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

August 5, 2008 · 10:10 am

Bad Guy Update

A few days ago I wrote about a crooked real estate investor that operates here in the Kansas City area. Upon futher research and confirmation I did find that he holds a real estate license and holds it with a different franchise of the same company I work for! Well, this simply won’t do.

I’m happy to say that this person will no longer have his license with Keller Williams Realty effective Friday. Why Friday? I’m not sure. But I have been assured that he’s gone. Good. One less yahoo out there causing problems.

And I heard from Ben Edsall over at Turn-Key properties that this crooked real estate investor stuck a bank he works for with over 100 properties. 100! One hundred! Uno hundred! Can you imagine?

And still two different sources have assured me the FBI is investigating the dude. I don’t take joy in the misery of others. But this guy deserves all he’s gonna get.

When you are looking to invest in real estate you better check out who you are going into business with. Anything less than 100% transparency should be huge waving red flag.

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Filed under Legal Issues, Misc. Real Estate

August 2, 2008 · 6:36 pm

Rehab & Rent Workshop Announcement

There will be a Rehab & Rent Workshop put on by Chris Lengquist of Keller Williams Realty in Olathe on Saturday August 23, 2008 at 9:00 am and ending about noon. Space is limited so you must register to attend this workshop designed to teach you the numbers and philosophy of buying a home under market, rehabbing it to rental standards and then renting the home for cash flow. The location will be at Keller Williams Realty Olathe located at 801 N MurLen Rd, Olathe, KS.

Guest speaker Ryan Dusenberry will also be in attendance to share his own personal experiences with this technique that has allowed him to build his investment property portfolio to 9 properties…and he’s still in his mid-twenties. And of course Chris Lengquist will be there to teach the fundamentals of how to evaluate these properties to choose between the winners and the losers.

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Have you ever wanted to own rental property in the Kansas City area?
Have you ever wanted to rehab a house for the profit?
Have you ever been frustrated with the available inventory of rental property and rehab property?
Have you ever wanted to know how to evaluate rental property before you buy?
Have you ever wanted to hear from someone actually doing it?
Have you ever wanted to hear from a lender on the subject of rehabbing and renting?

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There is no charge for this Rehab & Rent Workshop. But you must register. Simply click on the register highlights and fill out the form and indicate that you are registering for this workshop. There will be no books to buy, no seminars to sign up for at outrageous fees and no tapes proclaiming any get rich quick schemes.

This is a hands on workshop so feel free to bring a calculator, pencil and paper. Bring your questions and a good attitude.

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What if you could buy a home or duplex that was for sale significantly under market? Maybe not enough under market to flip the house but enough to rehab and then rent. You’d have great cash flow and a fair amount of equity just sitting in the property waiting for your next move later down the line.

More of this strategy will be discussed in detail at the Rehab & Rent Workshop. Register now.

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Filed under Investment Property, Misc. Real Estate, Real Estate Investing

July 31, 2008 · 7:54 am

Are You A Straw Buyer?

Are you a straw buyer? If you are you are helping to perpetuate loan fraud. Sure signs you may be a straw buyer;

You are approached to help someone else buy a house for investment purposes
You are told you’ll have to do nothing but take out the mortgage in your name
You will be paid several thousand dollars upon a successful closing
You will share in the backside rewards of appreciation once the house is sold

On the surface, none of the items listed above is illegal. In fact, all can be done individually or grouped together in very legal fashion. But many, many times it’s a wide-open door for you to be defrauded.

Listen, YOU have to do YOUR due diligence. No one can do it for you save a very TRUSTED and TESTED source. Most straw buyers have never seen the houses they helped to purchase. That should be a warning sign right there.

Read more about straw buyers here and here. Then check with legal counsel before you do anything similar. Again, this can all be done on the up and up. But usually, it seems, it’s not.

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Filed under Legal Issues, Misc. Real Estate

July 29, 2008 · 9:21 am

Kansas City Foreclosure Property And Your Real Estate Investments

Foreclosure property in Kansas City is still a hot topic. Though not boiling over as it was a couple years back. Still, not a week goes by that a stranger will call and ask about entering the foreclosure market. Or bank owned homes, whatever you want to call them.

Here are a few facts as I see them regarding Kansas City and the foreclosure boom;

Missouri has more foreclosures than Kansas
Kansas City, MO proper has a higher foreclosure rate than either the Missouri or Kansas suburbs
That said, Kansas City is WAY below the foreclosure hotbeds of Ohio, Michigan, California, Nevada and Florida (Click here to see heat map.)
Foreclosure properties are not nearly as profitable as the public thinks
Banks are not giving away homes

Is there money to be made buying bank foreclosures in Kansas City?
Yes. But you’ll need cash on hand. Both for the down payment and the necessary updates and repairs. I’ve never seen a bank foreclosed house that didn’t need at least carpet and paint. Most need significantly more repairs and/or rodent/flea controls.

A good model? Buy a foreclosure and rehab and then rent. A sure way to have a jump start on equity and to keep your overall costs low compared to a buyer going straight retail.

A better model? Buy a pre-foreclosure. Pre-foreclosures are homes that are steamrolling into foreclosure that have some equity in them that will allow you to “buy-out” the existing homeowner and do the necessary repairs and still make money. This also involves short sales. It’s a very complicated process. Well, more time consuming than complicated.

True Story
We put in an offer 63 days ago on a short sale house over in Kansas City, Missouri. 63 days. Consistent follow ups by the listing agent (and I’m sure he got tired of hearing from me) finally yielded a response yesterday. The response from the loan servicing company was that if we could close with cash on Thursday (that’s THIS Thursday…two days from today) they would accept our offer.

So let me get this straight. We have to wait and wait and wait and wait and wait and then jump on your request on a day’s notice? Well, yes. And of course the buyer is going to do it because he’s going to have equity city when the sale is completed. But what a hassle. And not a lot of buyers are set with cash ready to go…know what I mean.

The foreclosure market can be profitable. It can also be annoying. Scary at times, too. (Ever walk into a vacant home only to hear rustling noises and when you walk into a back bedroom you find an open window, the smell of a freshly smoked cigarette and fresh urine in the closet?)

So my advice is to think twice before delving into bank owned homes (aka REO – real estate owned) or HUD homes, as well. The foreclosure market can be profitable and exciting. But trust me, it’s not for everyone.

Still not scared? Then give me a call and I’ll help you through the process of buying foreclosed homes. But be forewarned. I don’t mess with $5,000 or $10,000 houses. Not my style. In neighborhoods I don’t feel safe, generally. And I don’t see the long term rewards in them. But still feel free to give me a call to discuss. Just dial 913.568.1579 to discuss buying Kansas City bank owned homes.

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Filed under HUD homes, Real Estate Investing

July 28, 2008 · 7:57 am

Tenants And Your Investment Property

Owning Kansas City investment property would be a lot more fun if it just weren’t for those darned tenants. Right?

Honestly, most of my problems with the investment property I own and/or manage (not looking to manage more…) comes from some of the questionable decisions made by tenants. But let me be clear here, I really don’t have too much trouble. I do tend to screen pretty heavily and I do treat them right.

But one thing I surely do is inspect the properties every 90 to 120 days. I go in and change their furnace filter and look around under the sinks for water leaks. I look at the bathroom walls to be sure the grout is still good and water isn’t leaking behind to the dry wall causing horrific problems for later down the road. I make sure the dog isn’t chewing though my carpet or walls.

Clothes all over the floor? I can live with that. Fist-sized holes in walls or doors tells me I have a tenant that cannot manage their anger and needs to be encouraged to leave as soon as the lease is up. Drug paraphanelia? Gone. That’s a lease violation that isn’t open to interpretation.

The point here is to go in and examine your properties three or four times during the course of a lease. Most tenants, your good ones, have no problem with this and in fact see the benefit to them. Anyone that doesn’t want me in is telling me they are not taking care of the property.

Just some thoughts to help you successfully own Kansas City investment property.

Worth Reading re: Real Estate Investing

Here are a couple of blogs to keep you busy over the weekend.

Principles Of Flight & Real Estate Investment — Gettin’ Off The Ground by Jeff Brown

Top 8 Worst Real Estate Deals On Record by Mortgage Calculator

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Filed under Worth Reading