August 12, 2013 · 1:25 pm

Kansas City Bike MS – Chris is Riding

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.

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July 26, 2013 · 10:45 am

Roaches and Rental Properties

Let’s talk roaches and your rental properties.  Disgusting, right? Yes!  So pay attention.

We recently took over a 5 unit apartment here in Olathe, KS.  The owner bought it from a well known local slum lord and to his credit he is working hard and putting in dollars to improve it.  Changing windows, adding working fire alarms and repairing siding is the easy part.  But getting rid of the roaches, if there is an infestation, is work.  And it’s gross.  And it’s costly.

TRUE STORY

Right after we took it over we had a new tenant ready to move in in no time.  But as he was moving in he wouldn’t even put a box down because we had one of the units exterminated the day before because the tenant complained about some “bugs” and when he got there they had run to his apartment where there were no chemicals.  So naturally he took his box back outside and refused to move in and demanded his security deposit back and a termination of his lease.

We asked for 24 hours to evaluate and had a pest control guy go through and he said “This is the worst roach infestation I’ve ever seen.”  Well, that’s not good.  (We let the new tenant out after the inspection.)

It’s a several week process  to get rid of the majority of these critters and it takes all 5 units cooperating to get it done.  And with this case it looks like it’s going to take eviction of one of the tenants to get rid of the roach “harbor”.

Roaches are a problem if you have unclean tenants.  You add unclean tenants to a multi-unit investment property and you have potential to have tenants complaining, yelling and then leaving.  Don’t let unclean tenants in and monitor to make sure they don’t become that way.

In this case this all gets chalked up to improvements since he had to do a lot of work anyway.  But it was an unexpected headache with big financial consequences for this rental owner.

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July 15, 2013 · 7:29 am

Changing Real Estate

Over the last four months of my real estate business I have been changing my real estate goals and direction.  This is because I do not believe in trying to make square pegs fit in to round holes, like so many real estate investors.

Today I received more fuel for my fire when my LinkenIn account sent me a new story update about plunging foreclosure rates.  I’ve been writing for a few months now about how the current real estate market has been changing right before our eyes.  The sudden change from December 2012 to July 2013 is a remarkably quick change.  From December to April it was actually mind-blowing.

But with the new realities in pricing and demand adjustments must be made as far as expectations with quality and price of the house you will be buying for both personal and investment uses.  Investment property expectations have changed drastically.

Yes, there is still plenty of room for the savvy, professional real estate investor.  But it’s not 2010 anymore when I couldn’t get some of you to answer the phone.  🙂

Search for homes now.

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June 22, 2013 · 10:14 am

Rental Property in Kansas City

Rental property in Kansas City is changing…economics wise.  Let me tell you what I’m seeing from three different prospectives.

TENANT PROSPECTIVE
On the Kansas side if you are a tenant you have choices but you also have to act quickly. In Johnson County we, as property managers, cannot rent houses fast enough.  I would LOVE to have more 3-4 bedroom, 2 bath homes for rent. Rents are up and competition is up which means a lot of frustrated renters.

On the Missouri side we are seeing rental inventories rise.  Therefore you have a little more time to make a decision on your next home and rents are beginning to hold steady.  No more inflation on rental prices do I see in the near future.

OWNER/MANAGER PROSPECTIVE
Tenant selection for the last couple years has been easier than in previous years.  You have multiple candidates and even though credit history may have been bad you had recovering income.  Managing houses in the lower price range ($0-$700/mo) remains the biggest challenge because of the tenants that inhabit that space.  The medium range rents ($700 – $1,000) have been performing very well and the quality of tenants has been way up.  The high range rents ($1,000 and up) have also done remarkably well in this economy.

But watch your maintenance.  Don’t create a deferred maintenance situation you will later regret.

BUYER OF RENTAL PROPERTY
Quit arguing with your realtor and keep a cool head.  I am noticing two kinds of investment property buyers right now and they are both driving me a little crazy.  🙂

  1. Buyer that won’t listen to the current market realities.  Investment property for rental purposes is hot right now.  Returns are down as prices are up.  You simply cannot offer 10-15% below market value and hope to buy the property.  This started 6 months ago and I don’t see it slowing yet.
  2. Buyer that doesn’t watch the numbers.  Usually a new real estate investor, this buyer wants to win the house to get started.  They think they are shaving their margins just a little but little do they know they are probably shaving any chance of making money in the property…ever.  Rental properties cost money on an ongoing basis.  You need to make sure the property is paying for itself instead of you constantly having to feed the beast that was supposed to feed you.

Just a few of my thoughts for now.

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Filed under Investment Property, Kansas City Real Estate

May 30, 2013 · 7:53 am

Bank Owned Home Sales Are Down…No Kidding

From yesterday’s Kansas City Star…

May 29

By ALEX VEIGA

AP Real Estate Writer

LOS ANGELES — Sales of bank-owned homes have plunged to a 5-year low, the latest evidence that the nation’s foreclosure woes are easing as the U.S. housing market recovery gains momentum.

For the January-March quarter, sales of bank-owned homes fell 16 percent from the previous three months and were down 23 percent versus the first quarter of 2012, foreclosure tracker RealtyTrac Inc. said Thursday.

The last time sales of bank-owned homes were lower was in the first quarter of 2008, the firm said.

Sales of homes in a stage of the foreclosure process also declined, falling 20 percent from the October-December quarter and the first quarter of last year.

Combined, bank-owned homes and properties already in the foreclosure process also accounted for a smaller share of U.S. home sales in the first quarter. They made up 21 percent of all home sales, down from 25 percent in the first three months of 2012, RealtyTrac said.

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I started noticing this last fall, say October?  But by January it was a full on free fall in the availability and affordability (at least for real estate investors) of bank owned homes.  You can definitely count Kansas City in this article.

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May 27, 2013 · 9:24 pm

Missouri Property Manager Real Estate License Requirements

Yes!  Yes!  Yes!

I’m going to say it again and again and again until people start listening.  In the state of Missouri your property manager is supposed to have a real estate license…it’s required.

Once again I know of a situation because someone was crying on my shoulder about how their property manager took their money and now they cannot find them.  Shockingly, this Missouri property manager was not licensed and so they didn’t have their checking account registered with the State of Missouri.  The truly sad thing is that tenants don’t know to ask and seldom to even rental property owners ask.  Even sadder is that a great many of the property managers operating in Missouri don’t even know the truth and argue in earnest that they do not need a real estate license!!!

I guess ignorance must be bliss.  Well, until someone loses big.

I the State of Missouri to be a legal property manager you must have a real estate license and operate under a broker.  See here and here.  Don’t want to read through all the rules but want to verify?  Just call the Missouri Real Estate Commission at 573.751.2628.

Note:  In Kansas a property manager for residential property need not be licensed.

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May 17, 2013 · 4:22 pm

Hey Tenants, Your Property Manager Matters

I got a call today from the former tenant of a property we just took over from another property manager.  Seems the property manager had been getting slower and slower on paying the property owner and was now two months behind paying the property owner his proceeds.  The former tenant (when we took the rental house over it was in good repair and clean) had just vacated the property when we acquired the house to manage.

She was calling to say how frustrated she was because she had super cleaned the home (and I would agree) in hopes of receiving her deposit back.  She had even had a final walk thru with the property manager and he promised her the money but “didn’t have his check book” at that time.

It’s a couple weeks later and now the manager isn’t returning her calls.  Neither is their leasing agent.  And now she hears me telling her that they weren’t legal managers anyway because they were not licensed real estate agents and that is a requirement in Missouri.

Checking to see if the property is something you like is important.  But knowing who and where your money will be held is equally important.  My guess is she’ll not see that money again.  And neither will the owner of that property.

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