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Just as a head’s up, if you are a reader and you will be attending PREIMA’s Got Money? Need Money? event here in Kansas City next week, be sure to say “hello” as I will be there on Tuesday and I will be speaking on the Failure Fest Panel.

Should be a lot of fun. Real estate investors and money people from all over the country will be there.  Maybe we’ll see you there, too.

The great news is that housing for investment purposes is still strolling along at many price points.  But I want to point out that the mistakes learned in our last real estate recession are still affecting our loan parameters today.  And that’s generally a good thing.

But seriously, if you are buying $944,000 worth of real estate and you are putting down 55% of the value AND paying all the closing costs out of pocket, how is it possible to be a credit risk?

The scenario above has 5 duplexes with, of course, 10 units.  9 of the 10 are rented.  The other one could easily be rented before closing. No sweat.  Cap rate?  Debt coverage ratio?  All within the parameters that the mortgage banker has set.

And yet, someone has decided, arbitrarily mind you, that they can only write four loans, not five.  So now we have to go find another lender.  Ok, fine.  But really, who loses here?

I realize this may sound like I’m griping for griping’s sake.  But at what point do people start examining each situation instead of coming up with rules to hide behind?  Not just in the lending business. But in everything we are involved in.

The first two months are always the hardest.  I’m talking about when we take over a rental property for the first time.  Whether it’s already been managed by your or we have just finished rehabbing the house and now it’s ready to rent (well,especially if it’s being rented after rehab) we find that the first two months, from a property management standpoint are always the hardest. Why?

If we are taking over the property the tenants usually will want to tell us why.  Let’s face it.  If we are taking over a property it is probably because someone else hasn’t been doing a bang-up job.  So first we have to clean up the deferred maintenance issues that are no doubt present, smooth over the tenant and do all this without freaking out your check book too much.  

If we are renting a house that just got through with an extensive rehab then there are all sorts of things that may not have shown up in the rehab.  For instance, you can run drains and flush toilets for construction crews but until you have a house full of people using toilet paper and using the toilets often you cannot know if there is a problem somewhere deep down the drain line.  Or perhaps the furnace only works intermittently because of some weird deal.  We always find at least a few things like this.

The caution here?  Just make sure you have some repairs dollars still set aside for the first couple months of new tenancy.  After that it usually slows down to just an occasional trickle of problems.  But those first couple months I can almost guarantee you we will speak quite often.

For the readers in the Kansas City area it’s time to start thinking about the holidays and holiday pictures.  Did you know that Thanksgiving is only 4 weeks away?!?

If you are in Olathe or the greater Kansas City area you might want to consider Portraits Today Studios in Olathe as your portrait studio of choice.  We’ve put a click to it so go on over and spread the word to your friends and family.  I know this has nothing to do with real estate investing, but for me it’s another investment vehicle.  🙂

Real estate investors, especially new ones, are constantly putting the proverbial cart before the horse.  Why are you picking investment strategies before you even know what the goal is?

A Retirement Worth Having is not about whether you are flipping or holding or selling notes.  It’s about a purposeful plan, as my friend on the west coast would say.  Seriously, I like to spend and hour to 90 minutes talking with my prospective clients finding out what their goals are, economically and lifestyle speaking, before I’ll even go out the door to show them a single possible rental property.  What’s the point, otherwise?  How can I match you with an income property that will help you to accomplish your Retirement Worth Having if I don’t even know what the cash flow or equity position will need to be?

Stop looking at possible rental houses until you know what you are trying to accomplish.  I’ve said this many times and I’m going to keep saying it.  Think about it.  It just makes sense.

Kansas City Investment Property
Chris Lengquist
Keller Williams Realty
Diamond Partners, Inc
Olathe, KS
913-568-1579

As some of you know I like to ride a bike.  And this year more so than most.  I used to ride the dirt/rock trails but as I’ve been getting older (no fault of my own) I notice that I don’t like the pounding as much so I’ve put new front gears and road tires on my mountain bike and I’m getting through some distance each ride.

Now I’m going to join the Kansas City Bike MS ride from Olathe to Lawrence and then back again this September 14-15, 2013.  I’ll be doing the 38+ mile loop each day.  Maybe one day if I buy a road bike I’ll do the century…but not yet.

Please donate to Bike MS – It’s for a good cause.

Please donate to Bike MS – It’s for a good cause.

Part of the ride is raising funds for MS research and treatment.  Many of you know I have a daughter with Cerebral Palsy.  There is no ride for that.  So I’m going to ride happily for MS.  And I’d like it very much if you could support my ride.  $1 or $100. Anything would be appreciated.