February 3, 2007 · 6:12 pm

A Profit In His Own Town…

I’ve always heard that you have to get 100 miles from home before anyone will really listen to you as an expert. And I don’t know if I’m an expert, but I’m pretty darned knowledgeable about the Kansas City income property market. I say that not to brag but to tell a story as I get geared up for the Kansas v Texas A&M game this evening.

In town with me today and tomorrow is a gentleman from the Seattle area here to purchase a property…or maybe even two. He owns property in his home city and one here, currently. When I ask him if he is going to add to his Seattle holdings he says it’s doubtful because the “numbers there don’t pencil out.” He has some ties to Kansas City so he got in contact with me and came out to look around at what was currently on the market.

Showing him a few properties in Overland Park really helped him to understand how good we have it out here. It’s not necessary to put down 40%, or 50% or even worse 60% to get an investment property that will break even or produce a little Cash Flow Before Taxes. No, Overland Park provides good clean rental houses that “pencil out” with 20% down, or 25% down if you are looking to install a property manager. (And if you are looking at KC property from Seattle, Washington…I would advise that.)

Heck, if he didn’t like Overland Park and Olathe so much I might even take him over to certain parts of Wyandotte County, KS or Jackson County, MO where they cash flow with only 5%-10% down!

The amazing thing to me as a professional real estate agent is that I can talk till I’m blue in the face with a lot of “locals” and they are constantly worried about everything under the sun. Bring in an outsider and they get smiles on their faces.

Owning real estate for investment purposes is hard work. It takes financial stability, quick wits and a desire to improve your life on down the road. There will be inconvenient repairs and tenants that may drive you a little crazy. But when you are sitting on 6-8 properties on down the road with at least an 80% equity position you’ll be glad you took the time and made the effort to do so. Give Kansas City properties a chance. If outsiders can see it, shouldn’t you?

I’d love to hear your comments on this or why you think other areas might be better.

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Filed under Kansas City Real Estate

February 1, 2007 · 10:29 am

Freaky Fridays


On a whim I have decided to devote Fridays on my blog to miscellaneous ramblings and venting in general on all things that come across my path including but not necessarily related to real estate. And since it’s my blog…I can do this.

Reason #458 to purchase a Mini Cooper from Baron Mini in Shawnee Mission, Kansas: Yesterday it was 17 degrees, I started my car and let it warm up. I then went outside (where it had been parked at my office) threw on the heater and WHAM a 10″ crack appeared on my windshield. I got out and looked at it but couldn’t see a rock chip so this morning I drove up to Baron. They looked at it for 20 seconds and then booked me a car and a repair for tomorrow. The service there is always fabulous!

How about them Kansas Jayhawks? Big game this Saturday against Texas A&M and ESPN College GameDay is going to be there!

Real estate agents that cannot return the key to the keybox or leave a front door unlocked drive me crazy. It’s really simple. Treat the home being shown like it is your own. End of discussion.

I am assuming that since they are fast food that Chick-fil-A sandwiches are not good for you. But do I love that #1!

When will the snow melt here in Olathe? I’m sick of it. If I wanted to live in Minneapolis I would move there!

And yes, I’m aware it’s not Friday…I just may not have time to post tomorrow!!! And I’m a rebel who makes his own rules…

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Filed under Kansas City, Kansas City neighborhoods, Kansas City Sports

January 31, 2007 · 8:45 am

Kansas City MLS Numbers…In The Raw

From the Heartland MLS (serving Greater Kansas City and some outlying areas) I found the following;

All of MLS
Total units currently for sale: 26,708
Total units sold in previous 12 months: 39,585

Johnson County, KS area only
Total units currently for sale: 4,593
Total units sold in previous 12 months: 10,801

JoCo Multi-family homes only
Total units currently for sale: 48
Total units sold in previous 12 months: 83

What is your take on these numbers?

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Filed under Kansas City Real Estate

January 30, 2007 · 12:24 pm

Section 8 and the Income Property Owner

As an owner of income property sooner or later you will be asked if you accept Section 8 tenants. Before you answer the question it is my hope that you will have thought about the question in advance. Because my answer to prospective tenants is not a simple “yes” or “no”. It goes deeper than that.

To many landlords all Section 8 is the same. But nothing could be further from the truth. I’ll give you a for instance at the risk of recurring wrath. In my future dealings I will never again recommend to my clients, or myself, to take on a tenant from the Kansas City Housing Authority. And sadly, my decision has nothing to do with the tenant! It has to do with the KCHA. In my dealings with them, and I swear I am not making this up, I have called them over 80 times for every 1 phone call I get back from them! (And yes, I have logs.) Employees leave without ever terminating their voice mails. Inspections are skipped. Reports are never forwarded. Calls not returned. Have some fun some time and try to call in on the main number. Let me know when they answer.

On the opposite side of the issue you have the Independence Housing Authority. Here you have a group of people who understand they are in a business that deals with human beings. Calls are always returned, sometimes within an hour, or so. Communication is excellent through mail. Appointments are kept. Payments mailed on time, every time.

Now I ask you, as a landlord, who would you want to accept tenants from?

Another thing for the savvy landlord to consider is the security deposit. Most (I haven’t run into any) housing authorities will not pay a security deposit. So if you are going to get one, and I recommend you do, it will have to come from the perspective tenant. If they cannot get a SD, I recommend you move on.

And lastly, as far as this blog is concerned, an issue of fairness and compliance must be addressed. I have heard landlords quote different prices to tenants based on their ability to pay or if Section 8 is to be involved.

“The rent is $695/mo with a $500 security deposit.”

“I am Section 8 approved up to $725/mo.”

“Well, for Section 8 the monthly rent is $725/mo.”

Be careful. For here you are on very dangerous ground…

To discuss this topic further be sure to leave a comment or email me!

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Filed under Property Management

January 29, 2007 · 6:49 pm

Flip This House!

This well cared for home is being offered as a great opportunity for the first time investor! Located in an exclusive neighborhood with comparables coming in well over $30,000 this all brick, two bedroom one bath home (well, in the interest of full disclosure the bathroom is really more a hole in the floor since there is no active plumbing running to this home) will be offered on a first come first served basis. The initial asking price will only be $41,999. The land alone is worth more than that! After repair value rents should be well above $350 per month…if you can collect it.

Some landscaping, minor roof repair and re-pointing of the brick work will make this baby sparkle. To arrange for your private showing please allow 48 hours so that I can get a security company to escort us to this soon to be gated community.

NOTE: Not all potential flips are as obvious a bad choice as this one…you’ll need experience or a professional investment real estate agent to know the difference…

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Filed under Kansas City Real Estate, Real Estate Investing

January 29, 2007 · 11:06 am

Net Operating Income – Formula for Success

When determining whether or not to pull the trigger on a property for income purposes it is important to know the actual Net Operating Income. The basic formula is this;

Gross Operating Income – Operating Expenses = NOI

TIP #1: When determining the GOI allow for a fair, historical vacancy rate and walk the neighborhood to be sure the rents being paid on this property are in line with other properties in the neighborhood.

TIP #2: Operating expenses are crucial to this formula. Account for everything. You may even ask for the seller’s Schedule E right up front to fish out the actual numbers.

Almost every reliable real estate caluculation for investment properties involves the NOI. Make sure you get it right!

For more details on figuring expenses feel free to email me or post a comment.

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Filed under 4 Benefits of Real Estate Investing, Kansas City Real Estate, Real Estate Investing

January 28, 2007 · 9:58 pm

Putting Greenspace in Urban Kansas City

Today’s Kansas City Star had an interesting article on decking I-670 through the urban core to allow for an easier transition between the city’s Crossroads area and the soon to be alive Power & Light district. http://www.kansascity.com/mld/kansascity/16562673.htm

Several ideas were bounced around as to the end use of this deck. I would like to come down on the side that says “yes” I’m for it. And I would like the space to be used for parkland and monuments to Kansas City’s rich past. There are, of course, budgetary concerns and there will be no doubt a several decade’s delay to get it all done. But I think it would be great.

Currently I live out in the suburban jungle. Excellent schools. Plenty of grocery stores. Nice people. But having lived in Bethesda, Maryland I am looking forward to the day when my kids are out of school and I can head back down to a more urban lifestyle. And it would be nice if KC could continue it’s downtown renaissance.

I don’t think I’m alone. There are many of us trapped out here in the ‘burbs waiting for our chance to get back to city. Keep up the good work Kansas City. You’ll get my entertainment dollars when the P&L opens up!

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Filed under Kansas City entertainment, Kansas City Real Estate