure I have communicated completely this need.  But ultimately it’s the owner’s money and the owner’s decision.

HELP WANTED: Ad Astra Realty, Inc is in need of a bookkeeper/accountant to start work immediately. This is initially a part time position that could grow to a full time position depending on skill set and expected, continued growth.

Must be familiar with bookkeeping, Quickbooks and minor account auditing. Ability to learn a new set of financial tracking software, Buildium, a must. We have trusts accounts that we must get perfect for our clients.

Duties to include bill processing and payments, owner ledgers and disbursements, deposit preparation, account audits, processing of commission checks, etc. Additional hours could be earned if you have additional customer service skill sets.

Property Management Truths.

#1 – You can manage your income property yourself.  Or you can manage a manger for your rental house.  But there is no such thing as complete passivity when it comes to owning residential investment property.

Let me explain.  Managing a single home is no big deal.  Literally, anyone an do it.  Managing a small portfolio of homes is not a big deal, either.  Let’s say we’re talking 5-10 rental properties.  But the more property you take on, the more likely you are to need to choose between your full time career and having your investment portfolio professionally managed.

But property managers may be managing, literally, hundreds or perhaps thousands of homes. No matter how well staffed and how many checks and balances are in place the managers should still remain in communication with you about your money, your property and your maintenance.  That’s going to take some of the owners’ time. If the owners won’t cooperate, you can’t then blame the managers when something arises that upsets you.

There is no free lunch in anything.  Sure, hiring a professional property manager is going to save you lots of time and you’ll gain (hopefully) expertise.  But you still have to be somewhat involved.

Official today, Chris Lengquist is no longer with Keller Williams Realty.  He has opened his own brokerage, Ad Astra Realty, Inc.  Chris and Ad Astra Realty  are licensed in both Kansas and Missouri.

From Ad Astra Realty’s website:

“Ad Astra Realty is Kansas City’s premier real estate firm for real estate investing and property management.  We also offer traditional real estate services for buyers and sellers in both Kansas and Missouri.  Broker/Owner Chris Lengquist has been working with home buyers, home sellers and real estate investors since 2002.”

Please join Chris on this exciting new journey.