BBQ Capital | Kansas City Real Estate Investing | Real estate investing and property management in Kansas City.

November 5, 2009 · 10:48 am

How To Inflate A Housing Market And Steal From The Next Generation

My head hurts. More rather, I hurt for my kids and their kids. I’m going to take a very un-popular stand for a real estate agent to take: The Home Buyer Tax Credits are bad for our current housing market and they are bad for the future health of our economy.

The Washington Post
The home-buyer tax credit: Throwing good money after bad

Yahoo!
Congress set to expand home-buyer tax credit

Oh, don’t get me wrong. These are the rules before me so I will maximize those rules to the full benefit of both my clients and my family. I’m going to need to. Can you imagine the weight of national debt our children are going to have on them? What will Jake’s effective tax rates be when he’s forty? (He’s currently seventeen.)

And then, as if Fannie Mae cannot mismanage the system as they have it now, they are going to start renting back properties to the very people they took them from!!!!!!!!!! (Thank you Aaron for the heads up. Sadly, this was already on my radar.)

Yahoo!
Fannie-Mae to rent out homes instead of foreclosing

Never in my life did I expect to have a government so bent on buying votes. Is there anybody this administration is not trying to throw money at? I don’t get too political here on this blog. But it cannot be too hard to figure out that I am a fiscal conservative. There are times to borrow and times to pull back. There are times to invest and times to take your losses. How much debt will we have standing before us before this four years is over. Bush spent like no other President ever and I resented that. But this guy is spending so many times what Bush spent it’s unbelievable.

Take advantage of it and use it to your benefit. You are going to need hard assets when inflation comes. And I’m more convinced than ever that the government will have to use inflation to eliminate some of the debt. Buy an investment property or two for your future. You’re gonna need’em.

4 Comments

Filed under Social Issues

November 3, 2009 · 10:41 am

Kansas Basketball Tips Off Tonight

Yes. I’ve heard there is a World Series going on. I’ve also been told some states are holding an election. And those things are seemingly important. That is until you realize that the Kansas Jayhawk basketball team tips off tonight in Allen Fieldhouse for their first exhibition game of the season.

1 Comment

Filed under Kansas City Sports

November 2, 2009 · 5:59 pm

Real Estate Investing’s 7 Deadly Sins

Real estate investing in Kansas City, California, Florida or wherever share these deadly sins;

Not understanding the income.
Not understanding the expenses.
Not understanding property management.
Not understanding Mr. Murphy.
Not understanding your financing.
Not understanding your reserves.
Thinking you understand.

4 Comments

Filed under Real Estate Investing

October 26, 2009 · 8:44 am

Honest To God, Fannie Mae Doesn’t Get It

I have ranted and railed against Fannie Mae and Freddie Mac here on this blog before. Not only do they put up barriers to a true real estate recovery by keeping real estate investors, actually qualified real estate investors, on the sideline but in addition they staff themselves with asset managers that just don’t seem to understand real estate. Seriously.

Read the link above to see previous self-defeating decisions they have made. But now I have a new story.

I represent a buyer who contracted a Fannie Mae owned duplex in the Kansas City area for $140,000. Based on comps we felt this was a bit high but that taking this position would ensure my buyer got the property for a good price wherein he could do the necessary repairs and still have room for cash flow.

Bank of America did an appraisal that came back at $120,000, because of a very recent fire sale that Fannie Mae had held a short distance from the property in question. So we submitted an amendment to the contract changing the sales price to $120,000. Fannie Mae would not sign, not that they ever got around to signing the original contract, but after about 5 days of communications decided to order their own appraisal.

How did their appraisal come back? $130,000. So they will sell the duplex for $130,000, right? No. Their answer is to ignore and reject my ready, willing and able buyers and to discuss a price reduction in the “future.” We are welcome to watch the Kansas City MLS and submit a new offer when that does, or doesn’t, happen.

How does Fannie Mae get away with just suspending the realities of our current real estate market which they helped to create? How does hanging on to another asset for a few additional months and then inevitably dropping the price to $130,000 help? People, your tax dollars are at work here. The machine is clogged up with “decision makers” located in NW Washington, DC and Dallas (I believe that’s the location of the asset manager) making decisions about whichever local market you live in. I would seriously doubt if this asset manager has any actual real estate sales or appraisal experience. But I’m quite certain the AM has a minimum of 2 weeks paid vacation, health care benefits, and leaves promptly at 4:59 pm each afternoon.

It’s bad enough that we are in this current real estate situation. It frustrates me to no end to know that it’s difficult to get out of it when I see the decisions being made by people who are supposed to know what is going on.

12 Comments

Filed under Kansas City Real Estate, Real Estate Investing, Social Issues, Uncategorized

October 23, 2009 · 12:02 pm

Kansas City #30 Strongest City…Economically Speaking

Perusing Yahoo! recently I saw that Business Week had ranked the 40 strongest economies when speaking of cities. As expected, the list is jam-packed with metro areas found between the Mississippi River and the Rocky Mountains. Especially when looking at the Top 10.

I know that both coasts consider a large part of that area as “fly-over” country. I know they consider us backwards, a bit behind the times, lacking in intellectual prowess. I know this, because I spent 15 years of my adult life in Suburban Maryland.

“Wow. You must be glad to not be living in Kansas anymore.”

“What are tornados like?”

“Do you know Dorothy?”

And other stereotypes abound. But isn’t it funny that if it weren’t for that very are of the country our nation’s economy might have totally collapsed. Yes, being conservative both politically and economically does have it’s stereotypes and weaknesses. It also has it’s strengths.

Take a look at the list. Kansas City is #30.

Retail Space Update For Kansas City

Most of our readers here at Kansas City Real Estate & Investing are residential investment property owners…or owners of primary homes. But I like to keep an eye to commercial real estate as well since my wife and I also own a small business: Portraits Today Studios in Olathe, Kansas.

So when I read stories like this one from today’s Kansas City Star it catches my attention. It’s a longer article so let me just show you the key paragraphs.

A new study by real estate researchers Reis Inc. found that shopping center vacancies rose in the third quarter to a 17-year high as unemployment climbed, consumers cut spending and stores closed. Vacancies at neighborhood and community shopping centers increased to 10.3 percent — the highest level since 1992 — compared with 8.4 percent in 2008. Vacancies at regional and super-regional malls rose to 8.6 percent from 6.6 percent a year earlier, a high for this decade.

Rents also have dropped, to $39.18 on average at regional and super-regional malls from $40.62 a square foot a year earlier. The 3.5 percent decline is the worst year-over-year deterioration in a decade, Reis said.

“Until we see stabilization and recovery take root in both consumer spending and business spending and hiring, we do not foresee a recovery in the retail sector until late 2012 at the earliest,” Victor Calanog, Reis’ research director, said in a statement.

In my lifetime I cannot ever remember seeing so much empty space in our local shopping centers. Trying to think back to the recessions of the late ’70s and early ’80s I just don’t think I remember as many shopping centers. Big companies have fallen in droves and closed up shop. True to American history, it will be the Mom & Pops that will rebuild the retail sector. Mark my words.

For those that long to be commercial real estate investors I would have you look at today’s economy. I think, by far, those that purchased residential rental property on proper fundamentals are weathering this storm in far better shape than the non-corporate commercial investors.

2 Comments

Filed under Commercial Real Estate

October 19, 2009 · 9:21 pm

Olathe, Kansas Real Estate facebook Page

I’d love to have you go on over to my new facebook page promoting real estate in and around Olathe, Kansas. As regular readers know, Olathe is a fast growing suburb of Kansas City, Missouri. The name of the site is Olathe Real Estate Keller Williams Realty.

Now, it’s a new page so there aren’t very many bells and whistles…yet. But I’d love to have you join if you are a facebook member and a regular reader of Kansas City Real Estate & Investing. What I discuss here and what I discuss there could be, will be, two different things.

Fan me!

http://www.facebook.com/home.php?#/pages/Olathe-KS/Olathe-Real-Estate-Keller-Williams-Realty/166719317560

1 Comment

Filed under Kansas City Real Estate, Olathe